TAX PRO PLUS LA

Required Minimum IRA Distributions Will Resume in 2021

As part of the CARES Act, the requirement for older taxpayers to take required minimum distributions (RMDs) from their retirement plans was waived for 2020. This primarily was due to the anticipated drop in value for most investments as a result of the economic effects of COVID-19, which actually did not materialize.

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Video: Special Rules Apply to 2020 EITC and Child Credit

Congress came up with a special way to calculate the 2020 Earned Income Tax Credit and the Child Tax Credit to help people affected by the pandemic.

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Special Rules Apply to 2020 EITC and Child Credit

Because of the pandemic, many individuals have seen their employment (earned) income plummet. In that situation, two very important tax credits, the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), which are based in part on earned income, will be adversely affected, hitting lower-income taxpayers with a double whammy.

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Mom & Pop Businesses Move to Front of the Line for PPP Loans

At the direction of the White House and effective on Wednesday, February 24, 2021, the SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger PPP-eligible businesses will still have plenty of time to apply for and receive support before the program expires on March 31, 2021. In addition, these small businesses will be able to base their loans on gross income. Although details are sketchy, sources have indicated loans are available based upon 2.5 times the average 2019 monthly gross income, rather than net profit.

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The Workforce Evolution Will Continue Into 2021

Never has the US seen a year, nor a labor market, quite like that of 2020. Moving into the new year, 2021 is expected to continue upon the COVID-19-induced labor market trends and employers must evolve with this new normal.

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