President Trump signed the COVID-19 relief package over the weekend, and with that came some updates to be aware of for the upcoming weeks and tax season. Some of these updates include new stimulus information, along with new rules regarding meal expenses for businesses.
Passing this relief bill means that another stimulus check is coming but the amount of the check is still in negotiations. Under the current relief package, the amount per person is $600 but the House recently passed measures to increase it to $2,000. It is now up to the Senate to decide whether the amount stays at $600 per person or increases to $2,000. Eligibility for the checks is determined by last year’s tax return. Single individuals who earned up to $75,000 will receive $600, and married couples who earned up to $150,00 will receive $1,200. Phaseouts for these checks will be the same as the last stimulus package, with the amount being reduced by $5 for every $100 of income above the income thresholds. Along with individuals and married couples, dependents under 17 years old will also receive a $600 stimulus check. Anyone over this age that is still claimed as a dependent such as a college student will not qualify.
Meals and Entertainment Expense
The COVID-19 Relief Bill also includes changes to the deduction rules for expensing business meals. Current tax law allows businesses to claim a tax deduction up to only 50% of the cost of business-related meals. Under the new changes, businesses will temporarily be able to deduct 100% of these expenses if the food and beverages are provided by a restaurant. This was implemented to encourage businesses to support the hard hit restaurant industry while getting a full tax deduction. This change from 50% to 100% will be in effect from January 1st, 2021 through December 31st, 2022.