We Made It!

WE MADE IT (barely) TO MAY 17th!

Now It’s Time for E-Blasts, ERC projects and Getting Returns OUT THE DOOR!

After a small break, we are back in the office. It will take us a week or so to get organized so please continue to be kind to us. We truly appreciate your patience, kind words and treats you have sent our way!

PPP Forgiveness for #1

This is a reminder to go ahead and get the First PPP loan forgiven – UNLESS you qualify for ERC (and you should know who you are if you do!). You will be happy to get it behind you and your bank will do happy dances all over their offices. Our understanding is that it is an even easier form now so it did pay to wait!

EIDL from the SBA

This is a repeat of our 14^th E-blast (Miscellaneous Topics for a Spring Day).

There is more money the SBA is offering with the Targeted EIDL. There are various caveats (read the 14^th for more details) but the main thing that you need to know is the SBA WILL CONTACT YOU. So, the adage “Don’t call us, we’ll call you” is true in this case (except it’s an email from SBA).

This is tax-free money in the form of an EIDL grant (like the first one).

EIDL Loans

The SBA is also accepting new COVID EIDL loan applications through their portal. These loans are designed for qualified small businesses and must be used for salaries, health care benefits, rent, utilities, debt service payments and other operating expenses that were difficult to meet during the pandemic.

Loans started being approved April 6, 2021. The maximum loan has increased to $500,000 and has a fixed interest rate of 3.75% with a 30-year maturity date. There are no prepayment penalties or fees. The loan does require it be secured. This is a loan and will not be forgiven. There are many rules to follow. Please call before applying for this loan.

Third Economic Impact Payment

The IRS started sending out rebates to Americans back in January. The amount depended on your taxable income with the maximum being $1,400 per individual (including dependents). If you had bank deposit information listed on your 2019 or 2020 returns, you should have received the rebate in that account (if eligible). If you did not, you will be receiving a check. This rebate (like the others) is not taxable in the year received (2021).

Advance Child Tax Credit Payments in 2021

The IRS will be issuing advanced credits for taxpayers with children 17 and under in 2021. The credit payments (half of the total amount) will be paid from July through December. This is a credit for eligible taxpayers (income limits apply). While you may not be affected, your staff may, so we wanted you to be informed.

For 2021, the tax child credit for children ages 6 to 17 is up to a total of $3,000. For children under 6 years old, the credit is a maximum of $3,600. The monthly payments starting in July will be $300 per child under the age of 6, and $250 per child ages 6 through 17.

This advanced credit will reduce the amount of credit allowed on the 2021 tax returns. The credit is being estimated based on the 2020 tax returns filed. In addition, the IRS is allowing eligible taxpayers to decline the payment.

The IRS will provide more information in the coming month(s)...

South Carolina Tax Update

While NC legislators have kept us busy regarding the PP loan expenses, SC has now joined the fun!

Unemployment benefits in 2020 for eligible (don’t you like that definition?) taxpayers are being reduced by $10,200. On May 18^th the SC legislators agreed to allow the federal deduction for SC residents. The feds have announced we do not need to amend any returns filed prior to the law change and the early filing taxpayers will receive a check for the difference starting in May. However, SC did not make that provision, requiring amended returns to be filed.

Again, thank you to all of you during this tax season. We have not hit the ground running yet (dragging is more like it) but we will rebound.

Happy Memorial Day!

COLEMAN, UREDA, ALFORD & KAUCHER, PA