After several days of uncertainty, the Consolidated Appropriations Act of 2021, which included a fourth round of COVID-19 stimulus and tax extender provisions, has been signed into law as it passed both chambers of Congress, which, among many other items, allows deductions for expenses funded by forgiven Paycheck Protection Program loans. For additional details, please see our previous tax alert. The president last week had demanded changes to the legislation, including an increase of the $600-per-person stimulus checks to $2,000.
The House is expected to vote on increasing the direct payments from $600 to $2,000 as early as today. No draft of income limitations or phase-outs is currently available at the time of this release. However, we do not expect the bill to prevail in the Senate, but will continue to monitor this legislation and provide updates as needed.
Please reach out to your Baker Tilly tax advisor to discuss how the above may affect your tax situation.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.