On March 11, 2021, President Joe Biden signed the American rescue plan of 2021. That bill included stimulus payments of $ 1,400 for most taxpayers, plus $ 300 a week for the unemployed. That made the first $ 10,200 taxpayers received as unemployed in 2020 non-taxable, adding to tax credits for employers who quit allowing paid medical services, and another round of PPP loans.
Individuals with incomes up to $ 75,000 per year, heads of household with incomes up to $ 112,500, and couples with incomes up to $ 150,000 would be eligible for cash payments of $ 1,400. The stimulus payments expire when incomes rise. Individuals with annual incomes of $ 80,000 or more, heads of household with incomes of $ 120,000 or more, and couples with incomes of $ 160,000 or more would not receive payment. Eligible dependents, including adult dependents, would also receive $ 1,400 each. Individuals on Social Security, Supplemental Security Income (SSI), Veterans Administration (VA), and Railroad Retiree benefits will receive payment automatically, even if they do not normally file tax returns.
The good news is that the first $ 10,200 received by most taxpayers with unemployment benefits up to $ 10,200 will not be taxable for 2020. If you've already filed your 2020 tax return, the IRS will ask you not to file a change as they will take care of the adjustment for you and, if necessary, send you the tax differential.
Tax credits for companies offering paid vacation to their employees would be extended through September 30th. This includes offering family carers the same leave that parents and workers who have to fend for themselves have. The bill wouldn't require companies to offer paid vacation.
The American Rescue Plan extends eligibility for the PPP to virtually all Section 501 (c) organizations except Section 501 (c) (4) Social Organizations and Section 501 (c) (7) Social Clubs and relaxes the requirements for the Employer size for larger organizations under Sections 501 (c) (3), 501 (c) (6) and 501 (c) (19) and increases available PPP funding by $ 7.25 billion.
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Craig W. Smalley, MST, EA is the founder and CEO of CWSEAPA, PLLC. He was admitted to the Internal Revenue Service as an Enrolled Agent and holds a Masters in Taxation from UCLA. Craig has been with the practice since 1994 and has an extensive background in US tax law and US tax law. He specializes in the taxation of individuals, partnerships and companies for wealthy clients. Structuring and restructuring of companies; and representation before the IRS in relation to negotiations, audits and appeals. Craig is currently a columnist for CPA Practice Advisor and AccountingWEB and has published 12 books. His articles have been featured in publications such as the Wall Street Journal, the New York Times, and the Christian Science Monitor. He has been interviewed and has appeared as a guest on numerous radio shows and podcasts. Craig can be reached at [email protected].