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COVID-19 and your taxes

COVID-19 AND YOUR TAXES

Now is an important time for every client and business owner to understand how to navigate the impacts of the current coronavirus nationwide.

Q: How will the current COVID-19 situation  impact you, your business taxes, and your personal Tax filings or obligations?

We have prepared some important information for you to cover the IRS and government plans and proposed Temp. Regs. for adding time to the extension to file deadlines; changes proposed in the employee/employer tax witholdings; tax relief for proposal for deferring payment interest free for 90-days; waiver of penalties for affected taxpayers; and possible disaster credits for business affected by “Shelter in Place” local polices. Also, remember to review your business insurance policies for coverage on “Business Interruption” claims you may be eligible to file.

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IRS NewswireApril 22, 2021

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Issue Number:    IR-2021-91

Inside This Issue

Treasury Department and IRS provide safe harbor for small businesses to claim deductions relating to first-round Paycheck Protection Program loans 

WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Revenue Procedure 2021-20 for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of tax relief legislation in December of 2020.

Under prior guidance, businesses that received PPP loans to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments could not deduct corresponding expenses.

With the Dec. 27, 2020, enactment of the Consolidated Appropriations Act, 2021, businesses now may claim these deductions even though they received PPP loans to cover original eligible expenses. These businesses can use the safe harbor provided by this guidance to deduct those expenses on the return for the immediately subsequent year.

More information on COVID-19 related tax relief for business can be found on IRS.gov

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While the current situation is a very dynamic and moving target, we want to inform you of some of the major impacts that taxpayers can expect. We want to remain a reliable source of guidance for all who may have questions on how the tax impacts will affect you and your business. Download your guide. 

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