The CARES Act added the employee retention credit, a refundable payroll tax credit equal to 50% of qualified wages (wages, including qualified health plan expenses allocable to the wages) paid by eligible employers to certain employees from March 13, 2020, to Dec. 31, 2020. Qualified wages are limited with respect to any employee to $10,000 for all calendar quarters. While employers claim the employee retention credit against payroll taxes, meaning that, for income tax purposes, an employer’s deduction for wages paid in the tax year is reduced by the amount of the credit claimed, with all employees of a controlled group of corporations or other entities under common control treated as employed by a single employer. By the same token, employers cannot claim as qualified wages for purposes of the employee retention credit any wages for which they receive a credit for qualified sick or family leave credit for paid family and medical leave. Employers also may not claim the employee retention credit and the work opportunity credit for the same employee for the same period of time.
Back in in the days while attending NYC public elementary school, while covering America’s immigration through Ellis Island as part of our American History curriculum, our 5th grade teacher called on the class to share their ethnicity. As hands were raised she would call on my classmates who would say, “I’m Italian, Irish, German, etc”..whichever ethnicity their family identified with. Most of the grandparents or great grandparents of my classmates immigrated to America through Ellis Island between 1892 and 1924. To 5th graders back in 1963, 1892 was such a distant time. The previous day I had given my mom an update of our discussion of Ellis Island and she told me that none of our relatives had passed through Ellis Island as they were here before Ellis Island was officially opened. When I asked about my national heritage, Mom explained as best she could, that my roots included people from many countries including English, French, Scotland, Germany, Bohemia and others. In fact, she told me, that my bloodline included Cherokee Indians. However she told me that when they come to me, I should say that my nationality was, in fact, American.
NOBODY IS AMERICAN (or are they?)
So when the teacher asked me about my ethnicity, I told her that I was American, to which she rebutted, that “nobody is American” I remember then explaining that Mom explained that after more than 300 years of marriages within America, that marriages included people from many different countries, and that my first American ancestors were English settlers before the Revolutionary War and my most recent were from Bohemia/Austria and Germany. As I recall the teacher found this somewhat incredulous causing me to add that I was even part Cherokee; which was my biggest mistake, as we all know how cruel children at that age can be. From that moment to the end of the 6th grade, I was known as “Andrew-Red Face”, and being fair skinned and timid, I often blushed when embarrassed, only increasing the teasing and mockery by some of my classmates. Mom explained that many people just don’t understand what it means to be of colonial American heritage, and not to let them get to me.
It was then that I understood that my Mom’s father’s parents were descended from colonial Americans, who were forced to take sides twice, one during the American Revolution (1775-1781) and then with the American Civil War (1861-1865), both were brother fought against brother in a very literal sense. Both those wars tore at the very fabric of American families. During the Revolution, colonists whose families had settled from Jamestown to Boston between 1607 to 1775, were forced to choose sides between the English and the Revolutionary Patriots, often taking up arms against each other. To the English, Patriots were traitors, and to Patriots, family members and friends who chose to remain loyal to King George III where the enemy (somehow this all sounds familiar with today’s post 2020 election America). In the early days of the Revolution, most southern colonists depended on England to purchase their tobacco and cotton crop, and therefore remained Loyal to the Crown, as did many from the northern colonies who just didn’t care about the King’s censorship of colonists or the King’s attitude toward the American colonists ,who he felt should share in the burden of paying for the 7 Year War and the British Army that were stationed in America to defend the colonists; which was contrary to the Colonist’s self rule under King George II.
Only 80 years later, the fabric of the United States was threatened by the events that led to, and included, the American Civil War, where once again, brother fought against brother. Fortunately it was turning point for the evolution of civil rights in America.
Although I cannot explain why, there is pride and gratitude in knowing that one’s ancestors were part of and played a role to a greater or lesser extent to ensuring that the Great Experiment called The United States of America, still existed, affording one of opportunities that were not, and are not, available in other countries. Among these opportunities include the chances to make mistakes, and to learn from them, and hopefully correct them.
So what do you call Americans whose ancestors stretched back over hundreds of years going back to British colonial immigrants through modern day…I choose to refer to them only as Americans.
To be continued…………………
The Social Security annual wage base for 2021 is $142,800, a $5,100 hike. The Social Security tax rate on employers and employees stays pat at 6.2%. Both will continue to pay the 1.45% Medicare tax on all compensation, with no cap. Individuals also pay the 0.9% Medicare surtax on wages and self-employment income over $200,000 for singles and $250,000 for couples. The surtax doesn’t hit employers.
The 2021 standard milage rate for business driving falls to 56¢ a mile. The milage allowance for medical travel and military moves drops to 16¢ a mile in 2021. The charitable driving rate stays put at 14¢ a mile. It’s fixed by law.
Businesses get a nice surprise. They can deduct 100% of business meals in 2021 and 2022, as Congress decided to suspend the 50% haircut for two years to encourage more restaurant dining. This includes client meals as well as meals for employees on business travel. Note that this easing does not apply to 2020.
A key dollar threshold on the 20% deduction for pass-through income rises in 2021. Self-employeds and owners of LLCs, S corporations and other pass-throughs can deduct 20% of their qualified business income, subject to limitations for individuals with taxable incomes of more than $329,800 for joint filers and $164,900 for singles.
$1,050,000 of assets can be expensed in 2021, and this amount phases out dollar for dollar once more than $2,620,000 of assets are put into service during 2021.
U.S. taxpayers working abroad have a larger income exclusion…$108,700.