The staff at the Archery Trade Association (ATA) wants to bring your attention to the “2021 Consolidated Appropriations Act." The legislation was successfully passed and was signed into law on Dec. 27, 2020.
The previous treatment of Paycheck Protection Program (PPP) expenses to borrowers as non-deductible has been cured, and PPP expenses will now be treated as deductible. This applies to all PPP loans, even if the loans were already forgiven at the date this legislation was enacted.
This bill allows a business to receive a PPP loan AND take advantage of the Employer Retention Credit (ERC). Previously, ATA members who took advantage of the PPP were precluded from taking advantage of the ERC.
Analysis should be performed on the value of a Second Round PPP loan vs the value of the expanded ERC (through July 1, 2021). Qualification for the ERC based on a reduction of gross receipts (must be 80% or less in 2021) compared to the same calendar quarter in 2019 in order to qualify. There are additional qualifications if the entity has been subject to a government shutdown.
We will update this news as more information becomes available from the IRS and the SBA on how several of these expanded or additional programs will work.
For more information click here, or contact Nathan Fitzgerald, CPA/Director at BKD CPAs & Advisors at (417) 865-8701 x23097 or nfitzgerald@bkd.com.
