New Tax Legislation

Stimulus Legislation Questions

Guidelines Have Not Been Issued

With the recently passed legislation, there are a number of stimulus related items that have been amended, changed and added.

We are waiting for formal guidelines from the SBA and United States Treasury.

We are monitoring the situation closely and when the guidelines are issued, you will receive communication from us through an email, on our blog, and posted to the front page of our website.

What We Know Now

Legislation became law on Dec. 27, 2020

New round of PPP:
Must have a 25% or more drop in revenue quarter over quarter comparison 2019 -2020
We are running the reports for those clients affected and will reach out to them individually

Employee Retention Credit:
Extended to first 2 quarters of 2021.
Can now apply for ERC while having taken a PPP loan.
Must show 80% drop in revenue OR forced to shut down during 2020.

Babies/ Adoption 2020:
You MAY be eligible to claim stimulus phase 1 & 2.
Will happen on Form 1040 - Rebate Recovery Credit.
MUST have a SS# (copy of card must be uploaded to client portal) and we will claim the credit on the 2020 tax filing if AGI limitations are not met.

Charitable above line deduction for standard deduction filers.
Limit is $300 for all filers except MFS - each person will claim $150.
Must have been a cash/check donation.

Individual Stimulus
$600 / adult.
Will be received in the same manner as your previous stimulus payment

If you did NOT receive stimulus but should have:

TELL US before we prepare your tax return.
Rebate Recovery Credit is a new credit on the 2020 tax filing / Form 1040 to claim non-payment.

We will continue to monitor the situation and update our website and blog with new information as we receive it. Click here to view website updates.

Get the Latest Tax Information

To view the latest tax updates, visit our Blog: It's Accrual World.

CARES Act Changes

The CARES Act Changes Deducting Charitable Contributions

Taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations.

More information about these changes is available on IRS.gov.

LINKS TO HELP WITH CHARITABLE DONATIONS

Tax Exempt Organization Search

Publication 526, Charitable Contributions

Publication 561, Determining the Value of Donated Property

Form 8283, Noncash Charitable Contributions

Schedule A, Itemized Deductions

Frequently asked questions: Qualified charitable distributions

Tax Topic 506, Charitable Contributions

Deducting Charitable Contributions at a Glance

QUESTIONS?

If you have any questions, please email us at: TeresaM@tx-cpa.com or

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