Consolidated Appropriations Act (CAA), 2021
Congress passed the new COVID-19 relief bill on Monday, December 21. The President signed the bill into law on Sunday, December 27.
With almost 6,000 pages, the new relief bill contains provisions that relate to individuals and businesses.
Read our summary of highlighted provisions below that may apply to you. To read the full bill click here.
Additionally, the President has requested the direct payment be increased to $2,000 to put more money in Americans' pockets. The House voted and passed this measure to increase the $600 direct payment to $2,000 on December 28, 2020. The bill is now before the Senate. RBSK Payroll continues to monitor this situation and will provide updates as they are made available.
Direct Payments: $600 direct payment checks for eligible adults (additional $600 per child) earning up to $75,000. Individuals earning between $75,000 and $99,000 would get smaller checks, and the benefit cuts out entirely for individuals earning over $99,000.
- The COVID-Related Tax Relief Act of 2020 (COVIDTRA) and Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTR) are included in the CAA as new laws which contain additional 2020 recovery rebates.
- Refundable tax credits to eligible individuals in the amount of $600 per eligible family member.
- Taxpayers receiving an advance payment that exceeds the amount of their eligible credit will not be required to repay any amount of the payment. If the amount of the credit determined on the taxpayer’s 2020 tax return exceeds the amount of the advance payment, taxpayers will receive the difference as a refundable tax credit.
- These direct payment checks are NOT taxable income.
- Unemployment Benefits: extended unemployment benefits for jobless workers, up to $300 per week through mid-March. Self-employed people and gig workers will also receive extended assistance of up to $100 per week.
- Rental Assistance: to receive assistance housholds have to meet several conditions, & the eviction moratorium now is now extended until Jan. 31.
- Non-Itemizer Charitable Deduction: extends the deduction for 2021 and increases the maximum amount that may be deducted to $600 for married couples filing a joint return (non-married filers or married filers who file separately are limited to $300).
- College Students and Parents with Federal Student Loans: will now receive an additional extension on student loan payments, and will not be required to make payments on Federal Student loans until April 1, 2021. This includes both principal and interest payments.
- Nonbusiness Energy Property Credit: extended for one year through 2021 for qualified energy improvements to a principal residence (was due to expire at the end of 2020).
PPP Loans: additional $284 billion available for Paycheck Protection Program loans with expanded eligibility for the loans to include nonprofits, local newspapers, TV and radio stations, live venues, independent movie theaters and cultural institutions.
- Under COVIDTRA, taxpayers whose PPP loans are forgiven are allowed deductions for otherwise deductible expenses paid with the proceeds of a PPP loan, and the tax basis and other attributes of the borrower’s assets will not be reduced as a result of the loan forgiveness.
EIDL and Emergency Grants:
- Under COVIDTRA, gross income does not include forgiveness of EIDL loans, emergency EIDL grants, and certain loan repayment assistance. The provision also clarifies that deductions are allowed for otherwise deductible expenses paid with the amounts not included in income, and that tax basis and other attributes will not be reduced as a result of those amounts being excluded from gross income.
Employee Retention Tax Credit: extension and expansion of the Employee Retention Tax Credit through July 1, 2021. The bill increases the refundable payroll tax credit from a maximum of $5,000 to $14,000 by changing the calculation from 50 percent of wages paid up to $10,000 to 70 percent of wages paid up to $10,000 for any quarter.
- The bill clarifies that businesses will now be able to take the Employee Retention Tax Credit and participate in the PPP.
Extension of Paid Sick and Family Leave Credits: the Families First Coronavirus Response Act requires certain employers to provide paid leave to workers who are unable to work or telework due to circumstances related to COVID-19.
- Refundable tax credits available to employers who provide paid sick and family leave related to COVID-19 is extended through March 31, 2021. Corresponding employer mandates are also extended.
- Deduction for Business Meal Food: a 100% deduction for business meal food and beverage expenses provided by a restaurant that paid or incurred for 2021 or 2022 (current/previous deduction was available for only 50% of such expenses).
Tips of where to get your information about the virus
Centers for Disease Control and Prevention CDC.gov
Indiana State Department of Health News ISDH.in.gov
World Health Organization WHO.int
Where to find local updates about the virus
Decatur County Health Department Facebook Page
Bartholomew County Health Department Facebook Page
Ripley County Health Department Facebook Page
Franklin County Health Department Facebook Page
North Vernon Plain Dealer & Sun Homepage
We are committed to serving clients with care, and we are confident we are taking precautionary measures to promote the health and safety of our staff and clients. We know that this is a stressful time for everyone, and we hope that you, your family and our community stay safe.
Please call us at 812-222-1559 if you have any questions