A dozen tax tips for the 2021 filing season

Published February 1, 2021 9:00 AM EST Updated February 24, 2021 5:44 PM EST 1 Min Read

With the convergence of multiple layers of tax legislation and IRS guidance since 2017, this year’s filing season has the potential to confuse tax preparers as well as the clients they serve. Even for those who follow legislation day in and day out, things can get complicated.

For example, the Paycheck Protection Program was initially introduced in April, then changed in June and again in December. “It’s one program but it’s been changed twice,” observed Roger Harris, president of Padgett Business Services. “If you haven’t kept up, you can be two bills behind.”

Originally, the CARES Act added this refundable payroll tax credit equal to 50 percent of qualified wages at $10,000 per year per employee paid by eligible employers from March 13, 2020, to Dec. 31, 2020 — but if the taxpayer had a PPP loan, they could not take advantage of the ERC.

The Consolidated Appropriations Act of 2021 extended and expanded the availability of the credit. Now, a company that receives a PPP loan can claim the ERC, with this caveat: A credit may not be claimed for wages paid with the proceeds of a PPP loan that has been forgiven. It may be necessary to file amended payroll tax returns to claim the credit.

Roger Russell

Senior Editor

Roger Russell is a senior editor at Accounting Today. He focuses on tax developments and compliance, and professional liability issues affecting CPAs. He is a tax attorney and has been a … Read full bio