Now that the 2021 Consolidated Finance Law (2021 CAA) was officially promulgated by President Trump, customers will likely wonder which of the unprecedented relief options made available in 2020 will continue in 2021.

While Congress acted provide ongoing protections to individuals and small businesses, not all relief options will continue into 2021, although the Covid-19 pandemic continues to impact employers and employees.

As the New Year approaches, it’s important for advisors to take a moment to understand some of the top issues that can impact clients in the New Year, both at the personal and small business level.

See: 10 tax changes in the new COVID relief package

Individual provisions

CAA 2021 authorizes a second round of $ 600 stimulus checks for people with incomes below the applicable thresholds.

As with the first round of stimulus checks, the availability of stimulus begins to wane for people earning at least $ 75,000 per year ($ 150,000 for joint filers). However, customers should be told that politicians continue to debate whether the $ 600 stimulus should be increased to $ 2,000 – so that payments can be delayed.

Importantly, the law also provides up to $ 300 per week in enhanced unemployment benefits until March 2021, and also extends unemployment compensation to self-employed and concert workers who would otherwise not be. eligible to receive unemployment benefits.

Impact on employment benefits

The CARES Act permitted a tax-free student loan repayment benefit. Employers are permitted to reimburse up to $ 5,250 per year for student loan payments from an employee tax-free to the employee.

The CAA 2021 extended this provision to amounts reimbursed under an eligible educational assistance program before January 1, 2026.

On the other hand, the FFCRA mandate that required all small business owners to allow employees to take paid time off related to Covid-19 was technically allowed to expire on December 31.

However, the law provides that employers can voluntarily authorize paid vacation and receive a tax credit for wages paid during the employee’s leave until March 31, 2021. This tax credit has also been extended self-employed taxpayers who can meet the existing criteria for leave.

Employers should consider whether they now wish to implement a program to continue FFCRA paid sick leave in the absence of a federal mandate – also considering whether state and local rules might require paid time off after the end. expiration of the federal rule.

The CAA 2021 also extended the deadline for reimbursing employee deferred social charges. Employers have been allowed to defer withholding on the employee’s share of Social Security employment taxes from September 1, 2020 until December 31, 2020.

Previously, the amounts had to be repaid no later than April 31, 2021. Under the CAA 2021, this repayment period is extended until December 31, 2021 (penalties will begin to accumulate on January 1, 2022 in the absence of additional measures).

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