Tuesday, March 9, 2021
This Friday, Mar. 12, I will be doing a two-hour tax update webinar. I will address the late 2020 legislation, new guidance from the SBA and IRS and the tax changes included in the recent massive spending legislation enacted into law.
Upcoming tax update webinar – it’s the topic of today’s post.
The 2020 tax filing season has been a difficult one for practitioners given the lateness of tax legislation contained in the Consolidated Appropriations Act, 2021 (CAA). The CAA, 2021 contains many individual, business, payroll, disaster, and energy-related tax provisions. The legislation also extends many provisions that were set to expire at the end of 2020. Other provisions on the new law are virus-related, including additional "stimulus" payments and an extension of payroll credits as well as pension and other employee benefit provisions and modifications to the Payroll Protection Program (PPP). In addition, changes were made to the rules surrounding the deductibility of business meals provided by restaurants in 2021 and 2022. For farmers and ranchers, the CAA, 2021 makes changes to the existing Coronavirus Food Assistance Program (CFAP) and appropriates additional funds for various agricultural programs.
If the lateness of 2020 legislation impacting tax returns didn’t pose enough tax problems for practitioners, in recent days, the U.S. Senate passed its version of the nearly $2 trillion spending bill, the “American Rescue Plan Act.” The Senate’s version is basically the same as the House bill, but the Senate did make some changes that require the bill to go back to the House for another (and final) vote.
Provisions in the bill that impact tax are as follows:
- Extension of $300 per week unemployment benefit through September 6 (it would have expired in mid-March. In addition, the first $10,200 of unemployment benefits is tax-free (not in original House bill).
- A third round of stimulus checks in the amount of $1,400.
- An increase in the child tax credit to $3,000 (up from $2,000) for children between the age of 6 and 17 and $3,600 for children under 6. The credit would be direct deposited periodically in the taxpayer's account.
- Expansion of the Employee Retention Tax Credit;
- Tax-free virus-related student debt relief;
- Extension to September 30 of the tax credits to businesses that provide paid family leave; and
- Increased Obamacare tax subsidies.
During the webinar, I will bring you up to speed on the key changes since late December and provide insight as to how the changes impact farm and non-farm businesses. I will also suggest planning steps that taxpayers should be taking now based on the new changes.
For registration information, click here: https://washburnlaw.edu/employers/cle/taxupdatecaa.html