The Consolidated Appropriations Act of 2021, enacted late last year, includes several tax related changes and incentives affecting businesses.
Congress overruled guidance from the Internal Revenue Service to provide that expenses paid with Payroll Protection Program loans (PPP) will be deductible even if the PPP loans are forgiven. The new law also clarifies how forgiveness works in the context of a partnership or S corporation.
Congress modified the Employee Retention Credit in two important ways. First, businesses that receive PPP loans may now qualify for the employee retention credit, but not with respect to payroll expenses that are used to qualify for forgiveness of PPP loans. Second, the Employee Retention Credit has been extended to June 30, 2021 on significantly improved terms, including allowing for a larger credit and easier qualification for some employers.
Congress also modified the deferred payroll tax scheme put into place last year. Deferred payroll taxes can be paid by the employee through wage withholding continuing until Dec. 31, 2021 instead of only through April 30, 2021.
Finally, Congress extended payroll tax credits for COVID leave programs through March 31, 2021. For more information please see our client alert.
If you have questions, please contact Mark Davidson or Josh Lingerfelt, linked below.
Brooks Pierce is dedicated to keeping our clients fully informed during the COVID-19 crisis. For more information, please visit our COVID-19 Response Resources page.
Add a comment
- Discrimination Against Caregivers: New Guidance from the EEOC
- Pick Your Backlash: Deciding on a COVID-19 Vaccination Policy Means Backlash for Employers, Regardless of the Policy They Implement
- Vaccine or Test For Large Employers on Hold Again, But Medicare and Medicaid Facilities Must Ensure Covered Staff Are Vaccinated
- Mandatory Vaccination or Testing Is Back: Updates on OSHA’s COVID-19 Vaccination and Testing Emergency Temporary Standard for Private Employers with 100 or more Employees
- OSHA Issues New COVID-19 Vaccination and Testing Emergency Temporary Standard for Private Employers with more than 100 Employees
- President Biden’s “Path out of the Pandemic” Imposes New Vaccination Requirements
- Updated CDC Masking Guidance; North Carolina Employers Strongly Encouraged to Implement COVID-19 Vaccination, Testing, and Mask Policies
- OSHA’s New Emergency Temporary Standard to Protect Healthcare Workers
- North Carolina Governor Extends Certain COVID-19 Measures
- New from OSHA on COVID-19: A COVID-19 Emergency Temporary Standard for Healthcare and Revised Guidance for All Other Employers