What Business Owners new to Know About the New COVID Relief Package

The new COVID relief package has arrived, and employers have a lot to sort through.

The $900 billion Consolidated Appropriations Act, 2021 makes changes that will help businesses and individuals.

To ensure your company and your employees take full advantage of everything in the 5,593-page new law, we broke down the key changes, and included their effective dates to help you prepare.

Another round of Paycheck Protection Program (PPP) loans

First and foremost, the feds made an additional $284 billion available for PPP loans. Those who took advantage in Round 1 can participate again in Round 2. If your organization wasn’t eligible for the first go-around, you might be now. Loan eligibility has been expanded to include all nonprofits.

Two other key points made clear in the new law:

  • You can now count “supplier costs and investments in facility modifications and personal protective equipment to operate safely” as allowable non-payroll expenses.
  • Business expenses paid for with PPP loans now will be tax-deductible.

Employer credit for paid sick leave and family leave

If you continue to voluntarily offer your employees paid sick and family leave, you’re now entitled to the payroll tax credit through March 2021.

Employer credit for paid family and medical leave

Do you provide paid family and medical leave to your employees? Then you can now take the federal tax credit granted in the Families First Coronavirus Response Act through Dec. 31, 2025.

It applies to wages paid in taxable years beginning after Dec. 31, 2020.

Business meal expense deductibility

Make sure A/P knows about this T&E windfall. For tax years 2021 and 2022, all ordinary business meal expenses will be tax-deductible.

Health and dependent care flexible spending arrangements

Employees can now roll over unused amounts in their health and dependent care flexible spending arrangements from 2020 into 2021 and from 2021 into 2022.

On top of that, you can let employees make a 2021 mid-year change in contribution amounts.

Employer-provided student loan repayment

The CARES Act let you temporarily contribute up to $5,250 annually (excludable from an employee’s income) toward an employee’s student loans. But it expired Dec. 31, 2020.

Under the new COVID relief package you can offer that benefit through Dec. 31, 2025.

Need help finding a PPP lender for your business? We can help.

Click HERE to schedule a call.

*Source: www.cfodailynews.com

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