Portable Sanitation Association International

Association Insight January 6, 2021

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ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION JANUARY 6, 2021 Page 2 Provisions of the New Coronavirus Relief Package…continued from page 1 Continued on page 13 The CAA includes the following provisions relevant to portable sanitation companies: • Expanding the Paycheck Protection Program (PPP). An additional $284 billion has been allocated for the PPP. Businesses that already received a PPP loan will be eligible to get a second one under the new terms. Some of the PPP funds will be set aside for the smallest businesses and community-based lenders, and the relief package also provides $20 billion in Economic Injury Disaster Loans for smaller businesses. • Extending the Work Opportunity Tax Credit (WOTC). The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire and retain individuals from target groups with significant employment barriers (e.g., veterans, ex-felons, persons from poorer circumstances, etc.). Employers can claim about $9,600 per employee in tax credits per year under the WOTC program. Additionally, there is no set limit to the number of individuals an employer can hire in order to claim the tax credit. This program has been extended through December 31, 2025. • Health and dependent care flexible spending arrangements. The CAA relief package allows taxpayers to roll over unused amounts in their health and dependent care flexible spending accounts from 2020 to 2021 and from 2021 to 2022. This provision also permits employers to allow employees to make a 2021 mid-year prospective change in contribution amounts, which can help them respond more effectively to potential out-of-pocket healthcare costs later in the year or early in the following year. • Extending the employee retention tax credit. The Employee Retention Credit under the CARES Act encourages businesses to keep employees on their payroll. Under the CAA, the refundable tax credit has been increased. Eligible employers whose businesses have been financially impacted by COVID-19 can now claim 70 percent (up from 50 percent) of up to $10,000 in wages paid. Businesses with PPP loans can now qualify for this program as well. • Deduction for business meals. The CAA provides a temporary allowance of full deduction for business meal food and beverage expenses provided by a restaurant that are paid or incurred in 2021 and 2022. The previous deduction was for only 50 percent of such expenses. • Employer credit for paid family and medical leave. Back in 2017, the Tax Cuts and Jobs Act provided a federal tax credit for employers who provide paid family and medical leave to their employees. The CAA legislation extends the employer credit through December 31, 2025, and it applies to wages paid in taxable years beginning after December 31, 2020. • Employer credit for paid sick leave and family leave. In March 2020, the FFCRA provided a refundable payroll tax credit for mandated paid sick and family leave. The CAA extends the tax credit through March 2021 for employers that continue to voluntarily offer paid sick and family leave to their employees. • Employer-provided student loan repayment. The original CARES Act allowed employers to provide student loan repayment as a benefit for employees through December 31, 2020. The CAA legislation has extended this benefit through December 31, 2025. This means an employer may contribute up to $5,250 annually toward an employee's student loans, and such payment would be excluded from the employee's income. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (e.g., tuition, fees, and books) provided by the employer under existing law.

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