Nearing midnight on Dec. 21, Congress approved year-end appropriations and stimulus legislation that the president is expected to sign before the new year. The more than 5,500 pages of legislative text include extension and revision of certain COVID-19-related stimulus provisions enacted earlier this year, such as the Paycheck Protection Program (PPP) and enhanced unemployment benefits. The legislation also includes a broad range of tax provisions that are both COVID-19-related and non-COVID-19-related.
Among other things, the tax provisions in the legislation:
- Clarify that PPP loan forgiveness is excluded from income and that deductible expenses paid with PPP loan proceeds remain deductible even if the loan is forgiven
- Extend the tax credit for COVID-19-related paid family and sick leave, including certain improvements to the credit
- Exclude from gross income certain COVID-19-related grants, loans, and subsidies and provide authority for the IRS to forego information reporting on these amounts
- Allow full deduction for business meals purchased from restaurants for two years
- Provide a second round of stimulus checks of up to $600 per eligible individual
- Temporarily extend the ability of individuals claiming the standard deduction to claim a charitable contribution deduction and increase the eligible amount for joint filers from $300 to $600
- Give individuals until the end of 2021 to repay deferred 2020 payroll taxes
