COVID-19 Update: Beaird Harris has shifted a significant number of our team members to work remotely.
We continue to serve and care for our clients, just as we always have, and are available by phone, video or email.
Beaird Harris will be closed on Friday, July 3rd in observance of the Independence Day holiday.
March 22, 2021
Unemployment Income: Extends through September 6, 2021 a $300 per week supplement to federal unemployment benefits that would have expired March 14, 2021.
Unemployment Income Exclusion: A $10,200 per individual unemployment insurance exclusion for the 2020 taxable year, only for households with modified AGI of $150,000 or less. If you have already filed your 2020 return an amendment is not needed. The IRS plans to automatically issue refunds.
Stimulus Payments: A third round of Economic Impact Payments of $1,400 per individual and dependent (including dependents over age 17). Phase-out for this benefit begins at $75,000 (single) or $150,000 (married filing jointly).
Expanded Child Tax Credit: For 2021, the Act increases the child tax credit from up to $2,000 per child under the age of 17 to $3,600 for each child younger than 6 and $3,000 for each child age 6 through 17 for qualifying families. The increased credit begins to phase out at AGI of $75,000 for single taxpayers and $112,500 for married taxpayers filing joint returns. The phase out only applies to the increased credit. Families with AGI in excess of $112,500 and under $400,000 still get the $2,000 credit.
Child and Dependent Care Credit: For tax years beginning in 2021, eligible expenses have increased from $3,000 per qualifying child to $8,000 per qualifying child.
Student Loan Forgiveness: For student loans forgiven by the lender for the years 2021 – 2025, the income will not be taxable. The Act does not forgive student loans, it allows forgiveness of those loans to be excluded from taxable income.
COBRA Premium Subsidy: Six months of free COBRA benefits from April 1, 2021 through September 30, 2021 for employees (and their family members) who experience a loss of group health coverage due to involuntary termination or reduced hours of employment. Employees who are eligible for and elect COBRA coverage, are not required to pay the otherwise applicable COBRA premium, during this six-month period.
Employee Retention Credit: The Act extends Employee Retention Credit (“ERC”) through December 31, 2021. After June 30, 2021, the ERC offsets the employer’s share of Medicare tax.
Note: Beaird Harris will be sending out an update to this important provision to our business clients soon.
Credits for Paid Sick and Family Leave: The Act extends tax credits for employer-provided paid sick and family leave, which were established by the Families First Coronavirus Response Act (“FFCRA”), through September 30, 2021 It also increases the wages covered by the paid family leave credit to $12,000 per employee (originally $10,000), between April 1, 2021, and September 30, 2021. Additionally, it resets the 10-day limit starting April 1, 2021 for employers claiming the credit for paid sick leave provided to their employees.
COBRA: Credits for providing subsidized COBRA benefits. When employers provide COBRA coverage over the period referenced above, they are then eligible to take a payroll tax credit equal to the cost of the coverage.
Targeted Economic Injury Disaster Loans Advances and Grants Under the Restaurant Revitalization Fund: Advance targeted Economic Injury Disaster Loans (“EIDL”) advances that are not repaid and grants under the Restaurant Revitalization Fund (“RRF”) will be excluded from income, and deductions for associated expenses will be allowed. This is in accordance with prior legislation regarding PPP.
Note: if you have a restaurant, bar or similar establishment, please contact us to discuss this in more detail.
As always, we are here to help you sort through the myriad of new and evolving tax legislation. Don’t hesitate to reach out to discuss your personal situation.
No Professional Advice, Client Relationship, or Reliance on Information
Please note that any information or content on our Website, or any forms or tools on our Website which allow you to submit information or make calculations, and your use thereof, are not intended to provide any kind of professional advice, consultation or service, including but not limited to, legal, accounting, tax, or business advice. Nor does any such information, content, forms, or tools, or your use thereof or reliance thereon, create or constitute an attorney/client, accountant/client, or consultant/client relationship. You should therefore not use our Website or reliance on any information, content, forms, or tools on our Website as a substitute for any kind of professional advice. Rather, you should consult with a licensed professional, including one employed by our Company, for any accounting or tax questions you may have. You agree that we will not be liable to you or to any third party to the extent you treat or consider any information, content, forms, or tools on our Website as constituting any kind of professional advice. The information and content, including but not limited to forms and tools, presented on or made available through our Website are made available solely for general information purposes. We, therefore, do not warrant the accuracy, completeness or usefulness of any such information, content, forms, or tools, and any reliance you place on the same is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to our Website, or by anyone who may be informed of any of its content.
Our Website provides illustrative lists of services that we provide. Nothing contained on our Website shall be construed as an offer or guarantee to provide any particular services to you, nor shall anything on our Website be construed as a direct solicitation for employment by any persons, companies, or organizations. Prior results we have obtained for others do not guarantee a similar outcome.