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On December 27, 2020, President Trump signed a $2.3 trillion Coronavirus relief and government funding bill, the Consolidated Appropriations Act of 2021, into law extending billions of dollars in relief aid to individuals and businesses across the country.
Doeren Mayhew’s CPAs and advisors have highlighted key provisions of the new legislation below.
Paycheck Protection Program (PPP) Second Draw Loans
Another round of PPP loans, referred to as second draw loans, have been authorized by the new legislation.
Businesses with 300 or fewer employees that have incurred at least a 25% reduction in gross receipts in the first, second or third quarters in 2020 compared to the same quarters in 2019, may request supplemental funding after they have fully exhausted their original PPP loan.
Eligible expenses have also been expanded to include:
The legislation provides a direct stimulus payment of $600 per individual or $1,200 per married couple. Families can claim the full $600 amount for each dependent child. These direct payments will begin to phase out for individuals who had adjusted gross income in 2019 in excess of $75,000, or $150,000 for joint filers. Similar to the economic impact payments provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the payment is a credit against 2020 taxes.
As of Dec. 29, 2020, the House passed a bill to increase these stimulus payments to $2,000 instead of $600 at President Trump’s urging. It is still yet to be seen if this will pass the Senate.
With the passing of the new legislation comes an extension and expansion of key tax relief brought about originally by the Families First Coronavirus Response Act (FFCRA) and the CARES Act, along with new provisions, including:
Doeren Mayhew’s tax advisors stand ready to help you take full advantage of the tax credits and deductions available to you, especially in these times of uncertainty. If you have questions about how the new legislation may impact you or your business, contact our tax advisors today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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