CARES ACT EXTENSIONS AND PROVISIONS

Cares act extensions and provisions. Educator expenses for protective equipment. The bill requires the Treasury to issue regulations or other guidance providing that the cost of personal protective equipment and  other supplies used for the prevention of the spread of COVID-19 is treated as an eligible expense for purposes of Sec. 62(a)(2)(D)(2). Money purchase pension plans: The CARES Act temporarily allows individuals to make penalty free withdrawals from certain retirement plans for coronavirus related expenses, permits taxpayers to pay the associated tax over three years, allows taxpayers to recontribute withdrawn funds, and increases the allowed limits on retirement plan loans. The bill adds money purchase pension plans to the retirement plans qualifying for these temporary rules. The provision applies retroactively as if included in Section 2202 of the CARES Act. Cares act extensions and provisions.

Farmer Net Operating Loss Carry backs: The bill allows farmers who elected a two year net operating loss (NOL) carry back prior to the CARES ACT to elect to retain that two year carry back rather than claim the five year carry back provided in the CARES Act. This section also allows farmers who previously waived an election to carry back an NOL to revoke the waiver. Payroll Tax Credits: The bill extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, P.L. 116-127, through the end of March 2021. It also modifies the payroll tax credits so that they apply as if the corresponding employer mandates were extended through March 31, 2021. The bill also allows individuals to elect to use their average daily self-employment income form 2019 rather than 2020 to compute the credit.

Deferral of employees portion of payroll tax: In August, Trump issued a memorandum allowing employers to defer with withholding, deposit and payment of the employee portion of the tax from September 1st, 2020, through December 31st, 2020. Many employers didn’t do it, fearing a tax liability and the need for IRS Tax Resolution.