News & Announcements

2021 Depreciation Limits Announced for Cars and Trucks

The IRS has issued Rev. Proc. 2021-31 which provides annual updates to depreciation limitations for passenger automobiles. The following represents a summary of that document.

  • Autos where first-year bonus depreciation applies and were acquired after September 27, 2017 and placed in service during 2021 calendar year:

Deprecation limits

  • $18,200 for the first tax year (up $100 from 2020)
  • $16,400 for the second tax year (up $300 from 2020)
  • $9,800 for the third tax year (up $100 from 2020)
  • $5,860 for each succeeding year (up $100 from 2020)
  • Autos where no first-year bonus depreciation applies and placed in service during 2021 calendar year:

Deprecation limits

  • $10,200 for the first tax year
  • $16,400 for the second tax year
  • $9,800 for the third tax year
  • $5,860 for each succeeding year
  • The Rev. Proc. 2021-31 also details limits on deductions for the cost of leasing passenger vehicles which is intended to be substantially equivalent to the depreciation limitation amounts.

Table 3 indicates those amounts for an auto lease term beginning in 2021.

WISCONSIN TOMORROW SMALL BUSINESS RECOVERY GRANT

$420 Million is now available through the Wisconsin Tomorrow Small Business Recovery Grant Program.

Grant amounts are expected to be $5,000 for each eligible Wisconsin business.

Grant money can be used for any business operating costs, including but not limited to wages and salaries, rent, mortgages, and inventory, and/or for health and safety improvements.

Applications are currently being accepted here and will be open until 4:30 pm on Monday, June 7, 2021.

Read more: WISCONSIN TOMORROW SMALL BUSINESS RECOVERY GRANT

ENHANCED CHILD TAX CREDITS COMING IN JULY

As a result of the most recent $1.9 Trillion relief package, the IRS will be issuing child tax credits in the form of monthly payments, expected to begin in July of 2021.

In 2021, taxpayers can receive a fully refundable credit for dependents:

  • $3,600 per child under 6 years of age
  • $3,000 per child under 18 years of age

These credits are available in full to single taxpayers with Adjusted Gross Incomes of $75,000 or less and $150,000 or less for married filing joint taxpayers ($112,500 or less for head of household)

There are two phase-out calculations that can apply to taxpayers that earn above these limits.

If you have questions about how this may impact your situation, please reach out to us.

EMPLOYEE RETENTION CREDIT UPDATES

As a result of legislation from December of 2020 and recent notice by the IRS, there are new rules for eligibility of the Employee Retention Credit (ERC)

  • Credit is available to all businesses in operation during January 1, 2021 through June 30, 2021 IF:
    • A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19, or
    • A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% (20% or greater decline) of the gross receipts in the same calendar quarter in 2019
  • Refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages paid to employees after December 31, 2020, through June 30, 2021
    • Qualified wages are limited to $10,000 per employee per calendar quarter in 2021 ($7,000 per employee, per quarter for a total of $14,000 per employee in 2021)
  • Qualified Wages defined:
    • For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services. 
    • For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts. 
  • The ERC is claimed on the Employer’s Quarterly Federal Tax Return Form 941 using Worksheet 1 from the last page (20) of the form’s instructions to calculate the credit. (both attached for reference)

pdff941.pdf819.53 KB   pdfi941.pdf303.36 KB

Read more: EMPLOYEE RETENTION CREDIT UPDATES

Bill to be introduced to extend Estimated Payment due date

Thursday, Rep. Lloyd Smucker, R.-Pa., announced that he is introducing a bill that would postpone the due date for first-quarter 2021 estimated tax payments from April 15, 2021, to May 17, 2021.

  • The IRS’s original postponement of the filing deadline indicated no extension would be made for 1st quarter estimated payments
  • Firms have been questioning the effectiveness of an automatic extension that did not delay the estimates
  • The AICPA has been advocating for a delayed 1st quarter estimate due date since late March

Shuttered Venue Grant Portal Closes for Repairs on Opening Day

The $16.25 billion Shuttered Venue Operators Grant (SVOG) program opened for the first time on Thursday and closed the same day for repairs.

  • The SBA acknowledged technological difficulties almost immediately after opening, then later in the afternoon shut the portal down completely.
  • Along with the shutdown came news that the program funds are not expected to be released until late April at the earliest.
  • Concerns have also been raised by the Inspector General about the potential for fraud with lack of fund accountability.  Where recipients need little documentation to obtain lump sums in the form of Grant money.