Key highlights from the new relief legislation include:
- $600 stimulus checks ($1,200 for married couples) plus an additional $600 for each dependent under the age of 17.
- An additional round of forgivable PPP loans.
- For both rounds of PPP loans, additional expenditures will qualify in determining the portion of PPP loans forgiven.
- For both rounds of PPP loans, simplified applications will be provided for loans of $150,000 or less, and lender banks will be held harmless, provided they acted in good faith.
- No deduction will be denied, no tax attribute reduced, and no basis increase denied with respect to forgiven PPP loans. Forgiven PPP loans will be treated as tax-exempt income and an increase in basis allowed for partners and S corporation shareholders. These changes will be retroactive as if included in the original CARES Act legislation.
- The CARES Act created emergency grants of up to $10,000 under the Economic Injury Disaster Loan (EIDL) program. Taxpayers receiving an EIDL grant were required by the CARES Act to reduce any PPP loan forgiveness by the EIDL grant. This new legislation now provides that any EIDL grants do not reduce a borrower’s PPP loan forgiveness amount.
- The refundable Employee Retention Credit has been extended and expanded through July 1, 2021. Retroactive change allowing eligible employers to take ERC in addition to a PPP loan. Available credit per employee increasing from $5,000 in 2020 to $14,000 over two quarters in 2021.
- While the mandate to provide paid leave is not extended and expired after December 31, 2020, the employer may still claim the credit if the employee would have qualified for mandated paid leave had the mandate been extended and the employer provides paid leave.
- $300 per week of additional unemployment insurance assistance is provided for 11 weeks from the last week of December.
- The repayment period for deferred employee payroll taxes is extended through the end of 2021.
For an in-depth look at the new legislation, visit EideBailly.com