You could soon see another stimulus payment in your bank account with the recent passage of the Emergency Coronavirus Relief Act of 2020, which could mean more direct relief to you and your family. Here are some of the major points you need to know that are buried inside this 5,000+ page, $900 billion piece of legislation.
Direct payments to you. The legislation includes a $600 payment per person, including adults and your dependent children. Payments are based on your 2019 income tax and should start being distributed shortly after Christmas, per Treasury Secretary Mnuchin. As with the original payments, the payment amount phases out for incomes over $75,000 for single taxpayers and $150,000 for married couples.
Things to consider:
Extension of unemployment benefits. Federal unemployment benefits of up to $300 per week will be extended through March 14. The benefits programs for self-employed and gig workers, which was set to expire at the end of 2020, was also extended.
Things to consider:
Deductibility of expenses paid with PPP loans. Businesses that received PPP loans and had them subsequently forgiven will be permitted to deduct the expenses covered by those loans on their federal tax returns. Much to the chagrin of the IRS, the recent bill clarifies that PPP loan forgiveness now means no tax impact due to the forgiveness. For example, if you used $100,000 of payroll in your application to get your loan forgiven, you can still deduct the payroll as an expense on your tax return.
New PPP loan funds. There is additional money available from the Small Business Association (SBA) for a new round of PPP loans. The new loan program is targeted to businesses that need the funds. To qualify, your business must have 300 or fewer employees and have seen a drop in revenue of 30% or more during any quarter in 2020. Some of the money is earmarked for very small borrowers, underserved communities, and small lenders. There are even simplified requirements for forgiveness if the loan amount being applied for is less than $150,000.
Eviction moratoriums and rent assistance. The bill extends until January 31, 2021 a moratorium on evictions that was scheduled to expire at the end of 2020. The bill also includes $25 billion in emergency assistance to renters.
There is much more in this huge bill, including relief for hard-hit industries, education, student loans, and vaccine assistance. Please keep up-to-date as more is learned after a full review of the bill is made available.
Last updated: 12/28/2020
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