On December 21, Congress passed a much needed COVID-19 relief bill and the President is expected to sign the bill today. The key points you need to know are in this article. The list below shares great news for business owners.
The bill allows us to deduct the expenses for which we used PPP funds, a favorable reversal by Congress of the original IRS position. This helps tax projections we may have recently prepared for you. We planned for the worst, hoped for the best.
Continued simplification of the loan forgiveness application process for loans of $150K or less. This is even more streamlined than the latest Form 3508S, and may save you the trouble of retrieving/uploading forms to the bank portal. This is great news and substantiates counsel we have given, encouraging you to wait. Your bank will reach out to you with additional information.
Congress approved a second round of PPP, if you meet certain tests (< 300 employees, a 25% or more gross revenue decline in any 2020 quarter, compared to the same quarter in 2019). Businesses who have suffered the most will get additional help.
100% business expense deduction for meals (rather than current 50%), if meals are provided by a restaurant. Expires 12/31/2022
Extended employee retention tax credit
Beyond this, we see favorable small business planning opportunities. Please contact us after the holidays to discuss what might be most relevant.
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