On 12/27, the President signed the Consolidated Appropriations Act of 2021 (the CAA) into law.
We wanted to take this opportunity to highlight critical information for our clients. Please be aware that this law is less than two weeks old, and so we do not have all the details yet. Please consider this a “big picture” email, and we will work diligently to get into the details as soon as they are available. More information is coming!
PPP Expenses – These expenses are now fully deductible.
PPP Forgiveness – Loans of $150,000 or less can use the simplified application (the SBA has 24 days from 12/27 to prepare this form, but then the banks will need time to update their systems)
PPP Second Round – There is a second round of PPP available – but it is very limited. You may be able to get more PPP funding if you can show a reduction in gross receipts.
Payroll Credits – there were quite a few changes and extensions to various coronavirus payroll credits – if you feel that you qualify for one of these, or would like to discuss further, please contact your CPA
EIDL Advance – The EIDL advance now does not reduce the amount of the PPP forgiveness, and the EIDL is not included in taxable income.
Big 1099 Changes – If you are required to issue 1099s – there are big changes here. The 1099-MISC form for services (used to be Box 7 of Form 1099-MISC) has been replaced by a new 1099-NEC form. The deadline for this form is Feb. 1 with no extensions. The penalties for late filing is $110 per form if filed before 8/1, $270 per form if after 8/1, and $550 if found that the form was willfully not filed.
