6. IRS, "Deferral of Employment Tax Deposits
and Payments through December 31, 2020,"
updated November 27, 2020, accessed
January 2021, www.irs.gov/newsroom/
deferral-of-employment-tax-deposits-and-
payments-through-december-31-2020.
7. Society for Human Resource Management,
"Fiscal 2021 Omnibus and Covid-19 Relief,"
accessed January 2021, https://advocacy.shrm.
org/issue/fiscal-2021-omnibus-and-covid-19-
relief/?_ga=2.250935749.219299692.1609269655-
936848421.1609174529.
8. IRS, "Deferral of Employment Tax Deposits
and Payments through December 31, 2020."
9. IRS, "Notice 2020-32," accessed January 2021,
www.irs.gov/pub/irs-drop/n-20-32.pdf.
10. Society for Human Resource Management,
"Fiscal 2021 Omnibus and Covid-19 Relief."
11. IRS, "COVID-19-Related Employee Retention
Credits: Special Issues for Employers FAQs,"
updated December 3, 2020, accessed
January 2021, www.irs.gov/newsroom/covid-
19-related-employee-retention-credits-
special-issues-for-employers-faqs#special-
issues-employers-income-and-deduction.
12. Society for Human Resource Management,
"Fiscal 2021 Omnibus and Covid-19 Relief."
13. Society for Human Resource Management,
"Fiscal 2021 Omnibus and Covid-19 Relief."
14. IRS, "Special $300 Tax Deduction Helps Most
People Give to Charity This Year—Even If They
Don't Itemize," www.irs.gov/newsroom/special-
300-tax-deduction-helps-most-people-give-
to-charity-this-year-even-if-they-dont-itemize.
15. Society for Human Resource Management,
"Fiscal 2021 Omnibus and Covid-19 Relief."
16. IRS, "IRS Provides Tax Inflation Adjustments
for Tax Year 2020," updated December
17, 2020, accessed January 2021, www.irs.
gov/newsroom/irs-provides-tax-inflation-
adjustments-for-tax-year-2020.
Lisa Bakewell is a full-time freelance writer,
editor, perpetual learner, and lover of life in
Chicagoland. Her areas of writing expertise
span a multitude of topics that include health
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in health and dependent care flexible
savings accounts from 2020 to 2021 and
2021 to 2022. This change also allows
employees to make a 2021 midyear
change in contribution amounts.
13
ARE THERE ANY OTHER COVID†
RELATED TAX CHANGES?
Yes. Two that you may not be aware of are
deductions for charitable donations and
business meals. For charitable deductions,
taxpayers (who take the standard deduction)
can claim a cash donation of up to $300.
14
Also, the business meal deduction has
been increased to 100 percent (up from 50
percent) for food and beverage expenses
provided by a restaurant that are paid
or incurred in 2021 and 2022.
15
NOTES
1. IRS, "Economic Impact Payment Information
Center—Topic J: Reconciling on Your
2020 Tax Return," updated December
8, 2020, accessed January 2021, www.
irs.gov/newsroom/economic-impact-
payment-information-center-topic-j-
reconciling-on-your-2020-tax-return.
2. IRS, "Economic Impact Payment
Information Center—Topic J: Reconciling
on Your 2020 Tax Return."
3. IRS, "Recovery Rebate Credit," updated
November 27, 2020, accessed January 2021,
www.irs.gov/newsroom/recovery-rebate-credit.
4. IRS, "IRS: Unemployment Compensation is
Taxable; Have Tax Withheld Now and Avoid a
Tax-Time Surprise," last reviewed November
25, 2020, accessed January 2021, www.irs.gov/
newsroom/irs-unemployment-compensation-
is-taxable-have-tax-withheld-now-and-
avoid-a-tax-time-surprise#:~:text=By%20
law%2C%20unemployment%20
compensation%20is,2020%20federal%20
income%20tax%20return.
5. IRS, "Self-Employment Tax (Social Security
and Medicare Taxes)," accessed January 2021,
www.irs.gov/businesses/small-businesses-
self-employed/self-employment-tax-
social-security-and-medicare-taxes.
taxes. Neither the portion of the credit
that reduces the employer's applicable
employment taxes nor the refundable
portion of the credit is considered income.
11
As of December 21, 2020, the Fiscal
2021 Omnibus and COVID-19 Relief Bill
extended the Employee Retention Credit
through June 30, 2021, and the credit
rate was increased from 50 percent to 70
percent of qualified wages. It also expands
eligibility for the credit by reducing the
required year-over-year gross receipts
decline from 50 percent to 20 percent and
provides a safe harbor allowing employers
to use prior quarter gross receipts to
determine eligibility. The new bill also
allows businesses with PPP loans to qualify,
which was not allowed previously.
12
WHAT IF I USED MONEY FROM
MY RETIREMENT ACCOUNT
TO KEEP MYSELF AFLOAT?
If you took money out of your retirement
account in 2020 specifically due to COVID-
related issues, you were not charged the 10
percent penalty tax for early distributions
up to $100,000. The IRS also allowed
borrowing up to an additional $100,000
from 401(k) plans. According to the IRS,
these coronavirus-related withdrawals:
• May be included in taxable income
either over a three-year period
(one-third each year) or in the year
taken, at the individual's option
• Are not subject to the 10 percent
additional tax on early distributions
that would otherwise apply to most
withdrawals before age 59½
• Are not subject to mandatory
tax withholding
• May be repaid to an IRA or workplace
retirement plan within three years
WHAT ABOUT MY FLEXIBLE
SPENDING ACCOUNT?
The Fiscal 2021 Omnibus and COVID-19
Relief Bill, passed on December 21, 2020,
allows a rollover of unused amounts
L i s te n to T h e A B M P Po d c a s t a t a b m p.co m /p o d c a s t s o r w h e reve r yo u a cce s s yo u r favo r i te p o d c a s t s 67