The President signed the $2.3 trillion dollar COVID-19 relief and government funding bill on Sunday, December 27, 2020.
Among the COVID-19 relief changes in the bill are:
Employee Retention Credit
- Extended through June 30, 2021
- Retroactively allows employers who received PPP to also claim ERC with respect to wages that were not paid for with forgiven PPP loans.
- For 2021 only,
- Makes the credit available to public colleges and universities as well as public entities whose primary function is providing medical or hospital care
- increases the credit from 50% to 70% of qualified wages
- Increases qualified wages from $10,000 total to $10,000 per quarter
- expands eligibility by reducing the reduction in gross receipts test from 50% to 20%
- increases the 100-employee delineation for determining qualified wages to 500 employees
- Additional funds available for PPP loans with priority for businesses that never received the loan
- Opportunity for some businesses to receive a second PPP loan
- Allows the deductibility of expenses paid for with forgivable PPP funds providing a double-benefit
- Extends the Work Opportunity Tax Credit (WOTC) for five years
- Extends the Federal Empowerment Zone Tax Credit (FedEZ) for five years
- Extends the Indian Employment Credit (IEC) for one year
There is also a new retention credit for 2020 qualified disasters patterned after credits which have been made available following previous natural disasters.