After a bit of political posturing in December, the $900 billion Consolidated Appropriations Act of 2021 (2021 CAA) was signed into law by President Trump as the COVID-19 pandemic continues to impact employers and employees.
Here’s a quick recap of five key highlights:
Stimulus Checks: The new law authorized a second round of $600 checks for people with income that meets the criteria. The checks start to phase out for individuals who earned at least $75,000 in 2019 and $150,000 for joint filers.1
Unemployment Benefits: The law provides up to $300 per week in enhanced benefits through March 2021. The benefits extend to self-employed individuals and gig workers.2
Student Loan Repayment: The 2021 CAA extends the provision that allows employers to repay up to $5,250 annually towards an employee’s student loan payments. The payments are tax-free to the employee.3
Small Businesses: The 50% limit on the deduction for business meals has been lifted. Business meal expenses after December 31, 2020, and before January 1, 2023, may now be fully deductible. Please consult your tax, legal, or accounting professional for more specific information regarding this provision.4
PPP Loans: The new law contains $284 billion in relief for a second round of Payment Protection Program loan funding. Businesses with 300 or fewer employees may be eligible for a second loan. “Second-draw” loans are available through March 31, 2021.5
As 2021 gets underway, expect some additional guidance from regulators on 2021 CAA. Our office will keep an eye out for updates and pass information as it becomes available.
Click here to read the IR IR-2020-280 published on December 29, 2020 (Treasury and IRS begin delivering second round of Economic Impact Payments to millions of Americans)
1. USAToday.com, December 31, 2020
2. CNBC.com, December 21, 2020
3. ThinkAdvisor.com, December 30, 2020
4. ThinkAdvisor.com, December 30, 2020
5. Forbes.com, December 29, 2020
Today’s summary of the Consolidated Appropriations Act of 2021 is for informational purposes only and is not a replacement for real-life advice. Make sure to consult your tax, legal, or accounting professional before modifying any part of your tax strategy based on the new stimulus package.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
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