What’s Up in Washington, D.C.
Stimulus Update
Reconciliation rolls on as partial text of the next COVID-19 relief bill proposal was released in the House and began committee markups.
Highlights of tax section of the bill include:
Extension of the Employee Retention Credit from ending July 1, 2021 to January 1, 2022
Extension of the FFCRA’s paid sick and family leave credits from ending March 31, 2021 to September 30, 2021, plus favorable changes to the credit as well
Providing an additional $1,400 per person stimulus check, that would now include adult dependents not previously included (kids 17 and over, plus elderly parents, etc.)
Extension and increase of unemployment benefits
Expansions to the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and Child and Dependent Care Tax Credit (CDCTC)
A new grant program for restaurants would be introduced and tax-free to recipients
A repeal of worldwide interest allocation rules under §864(f) (a tax increase to those affected)
Small business assistance proposals include:
Extended eligibility to the Paycheck Protection Program (PPP) for nonprofits and internet publishing organizations and additional general PPP funding
Additional funding for the Targeted EIDL Advance, with restrictions on who may apply
Additional funding for the Shuttered Venue Operator (SVO) Grant program
Establishes the Restaurant Revitalization grant program for struggling food and drinking establishments
Notable proposals that are NOT included in the bill in its current form include:
Repeal of the net operating loss (NOL) provisions brought about by the CARES Act
Repeal of the State and Local Tax (SALT) cap that limits a federal itemized deduction to $10,000
Democrats are aiming to pass the third stimulus package by the end of February, but details of the final bill are still being drafted, so stay tuned to see the outcome.
Tax Season Begins
Filing season officially opens today! But despite a late start, form instructions that have yet to be finalized, and an understaffed IRS, the Service is currently indicating there will be no pushback of the April 15 filing deadline this year. Requesting an extension is an option as always and doesn’t throw up any red flags. However, remember that it’s an extension of time to file – not to pay any tax due.
The IRS also reminds taxpayers that e-filing is your best bet for a fast refund and will circumvent any processing delays from a mail backlog. To that end, amended individual tax returns will reportedly be available electronically for 2020 in addition to 2019, but hopefully we stop needing them!
PPP Apprisal
SBA data through February 7, 2021 on the 2021 relaunch shows nearly 1.3M loans approved for over $100B in funds. That leaves roughly $184B on the table to be claimed by the current March 31 due date.
The program has been receiving continued criticism for delays and processing errors. So, the SBA announced they are taking more steps to ensure rapid and efficient distribution of funds and overall program integrity.
Borrowers who had their PPP loan forgiveness reduced by an EIDL advance should be made whole beginning this week. The SBA will automatically identify these loans and remit the reconciliations, but lenders should reach out to affected borrowers to notify them of the payment.
Guidance Drop
As we await the roll-out of the Shuttered Venue Operator (SVO) Grant program, the SBA gave a teaser with revised FAQs. It appears they have moved some of the fixed seating language from general discussion to be under the appropriate categories to be less confusing, and expanded on the requirement to be in business on February 29, 2020.
Not new, but remember that the IRS online account can be used to view economic impact payments received, if Notices 1444 and 1444-B. This information is important to accurately calculate a recovery rebate credit on the 2020 individual return.
Case of the Fridays
Yes, will think of a better heading eventually.
This week’s case is summarized nicely by the Briefly Taxing blog:
“Lee Ann and Jethro divorced in 2013. They split the trailer and its upkeep, but one day in 2020 Jethro burned the damn thing down. Lee Ann repairs the trailer and gets Jethro’s share in a modified settlement. How is this transfer taxed?”
Tax Valentines
It’s that time of year where tax nerds can finally flex their poetic muscles! Here’s my tax valentine to you:
Valentine dates during tax season?
Away from work we briefly flee.
Make sure your CARES are not solely devoted
To the ERC and PPP!
And being as though Valentine’s Day is on a Sunday this year, our loved ones may stand a chance at actually seeing us on this day! Enjoy time with friends, family, beloved pets, and partners. May they put up with us another year longer.
Amie K
Information is provided for educational purposes and attempted humor (if any). Please consult your advisers.
Kommentarer