The Coronavirus, Aid, Relief, and Economic Security (CARES) Act made it easier to access savings in IRAs and workplace retirement plans for those affected by the coronavirus. This relief provided favorable tax treatment for certain withdrawals from retirement plans and IRAs, including expanded loan options.
Q & A: The $10,200 Unemployment Tax Break
Generally, unemployment compensation received under the unemployment compensation laws of the United States or a state is considered taxable income and must be reported on your federal tax return. However, a new tax break — in effect only for the 2020 tax year — lets you exclude the first $10,200 from taxable income. Here’s what you should know:
Personal Protective Equipment Qualifies for Deduction
As a quick reminder, the purchase of personal protective equipment, such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses.
PPP Loan Deadline Extended Through May 31
The Paycheck Protection Program Extension Act of 2021 was signed into law on March 31, 2021, extending the deadline to apply for a loan by an extra 60 days, from March 31 to May 31, 2021. The law also gives the Small Business Administration (SBA) an additional 30 days after the May 31 deadline to review and process loan applications.
How Teleworking Is Changing Your Tax Obligations
As the COVID-19 pandemic persists, many employers continue to encourage or require their employees to work from home (i.e., telework). These remote working arrangements have tax implications. Here’s how they could affect you.
Tax Filing Season Starts February 12
Although tax season usually starts in late January, this year, the tax filing season is delayed until February 12, 2021. The delayed start date for individual tax return filers allowed the IRS time to do additional programming and testing of IRS systems following the December 27, 2020, tax law changes that provided a second round of Economic Impact Payments and other benefits to many taxpayers. This programming work is critical to ensuring IRS systems run smoothly to minimize refund delays and ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.
Relief for Taxpayers Struggling With Tax Debts
While there have always been payment options available from the IRS to help taxpayers struggling to pay tax debts, the new IRS Taxpayer Relief Initiative was put into place to expand these options and offer relief during the pandemic. These revised COVID-related collection procedures will help taxpayers, especially those who have a record of filing their returns and paying their taxes on time.
Employer Tax Credit Extended for Payroll Workers
The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made several changes to employee retention tax credits. These tax credits were previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The most notable change was the modification of the Employee Retention Credit (ERC). Several of the changes apply only to 2021, while others apply to both 2020 and 2021. As such, employers can take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that choose to keep their employees on the payroll – despite challenges posed by COVID-19.
PPP Round 2: What You Need to Know to Cash In
The new tax law just signed by President Trump has significantly changed the current Paycheck Protection Program.
Most importantly, it provides a second round of additional PPP loan funding.
Here are the key changes — from forgiveness to the requirements for new PPP funding.
Covid-Related Tax Relief Act of 2020
The Consolidated Appropriations Act, 2021, H.R. 133 included funding for the government, extensions for expiring tax extenders, COVID tax relief under the COVID-related Tax Relief Act of 2020, and many more items. Passed by both the House and Senate, it was signed into law by President Trump on December 27, 2020.