The IRS released guidance on Thursday explaining when the temporary 100% deduction for restaurant meals is available and when the 50% limitation on the deduction for food and beverages continues to apply for Sec. 274 purposes (Notice 2021-25).

Under Sec. 274(n)(1), a deduction for any expense for food or beverages is generally limited to 50% of the amount that would otherwise be deductible. However, the Consolidated Appropriations Act, 2021, P.L. 116-260, enacted a temporary exception to the limitation for amounts paid or incurred after Dec. 31, 2020, and before Jan. 1, 2023, for food or beverages provided by a restaurant (Sec.… Read More

The U.S. Small Business Administration will officially open the Shuttered Venue Operators Grant (SVOG) application portal tomorrow, April 8, 2021, at 12 p.m. EDT for operators of live venues, live performing arts organizations, museums, and movie theatres, as well as live venue promoters, theatrical producers and talent representatives to apply for critical economic relief, as those eligible entities are some of the first that had to shutter their doors a year ago in response to the COVID-19 pandemic.

“Concerts, plays, dance performances, movie premieres, museum exhibits – these are the lifeblood of culture and community, and often the anchor for travel, tourism, and neighborhood food and retail stores.… Read More

As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than expected.

It’s important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eligible people already received the first and second payments and shouldn’t or don’t need to include this information on their 2020 tax return.

People who didn’t receive a first or second EIP or received less than the full amounts may be eligible for the 2020 RRC.… Read More

The IRS explained the changes to the employee retention credit (ERC) for the first two calendar quarters of 2021 in Notice 2021-23, which amplifies Notice 2021-20. The credit was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L 116-136, and amended by the Consolidated Appropriations Act, 2021, P.L 116-260.

The changes addressed include:

• The increase in the maximum credit amount from 50% to 70%;
  The expansion of the category of employers that may be eligible to claim the credit to include colleges and universities and entities that provide hospital or medical care;
• A modification of the gross receipts test threshold to 80% and changes in how the 80% decline in gross receipts is calculated;
• In the calculation of qualified wages, the revised definitions of small and large eligible employers are used; and
• New restrictions that limit the ability to request an advance payment of the credit to certain small eligible employers with not greater than 500 employees.

The Internal Revenue Service today issued guidance for employers claiming the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).

Notice 2021-23 explains the changes to the Employee Retention Credit for the first two calendar quarters of 2021, including:

• the increase in the maximum credit amount,
• the expansion of the category of employers that may be eligible to claim the credit,
• modifications to the gross receipts test,
• revisions to the definition of qualified wages, and
• new restrictions on the ability of eligible employers to request an advance payment of the credit.

The US Small Business Administration launched a splash page for the Shuttered Venue Operators Grant application portal in anticipation of opening applications for the critical economic relief program on Thursday, April 8, 2021.

The SVOG program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, which appropriated $15 billion for it. The American Rescue Plan Act, signed into law by President Joe Biden on March 11, 2021, appropriated an additional $1.25 billion, bringing the program funding to a total of $16.25 billion, with more than $16 billion allocated for grants.

To ensure eligible venues do not miss a window to receive assistance through the Paycheck Protection Program, the American Rescue Plan Act also amended the SVOG program so entities that apply for a PPP loan after Dec.… Read More

To help taxpayers, the Internal Revenue Service announced that it will take steps to automatically refund money this spring and summer to people who filed their tax returns reporting unemployment compensation before the recent changes made by the American Rescue Plan.

The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes.

Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund.… Read More