The Consolidated Appropriations Act of 2021

The 2^nd Covid 19 Relief Bill, that some are calling PPP2, includes some well publicized provisions including $600 stimulus payments to individuals earning under $75,000 and couples earning under $150,000 plus additional $600 payments for up to two dependent children, and a $300 weekly unemployment subsidy that goes through March 14, 2021.

The national eviction moratorium was extended through January 31, 2021.

The bill also contains funding for airlines, transit systems, colleges and schools including support for HVAC repair and replacement to mitigate virus transmission, and 10 billion in child care assistance.

There is additional PPP funding that is available to new applicants and prior PPP loan recipients who have had a 25% decrease in revenue in any 2020 quarter compared with the same quarter in 2019. Those applicants also must have 300 or fewer employees and have used all of their first PPP loan.

The new PPP loans are now also available for nonprofit business leagues, and they continue to be available to nonprofits including churches.

The same expenses qualify for the new PPP loans, and in addition worker protection and facility modification expenditures as well as certain technology costs are also includable.

The bill gives SBA only 24 days to create a simplified forgiveness application process for loans of $150,000 or less. Borrowers will submit a certification about the number of employees they were able to retain as a result of the loan.

Previously EIDL loan advances (which were forgivable) offset the amount of forgiveness a PPP loan recipient could claim. That requirement is eliminated.

Businesses and advocacy organizations were jubilant that the bill reverses the IRS position that expenses paid with forgivable PPP loans were not deductible. Now those expenses will be deductible.  The forgiven loan is not federal taxable income.

The bill extends and expands increased limits for charitable contributions through 2021.  The $300 deduction for non-itemizers continues into 2021, and for 2021 it goes to $300 per spouse for individuals who are married and filing a joint return ($600 total).  The CARES act had increased the charitable contribution limit from 60% to 100% of adjusted gross income.  The new law extends this into 2021. These limits are only for contributions to public charities.

Several expiring provisions were extended permanently or for a period of years including:

Permanent extensions

• a 7 ½% (rather than 10%) threshold for medical expense itemized deductions
• the deduction for energy efficient commercial buildings

Five year extensions

• the New Markets Tax Credit
• employer credit for paid family and medical leave
• work opportunity credit
• personal residence loan forgiveness exclusion from income

Two year extensions

• the credit for certain residential energy efficient property
• the investment tax credit for solar and certain other energy efficient property, and
• a 10% credit for certain nonbusiness energy property.

There are also some less commonly used extenders including a 30% credit for plug-in electric motorcycles like the Harley-Davidson LiveWire.

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