What’s new in 2021 for small businesses?

• PPP loans for small businesses. PPP loan forgiveness is no longer a taxable event for your small business. The same goes for any PPP Round 2 loans your business receives this year if they qualify.
• State and Local Income Tax Consequences of PPP Loan Forgiveness
  While the federal income tax consequences of PPP loan forgiveness are now largely resolved, state and local taxes are another matter.  All but a few states directly tie their income tax laws to the federal tax code in some way, and they tend to do it in one of two ways: “rolling conformity” and “static conformity.” As of this article’s publish date, Minnesota PPP Loan Forgiveness is taxable.
• 100% meal deductibility. Business meals are typically only deductible at 50%. To help aid restaurants during the pandemic, a new law allows for 100% meal expense deductions for both 2021 and 2022.
• Numerous general business credits extended. New laws extend expiring tax credits for many small businesses. There are too many to mention here, but common extended credits include; work opportunity credit, credit for paid family and medical leave, and employer paying employee student loan payments.

Remember, these are still early days in changing the tax code for 2021.

Questions? Visit with one of our tax experts.