PPP and ERC Changes for 2021

Changing Regulations, Guidance and Questions

The deluge of legislation resulting from the COVID-19 lockdowns can be confusing to many people. Add the ever-changing regulations, the associated guidance and forms that must be created to support those regulations, and an administration change, and you have a recipe for a 2021 tax filing season that could be as unpredictable as 2020.

We have gotten numerous questions from clients concerning the new Paycheck Protection Program (PPP)and the new Employee Retention Credit (ERC).

On January 19, 2021, additional new regulatory changes were made with respect to the ERC. We are working to evaluate the recent changes, how they impact our clients, how we can best help limit our clients’ tax liability and understand when the forms will be finalized.

The Good News

The good news is that while everyone is in the same boat, YOU have an accounting firm that is keeping their eyes on the ever-changing map, has the expertise to steer you clear of any iceberg, and can deliver you safely to your destination.

Employee Retention Credit - 2021 Changes

The Consolidated Appropriations Act signed into law by President Trump on December 27, 2020, makes significant changes to the employee retention credit for 2021. New guidance measures were issued January 19, 2021 on how to claim the credit for the retroactive measures and for advance payments for the new provisions in 2021.

Forms for this credit have not been finalized as of January 20, 2021.

We are currently reviewing the guidance measures issued to help limit the taxes our clients pay and to ensure that our clients received the full benefits of this act.

To read the high-level overview of the ERC, Click below.

Read More about PPP Changes for 2021

COVID Relief Bill Tax Provisions

Allowance of Full Deduction for Business Meals

COVID Relief Bill temporarily allows a 100% business expense deduction for meals (rather than the current 50%) as long as the expense is for food or beverages provided by a restaurant.

This provision is effective for expenses incurred after Dec. 31, 2020, and expires at the end of 2022.

To read More about the Business Meals Tax Provisions and other Misc. provisions, Click Here

Links To Additional Resources

IRS Mobile App, Click Here

IRS Free File, Click Here

IRS Recovery Rebate center, Click Here

Where's My Refund Tool, Click Here

Tax Treatment of Unemployment Benefits, Click Here

COVID Tax Relief Info, Click Here

Full IRS Notice on 2021 Tax Filing Season, Click Here

QUESTIONS?

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

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