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COVID-19 relief: How to apply changes to returns in ProSeries

by Intuit• Updated 10 months ago

This article will help you:

Navigate the new forms and calculations on tax year 2021 and 2020 returns due to the CARES Act and other pandemic relief and stimulus legislation.
Understand what applying the CARES Act provisions changes on your 2019 tax returns.
Find clients' 2019 returns that you previously filed who may benefit from amending their return to apply the relief provisions.

New for tax year 2022:

Form 8915-F is used for all retirement disaster distributions and repayments occurring in 2021 and later.

For tax year 2021 returns:

Per treasury guidance (Notice 2021-25 ), beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants.
Corporations can deduct qualified relief contributions paid between Jan. 1, 2020 and Feb. 25, 2021, up to 100% of their income. Learn more here.
Corporations can deduct certain donations for major disasters paid between Jan. 1, 2020 and Feb. 25, 2021, up to 100% of their income. Learn more here.

Applying key CARES Act provisions to your 2020 returns

The following are the top articles about tax law changes from the CARES Act and the CAA of 2021:

For help deducting $300 of cash contributions when taking the standard deduction, see Entering charitable contributions for the 1040.
How to enter stimulus payments and figure the Recovery Rebate Credit in ProSeries will help you report your clients' economic impact payments and claim the Recovery Rebate Credit.
Generating Form 8915 in ProSeries will show you how to enter a 2020 Coronavirus-Related Retirement Distribution and complete the 8915-F for ProSeries.
For clients who received relief through the Paycheck Protection Program, see How to enter PPP loans and EIDL grants in ProSeries.
Generating Form 7202 in ProSeries will show you how to complete Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals for tax year 2020 and 2021.
Where do I enter the Employee Retention Credit in ProSeries? will help you make adjustments to the tax return if the Employee Retention Credit was taken on the 941 or 944.
Common questions on Schedule SE Self-Employment tax in ProSeries will help you elect to defer self-employment tax payments.
For businesses who normally deduct the expense of meals, meals provided by a restaurant are 100% deductible through Jan. 1, 2021 to Dec. 31, 2022. All other meals are still limited to 50%.

How do I apply the CARES Act calculations to a tax year 2019 return?

Open the return to the Information Worksheet.
In Part I, locate the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act section.
Check the Yes box.

You’ll need to check this box for every tax return you file going forward to make sure the return is accurate and using the latest tax laws. This feature allows you to only apply the CARES Act provisions to returns you file after the law’s passage and prevents calculations from changing on returns you previously filed until your ready to review the changes.

How do I identify business clients affected by the tax year 2019 CARES Act in ProSeries Professional?

You can now use the Client Analyzer Query to identify returns that may need to be amended due to the CARES Act. This tool can search through all of your clients — even those with locked returns — to check whether they’re affected by:

Net operating loss changes (Individual and Corporate modules),
Excess business loss changes on Form 461,
Prior year minimum tax credit changes on Form 8827,
Business interest expense limitation changes on Form 8990, or
Depreciation of qualified improvement property changes.

Follow these steps to run the Client Analyzer Query:

Open ProSeries to the HomeBase.
From the HomeBase View dropdown menu, choose Client Analyzer Queries.
In step 1) Select Return Type, choose your business entity:
- 1120 Corporation
- 1120S S-Corporation
- 1065 Partnership
- 1041 Trust
In step 2) Select Query, choose either of the new queries:
- Clients impacted by CARES Act Bus Interest Exp changes
- Clients impacted by CARES Act Qual Improv Prop Changes
Click GO.

How does the CARES act apply to the 2019 ProSeries Fixed Asset Manager?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, retroactively made all qualified improvement property 15-year property that is eligible for special depreciation allowance.

Follow these steps to apply this to your assets in Fixed Asset Manager:

Open the qualified improvement property asset.
Change the Recovery Period (YY/MM) field from 39/00 to 15/00.
Scroll down to Qualified for Special Depr Allowance and check the applicable box.

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