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Category: New Legislation

EMPLOYEE RETENTION AND THE CAA ACT

The Consolidated Appropriations Act, 2021 signed into law on December 27, 2020 (the “CAA Act”) expanded and approved the Employee Retention Tax Credit created by the CARES Act in March 2020.  The Employee Retention Tax Credit, contained within in the CARES Act, provided a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021, with an annual cap of $5,000 per employee.  Eligible employers could immediately access the credit by reducing otherwise required employment tax deposits.  Eligible employers included: (1) businesses with operations partially or fully suspended due to governmental orders caused […]

NEW M&E EXPENSE REGULATIONS for BUSINESSES

The “three martini lunch” has reappeared, as have other recent changes to the taxability of business entertainment and food and beverage expenses.  On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (the “CAA Act”), authorizing a 100% deduction for certain business meal expenses for the next two years.  Prior to the CAA Act’s implementation, the Internal Revenue Service (“IRS”) issued final regulations (“Regulations”) whereby entertainment expenses were not deductible; but depending on the nature of the expense involved, meal expenses could be partially or fully deductible. Businesses have long struggled with deduction allowances for meal and entertainment expenses.  Prior to 2018, taxpayers were generally allowed to deduct […]

THE GOVERNMENT WANTS TO HELP THOSE THAT ENTERTAIN YOU

To address the entertainment venues severely impacted by COVID-19 related closures this past year, the Consolidated Appropriations Act, 2021 included $15 billion in grants for “Shuttered Venues.” But, who qualifies? Qualified Entities The Shuttered Venue grants will be available to music or theatre venues, entertainment businesses, arts and cultural organizations, non-profit museums, and movie theatre operators.  The Act, however, specifically excludes live performances of a “prurient sexual nature” and performances deriving more than a de minimis gross revenue from the sale of products or services that are of a “prurient sexual nature.” Ineligible The Act further provides the following entities are ineligible for Shuttered Venue grants entities owned or controlled […]