On Monday, December 21st, the Senate and House of Representatives passed the Consolidated Appropriations Act, 2021, the second COVID-19 relief bill since the CARES Act in March. Full text of the bill is available here.
The $900 billion bill provides $600 stimulus payments to individuals, adds $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses.
Key provisions include:
- FFCRA Leave included: Extension of credits for paid sick and family leave. The provision extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, through the end of March 2021. It also modifies the tax credits so that they apply as if the corresponding employer mandates were extended through the end of March 2021. This provision is effective as if included in FFCRA.
- Payroll Tax Deferral Repayment: On August 8, 2020, the President of the United States issued a memorandum to allow employers to defer withholding employees’ share of social security taxes or the railroad retirement tax equivalent from September 1, 2020 through December 31, 2020, and required employers to increase withholding and pay the deferred amounts ratably from wages and compensation paid between January 1, 2021 and April 31, 2021. Repayment deadline is extended to December 31, 2021.
- 6 month expansion of Employee Retention Tax Credit: Up to $10,000 per employee per quarter, Increases the credit rate from 50 percent to 70 percent of qualified wages; Expands eligibility for the credit by reducing the required year-over-year gross receipts to 20% from 50%; Eligible for business with up to 500 employees; and will allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.
- PPP 2nd Loan: Creates a second loan from the Paycheck Protection Program, for smaller and harder-hit businesses, with a maximum amount of $2 million for businesses under 300 people with a 25% loss in revenue.
- PPP Tax Treatment: Business expenses can be deducted for PPP paid expenses (IRS double-dip fix).
- PPP Simplified Forgiveness: New 1 page summary of the loan to be forgiven if under $150,000.
- EIDL Reduction: PPP forgiveness is not reduced by the amount of an EIDL payment reduction.
CTR will be holding a special webinar to expand on these details and answer any questions you have about the relief. Register Here!