Tax News & Views America Rescue Plan Roundup

March 1, 2021

Tax provisions in the American Rescue Plan Act – Alistar M Nevius, J.D., Journal of Accountancy. “The $1.9 trillion stimulus plan passed by the House of Representatives early Saturday contains many tax provisions, including a new round of economic impact payments, a tax credit for COBRA continuation coverage, and the expansion of several other tax credits.”

“The bill extends the employee retention credit through the end of 2021. The employee retention credit was originally enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, and it allows eligible employers to claim a credit for paying qualified wages to employees.

Under the bill, the employee retention credit would be allowed against the Sec. 3111(b) Medicare tax.”

Senate Democrats Look for Backup Plan to Raise Minimum Wage Through Taxes – Kristina Peterson, Richard Rubin, and Eric Morath, Wall Street Journal $. “The plan would impose tax penalties on large companies that aren’t paying the higher wage Democrats seek and create tax incentives for small companies to do so. Democrats hope the chamber’s parliamentarian would allow them to include the modified plan in the coronavirus relief package.”

Democrats adjust language on child tax credit in relief bill – Naomi Jagoda, The Hill. “House Democrats are slightly modifying language in a provision on the child tax credit in their coronavirus relief package in an effort to prevent the Senate parliamentarian from ruling against the provision.”

“The original version of the relief package directs the Treasury Department to make advance payments of the child tax credit on a monthly basis. A manager’s amendment to the bill replaces the word “monthly” with “periodic.”

House Passes Stimulus Bill; Minimum Wage Tax Penalty Debated – Jad Chamseddine, Tax Notes. “The House passed a $1.9 trillion stimulus package with several changes to the tax code as lawmakers explore potential ways to levy tax penalties on companies that don't pay workers a minimum of $15 per hour.”

The $1,100 Per Child Tax Rebate Bonus For Divorced And Unmarried Parents – Peter J Reilly, Forbes. “Divorced and never married co-parents have the chance to pick up an extra $1,100 per dependent child when they file their 2020 returns. It requires trust, cooperation and running multiple versions of their 2020 returns.”


What cryptocurrency's booming values mean to owners' taxes – Kay Bell, Don’t Mess With Taxes. “The U.S. tax agency considers bitcoin and its brethren as investments, which means transactions involving the asset potentially are subject to capital gains tax. The IRS has been ramping up its efforts to ensure that those who trade in it also understand this and pay all the associated cryptocurrency taxes.”

Are California $600 Stimulus Payments Taxable? Russ Fox, Taxable Talk. “The payments will be going out after taxpayers file their 2020 tax returns.  One client asked me, “Is that payment going to be taxable income on my federal tax return?”  The answer is clearly yes.”

IRS Disputes Slow Filing Season Start – William Hoffman, Tax Notes ($). “The IRS released a new interpretation of its early statistics for 2021 tax return filing , but at least one national tax professional representative is skeptical of the agency’s framing of the figures.”

“Comparing the 2020 filing season with one that started three weeks late, and where many taxpayers hadn’t received their documents, is definitely an apples-to-oranges comparison,” said Stephen F. Mankowski of the National Conference of CPA Practitioners.”

Crayon-eating Marine launches edible crayon business – Sarah Sicard, Military Times.

“While finishing up a work project, Marine-veteran-turned-carpenter Frank Manteau decided to employ the use of a popular piece of Marine-issued gear: crayons. Switching from one color to another, he absentmindedly stuck one waxy stick in his mouth for safe keeping and continued scribbling. Before he knew it, he was doing what Marines do best: nomming on crayons.

When he finally realized the stereotype he was fulfilling, his next thought was, “Is there something to this?”

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