After a bit of political posturing on stimulus details in December, the $900 billion Consolidated Appropriations Act of 2021 (2021 CAA) was signed into law by President Trump as the COVID-19 pandemic continues to impact employers and employees.
Here’s a quick recap of five key highlights providing stimulus to those that need it:
The new law authorized a second round of $600 stimulus checks for people with income that meets the criteria. The checks start to phase out for individuals who earned at least $75,000 in 2019 and $150,000 for joint filers.1
The law provides up to $300 per week in enhanced benefits through March 2021. The benefits extend to self-employed individuals and gig workers.2
The 2021 CAA extends the provision that allows employers to repay up to $5,250 annually towards an employee’s student loan payments. The payments are tax-free to the employee.3
The 50% limit on the deduction for business meals has been lifted. Business meal expenses after December 31, 2020, and before January 1, 2023, may now be fully deductible. Please consult your tax, legal, or accounting professional for more specific information regarding this provision.4
The new law contains $284 billion in relief for a second round of Payment Protection Program loan funding. Businesses with 300 or fewer employees may be eligible for a second loan. “Second-draw” loans are available through March 31, 2021.5
As 2021 gets underway, expect some additional guidance from regulators on 2021 CAA. Our office will keep an eye out for updates and pass information as it becomes available.
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Financially, many of us associate the spring with taxes – but we should also associate December with important IRA deadlines. This year, like 2020, will see a few changes and distinctions. December 31, 2021, is the deadline to take your Required Minimum Distribution (RMD) from certain individual retirement accounts.
There’s an old Wall Street maxim that says, “markets climb a wall of worry.” And these days, there’s plenty to worry about with the trend in long-term interest rates and bonds.
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