- Business Advocacy
By Michael Aston, E.A.
Alhambra Tax Center
The following is the Consolidated Appropriations Act, 2021, signed into law December 2020.
Tax Provisions Made Extended
Paycheck Protection Program (PPP)
PPP Loans that are forgiven are excluded from taxable income. Expenses that are otherwise tax deductible and paid for with PPP loan proceeds are allowed a deduction on your tax return.
Payroll Tax Credit
o The credit was increased from 50% to 70%.
o The $10,000 limited applies on a per calendar quarter per employee basis, rather than a limit for all calendar quarters.
o A significant decline in gross receipts means less than 80% of gross receipts for the same calendar quarter in 2019.
o You may elect to use the immediately preceding calendar quarter preceding calendar quarter instead of corresponding calendar quarter year 209 for purpose of determining a significant decline in gross income.
o The 100-employee threshold is increased to 500-employees.
To determine which filing status is best for you, consult your tax professional or go to IRS.gov. This information is from Tax Material, Inc.