March 19, 2020
In this ever-changing environment, all of us at LLI want to take a moment to reach out to you about our response to the COVID-19 Coronavirus. Be assured that we are doing everything we can to keep you informed of the daily updates as well as making ourselves available to all of you.
- FEDERAL (TAX) – Treasury Secretary Steve Mnuchin announced yesterday a series of tax relief measures to assist taxpayers during the coronavirus pandemic. He stated individuals and corporations can delay their tax payments for 90 days due to the coronavirus pandemic. During that time, the IRS will not charge interest or penalties. 1st quarter 2020 estimated tax payments will also be delayed 90 days however there is no mention about the 2nd quarter estimates that are due June 15, 2020.As of this writing, the IRS had not yet issued formal guidance on the policy. Mnuchin’s announcement did not delay the April 15 filing deadline, however, normal extensions are still available
- NEW JERSEY (TAX) – Proposed legislation: NJ A 3841 passed in NJ House and is now with the NJ Senate on 3/16. It automatically extends time to file (annual and quarterly) state gross income tax or corporation business tax returns (due on or before April 15) if the IRS and federal government extends filing or payment due date (or both) for federal returns.
Press release (3/16/20)A.B. 3841 that is now in the Senate, provides that, following a determination by the IRS to extend the filing or payment due date, or both, for federal taxpayers who are required to file a federal return on or before April 15, 2020, a taxpayer required to make and file an annual return or quarterly return pursuant to the “New Jersey Gross Income Tax Act,” or the “Corporation Business Tax Act”, on or before April 15, 2020, will automatically receive an extension to file those returns, which extension will coincide with the extended due date established by the IRS; provided, however, the extended due date will be no later than June 30, 2020.The NJ law states “The Director of the Division of Taxation may adopt the same terms and conditions specified by federal law or regulation for any such filing extension or payment due date. A taxpayer shall not be subject to penalties or interest if the return is filed by the end of the extension.” The presumption here is that NJ would also extend the payment date, but the bill only states, that they “may.”
- NEW YORK – Click the following link for details concerning the NY Job Protection and pay for New Yorkers Quarantined as a result of the Corona Virus. https://www.governor.ny.gov/news/governor-cuomo-announces-three-way-agreement-legislature-paid-sick-leave-bill-provide-immediate
- GRANTS – Facebook has announced a small business grant program. They are offering $100 million in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries. The program details an application are not yet available but you can sign up for updates here: https://www.facebook.com/business/grants
- LOANS – The SBA is offering loan programs to businesses affected by Coronavirus. However, NJ has not yet been an authorized participant. NY has only authorized Dutchess, Putnam and Westchester counties. You can apply and monitor when an area is eligible here: https://disasterloan.sba.gov/ela/
- Update on Federal Mandated Leave and Tax Credit
On March 18, President Donald Trump signed into law legislation that will require companies with fewer than 500 employees to provide new paid family leave and sick pay in response to COVID-19, and the new benefits will be funded through $105 billion in tax credits. The legislation does not include any other tax incentives, but lawmakers are expected to turn immediately to stimulus legislation where tax provisions will be considered.The new bill will have a significant and immediate impact on organizations with fewer than 500 employees. Affected businesses will need to quickly implement the new policies and separately track employee leave that falls under the specific categories in the legislation. The cost is fully funded by new refundable credits against payroll taxes, and an equivalent credit is also available for certain self-employed individuals.Below is a chart overview of the employer-paid leave requirements and tax credit provisions.
- COVID-19 Scenarios & Benefits Available in NJ – See chart below
- Update – New Jersey SALT deduction workaround for pass-through entities – The New Jersey Department of Treasury has not yet issued any guidance on the implantation of the PTE level tax. We will keep you informed as soon as the information becomes available.
- 2019 Retirement Plan Funding – If you have not yet funded your 2019 retirement plan contribution and you are not certain whether or not you should delay payment until the extension due date or not fund it at all, please reach out to us so we can help you make the right decision. We can walk you through the tax and cash flow implications based on your decision.
LLI Advisory Group provides this information as a service to clients and other friends for informational purposes only. It should not be construed or relied on as legal or tax advice.