Stimulus Package Loan Against Taxes

For example the package broadens the eligibility for stimulus payments.

Stimulus package loan against taxes. The latest round of coronavirus stimulus legislation introduced in congress on monday includes some major tax provisions and changes for accountants to watch out for in the new year. In addition to more paycheck protection program funds available congress passed tax relief for small businesses. There is welcome relief for small businesses.

So if they structure it the same way which they will you will pay that money back when you file your 2020 taxes in 2021. Kufeld cpa partner leo parmegiani cpa partner and christopher migliaccio jd senior manager. If you are a small business owner the covid 19 stimulus package that congress passed on monday evening december 21 2020 has some very good news.

Tax provisions of new stimulus package. The caa authorizes recovery rebates also known as economic impact payments but more commonly referenced as the individual stimulus payments in the form of a refundable credit of 600 per individual and 600 for each qualifying child of a taxpayer. New coronavirus stimulus package contains some big tax items.

The one time stimulus payment is an advance on a refundable tax credit meant to offset your 2020 federal income taxes but instead of waiting until 2021 to get the cash you get it now. This in depth webinar details and explains these new tax rules so that tax practitioners will be able to advise their clients regarding changes impacting 2020. This bill contains thousands of pages of newly enacted laws including many changes to the internal revenue code.

Before you get excited about the 1 000 stimulus package being discussed please remember that when bush gave that stimulus it was a deduction from your tax refund in the next year. This point reverses the initial guidance of the irs and fulfills the congressional intent in the cares act from march 2020. This is whether or not the loan is to be forgiven.

On december 21 2020 the house and senate passed the 2021 consolidated appropriations act and it now awaits signature from the president. It will come as a relief to many to learn that the new stimulus package allows for expenses paid with the proceeds of ppp loans to be fully deductible for tax purposes.