Dependent College Students Won t Get a Second Stimulus Check
For both the first round of payments authorized by the CARES Act in March and the second round of stimulus checks included in the COVID-Related Tax Relief Act, anyone who could be claimed as a dependent on someone else s 2019 tax return (regardless of whether they re
actually claimed as a dependent) isn t eligible for the cash.
Unfortunately, that hits most college students hard. College students who were 23 or younger at the end of 2019 and who didn t pay at least half of their own expenses that year could be claimed as a dependent on their parents 2019 tax return. So, those students are out of luck when it comes to stimulus checks.
(as of December 22, 2020)
On December 21, 2020, the U.S. Senate and the U.S. House of Representatives passed the
Consolidated Appropriations Act of 2021, which includes the
COVID-Related Tax Relief Act of 2020 (“
COVIDTRA”). The President is expected to sign the bill into law.
COVIDTRA updates and clarifies certain provisions in the
Coronavirus Aid, Relief, and Economic Security Act, passed in March 2020, as amended (“
CARES Act”), including the CARES Act’s
Paycheck Protection Program (“
Under COVIDTRA, new PPP loans (“
PPP2 Loans”) will be available to both first-time qualified borrowers and to businesses that previously received a PPP Loan.
1. Are the terms of a PPP2 Loan Similar to a PPP Loan?
(As of December 22, 2020)
Congress passed the $900 Billion
COVID-Related Tax Relief Act of 2020 (“COVIDTRA” or “the Act”) as part of the
Consolidated Appropriations Act of 2021, on December 21, 2020. As of this writing, President Donald J. Trump has not yet signed the Act into law. COVIDTRA extends and modifies several provisions first enacted in the
Coronavirus Aid, Relief, and Economic Security Act, as amended (“CARES Act”), Congress’ $2.2 trillion pandemic relief act that was passed in March 2020.
Below is a summary of certain provisions of COVIDTRA. Note that the portions of the Act concerning renewed funding for the P
aycheck Protection Program (PPP), including the availability of second-time loans to certain businesses, is addressed in our separate blog,
here, tax practitioners were concerned that, because forgiveness of a PPP loan does not cause the borrower to recognize cancellation of indebtedness income, if a taxpayer paid otherwise deductible expenses using the proceeds of a PPP loan that is forgiven, those expenses would not be deductible for federal income tax purposes because the Internal Revenue Code and Treasury regulations provide that no deduction is allowed to the extent the amount is allocable to tax-exempt income. The IRS confirmed these fears by announcing that expenses paid with the proceeds of a PPP loan that is forgiven, or with the proceeds of a PPP loan that the borrower reasonably expects to be forgiven, are not deductible.
How Your Second Stimulus Check Will Differ from the First One
By Rocky Mengle of Kiplinger |
A second stimulus check will be a blessing for people who are struggling financially because of the coronavirus pandemic. Thankfully, lawmakers finally passed another economic stimulus bill (the COVID-Related Tax Relief Act of 2020), which authorizes a second round of direct payments to many Americans.
However, while your second stimulus check will look a lot like the earlier stimulus payment you received under the CARES Act, there are several important differences. The amount, for one, probably won t be the same. Eligibility for a second stimulus check is different, too. So that you re not caught off guard,