Economic Stimulus and Tax Extenders Ride the Coattails of Government Funding in the Consolidated Appropriations Act, 2021

Sub-topics of this lengthy article are published on adjoining pages.

By Don Carpenter and Tim Thomasson
January 2021

In the waning days of 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (the Act), a $1.4 trillion omnibus spending bill that provides appropriations for funding 12 government departments.

But this was overshadowed by the additional $900 billion included in the bill as a second round of economic stimulus in response to the pandemic, and new and extended tax provisions intended to advance the nation’s combined energy policy and further assist struggling families.

The following sections cover key provisions of the Act.

• Pandemic Relief for Individuals with $600 Direct Payment
• Other Provisions Target Specific Needs
• Surprise Medical Billing Also Addressed
• Paycheck Protection Plan Round 2 Headlines Relief for Small Businesses
• Other Business Provisions Further Encourage Retention of Employees

The Act Also Contains Many Tax Provisions Impacting Individuals and Businesses

The Act includes a combination of routine, year-end tax extenders, enhancements to provisions enacted with CARES and new provisions attributable to the COVID pandemic. We have mentioned some of the provisions in the sections above. While the discussions in the sections below do not cover every tax provision in the Act, we discuss the ones we think will be most relevant to practitioners.

• Individuals May Benefit from Additional Exclusions, Deductions and Credits
• Additional Disaster Relief is on the Way
• Many Provisions Will Have a Favorable Impact on Businesses
• A Boost for the Dining Food Service Industry
• Additional Provisions Support Energy Efficiency

For an election year, 2020 saw major economic and tax legislation. The incoming Biden administration has also promised that this is not the end of government assistance to buttress the economy and assist struggling families. With that in mind, 2021 promises to be just as interesting.

About the Authors:

Don Carpenter, MSAcc/CPA, is clinical professor of accounting in the Hankamer School of Business at Baylor University. Contact him at Don_Carpenter@baylor.edu.

Timothy S. Thomasson, CPA, MTAX, is Graduate Program Director and an associate clinical professor in the Hankamer School of Business at Baylor University. He is also a practicing CPA. Thomasson can be reached at Timothy_Thomasson@baylor.edu.