2021 was quite the whirlwind year for those in the tax prep business, as well as taxpayers themselves. Between last-minute, retroactive tax law legislations and sometimes lackluster guidance on how to apply these new rules, tax professionals were busy, to say the least. Here’s a look back at the top tax news stories of 2021 from the NATP blog.
Here’s to hoping the 2022 tax season is a little less chaotic for you and your clients!
Top five tax news stories of 2021
1. Eligible PPP expenses now deductible
The guidance most practitioners were waiting on has been released. The Consolidated Appropriations Act, 2021 (CAA, 2021), passed by Congress on Dec. 27, 2020, states that otherwise deductible expenses paid for by a recipient of a Paycheck Protection Program (PPP) loan continue to be deductible even if the PPP loan is forgiven in accordance with the statute. (Read more)
2. Key provisions of the Infrastructure Investment and Jobs Act
On Nov. 15, 2021, President Biden signed into law H.R. 3684, Infrastructure Investment and Jobs Act (IIJA). In general, this legislation authorizes funds for federal-aid highways, highway safety programs and transit programs, and for several other purposes, but it also contains key tax provisions. Here is a summary of what we know right now. (Read more)
3. Employee retention tax credit (ERC) updates for 202 and 2021 tax returns
Many changes have occurred in the past year regarding the employee retention credit (ERC). The ERC was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES) and stated eligible employers who paid qualified wages after March 12, 2020, and before Jan. 1, 2021, were eligible for a refundable credit equal to 50% of qualified wages paid (limited to $10,000 in wages per employee). (Read more)
4. NATP 2021 Software Survey results
No one ever said choosing the perfect tax preparation software was easy. You may have tried one package; you may have tried several. Over the years, you’ve learned that the must-have features for one preparer may not matter much to another.
We can all agree, however, that what’s important is having a software that satisfies both your business needs and your budget. Finding the balance is key, but for many small practice owners, the increasing cost of tax software is a major concern. (Read more)
5. Update on advance payment of child tax credit
The IRS is required by the American Rescue Plan Act to establish a program to help taxpayers with children by making periodic advance payments, July through December 2021, that equal, in total, 50% of the IRS’s estimate of the eligible taxpayer’s 2021 child tax credit (CTC).