There’s a lot to unpack from the $900B Coronavirus Response and Relief Supplemental Appropriations Act of 2021 signed on Sunday, December 27th. We’re still diving into the details and awaiting additional guidance — please stay tuned for updated resources.
In the meantime, watch our quick video and review the summary below to learn more about relief programs to keep on your radar. And if you’re interested in PPP, join us on January 5 for a webinar on how to prepare for the next round of loans.
Summary of COVID-19 Relief for Small Businesses – December 2020 Stimulus Law Updates
- PPP Expense Deductibility: Permits expenses used with PPP loans to be deductible. This may impact “basis” for s-corp entities, so please discuss impacts of PPP loan forgiveness with your CPA.
- FFCRA Paid Leave Tax Credits Extended to March 31, 2021: This extension allows eligible employers to claim tax credits for FFCRA-like wages through the end of Q1 2021. It does not extend the requirement to provide FFCRA leave after December 31, 2020. No additional time for those having to quarantine again, but FFCRA credits continue into Q1.
- Employee Retention Credit (ERC): Extended until June 30, 2021; expanded payroll tax credit of up to 70% on wages up to $10,000 per quarter (previous ERC program was 50% of wages up to $10,000 per year, so this is much more generous). ERC can be used by PPP borrowers as long as the wages used for the credit were not from PPP wages.
- Meals Deductions: Restores business meals deduction from 50% to 100% for 2021 and 2022.