Early this morning, Congress passed the Consolidated Appropriations Act of 2021 that has been subject of negotiations for months. This bill:
- Allows expenses paid for with loans from the Paycheck Protection Program (PPP) to be tax deductible and excludes PPP loans that are forgiven from gross income.
- Expands eligible expenses for PPP loans to include software, cloud computing, other HR/accounting needs, property damage not covered by insurance, supplier costs from prior to taking out the loan, PPE and investments that help the loan recipient comply with relevant COVID-19 government guidelines. Expansions are retroactive, except for those who have already had their loans forgiven.
- Allows certain businesses to receive a second PPP loan.
- Provides grants to providers for healthcare related expenses and lost revenue.
- Extends the period by which employers can defer payroll taxes to April 30, 2021 and paid back by January 1, 2022.
- Allows PPE and other COVID-19 related supplies to be eligible for the educator expense deduction, retroactive to March 12, 2020.
- Extends refundable payroll credits for paid sick and family leave that were included in FFCRA through March 31, 2021, allows self-employed individuals to use 2019 income rather than 2020 income to compute the credit.
- Provides $300/week for unemployment insurance through March 14, 2021.
- Provides direct stimulus payments of up to $600 per adult and child, with an income phase out at $75,000 for single-filers and $150,000 for those filing jointly.
The President is expected to sign the bill into law. As more information becomes available it will be released in a future edition of this newsletter and on the IDA Facebook page