IMPORTANT UPDATE: Stimulus Bill - Consolidated Appropriations Act
$900B Stimulus Approved
Stimulus Bill - Consolidated Appropriations Act
DEC 22, 2020
Over the next couple weeks, we will expand on this information and how it affects your workforce, business, taxes, and payroll. Fluid updates will be provided as they change here. The Independent Payroll Providers Association (IPPA) distributed the following information to help summarize and bring clarity to the newly passed Act.
Totaling almost 6000 pages, the Consolidated Appropriations Act, 2021 is now available. The bill includes all the government funding plus COVID relief. A full summary of the PPP and other small business provisions are included in the attached.
Included in the bill is an FFCRA extension for your immediate review, outlined below. COVID Details – FFCRA Leave included: Extension of credits for paid sick and family leave. The provision extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, through the end of March 2021. It also modifies the tax credits so that they apply as if the corresponding employer mandates were extended through the end of March 2021. This provision is effective as if included in FFCRA.
Payroll Tax Deferral Repayment: On August 8, 2020, the President of the United States issued a memorandum to allow employers to defer withholding employees’ share of social security taxes or the railroad retirement tax equivalent from September 1, 2020 through December 31, 2020 and required employers to increase withholding and pay the deferred amounts ratably from wages and compensation paid between January 1, 2021 and April 31, 2021. Repayment deadline is extended to December 31, 2021.
6-month expansion of Employee Retention Tax Credit: Up to $10,000 per employee per quarter, increases the credit rate from 50 percent to 70 percent of qualified wages; Expands eligibility for the credit by reducing the required year-over-year gross receipts to 20% from 50%; Eligible for business with up to 500 employees; and will allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.
PPP 2nd Loan: Creates a second loan from the Paycheck Protection Program, for smaller and harder-hit businesses, with a maximum amount of $2 million for businesses under 300 people with a 25% loss in revenue.
PPP Tax Treatment: Business expenses can be deducted for PPP paid expenses (IRS double-dip fix).
PPP Simplified Forgiveness: New 1-page summary of the loan to be forgiven if under $150,000.
EIDL Reduction: PPP forgiveness is not reduced by the amount of an EIDL payment reduction.
Information may be subject to change.