Wealth Strategy Insights

Important COVID-19 Tax-Related Provisions for 2021

13 January 2021

On December 27, 2020, President Trump signed into law the Economic Aid to Hard-Hit Small Businesses, Nonprofits, & Venues Act (the PPP2 Act), and The Consolidated Appropriations Act. The Act provides extensive relief in response to the COVID-19 pandemic which includes $284 billion for the Payroll Protection Program (PPP) and another round of “recovery rebate” payments to individuals.

Here is a brief overview of some of the tax-related provisions that may affect individuals and business:

Individuals

Businesses and other employers

While many of the original provisions of the PPP that were part of the CARES Act passed in March 2020 remain intact, there are some important differences. For businesses that did not participate in the first round of the PPP, and are considering taking an initial loan, most of the provisions of the original PPP apply, namely:

For businesses that did borrow during the first round of the PPP, they may be eligible for a second PPP loan. For businesses taking a second PPP loan, there are a few notable differences:

The PPP2 Act and The Appropriations Act also contain other important provisions, as follows:

While this is not an exhaustive list of the 5500 plus-page legislation, it does provide a brief look at some of the most significant tax-related provisions. Before making any decisions as they relate to the PPP, business owners should consult with their lending, legal, and/or tax professionals. Additional guidance may become available in the coming weeks and months, so it may be prudent to remain in contact with these professionals to receive the latest information.

Calamos Wealth Management and its representatives do not provide accounting, tax or legal advice. Each individual’s tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation. For more information about federal and state taxes, please consult the Internal Revenue Service and the appropriate state-level departments of revenue, respectively. This information is provided for informational purposes only and should not be considered tax or legal advice.
You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized advice from Calamos Wealth Management LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Calamos Wealth Management LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. If you are a Calamos Wealth Management LLC client, please remember to contact Calamos Wealth Management LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Calamos Wealth Management LLC’s current written disclosure statement discussing our advisory services and fees is available upon request.
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