Employers can grant paid leave for COVID-19

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

Under the Families First Coronavirus Response Act, employers can grant paid leave for an employee to take care of their health needs related to COVID -19 or to care for their family members. This relief helps ensure employees are not forced to choose between being paid or staying home to care for themselves, a child or other family member.

In addition to the relief for employees, businesses can claim two new refundable payroll tax credits for granting paid leave to their employees. The paid sick leave credit and paid family leave credit are available for eligible employers who pay qualified sick leave wages and/or qualified family leave wages from April 1, 2020 through December 31, 2020, and who have fewer than 500 employees.

The paid sick leave credit and the paid family leave credit will immediately and fully reimburse employers for the cost of providing COVID-19 related leave to their employees.

Here is what employees need to know about paid leave under the CARES Act.

Paid sick leave for workers
An employer can allow  a full-time employee up to 80 hours of paid sick leave.  A part-time employee may be allowed paid sick leave for the number of hours the employee works over a two-week period, if the employee is unable to work or telework because they are:

  • Subject to federal, state, or local quarantine or isolation orders related to COVID-19
  • Advised by a health care provider to self-quarantine due to COVID-19
  • Experiencing COVID-19 symptoms and are seeking a medical diagnosis
  • Caring for a person subject to federal, state, or local quarantine orders related to COVID-19 or has been advised to self-quarantine
  • Caring for a child whose school or place of care is closed or care provider is unavailable for reasons related to COVID-19
  • Experiencing any other substantially similar condition

Employers pay the benefits at 100% of employee’s regular pay up to $511 per day and $5,110 in total for the care of employee’s own health.

For the care of an employee’s family members, employers pay benefits at two-thirds of the employee’s regular pay up to $200 per day and $2,000 total.

Paid family leave to care for child
An employer can give up to 10 weeks of paid family leave at two-thirds their regular pay for up to $200 per day and $10,000 total if the employee is unable to work or telework because they’re caring for a child whose:

  • School or place of care is closed due to COVID-19
  • Childcare provider is unavailable due to COVID-19

With two weeks of paid sick leave and 10 weeks of paid family leave combined, an employee could receive up to a total of 12 weeks up to $12,000 of paid leave to care for a child.

Small Business Relief Programs

As businesses across the U.S. and around the globe are being impacted by the economic turmoil caused by the spread of coronavirus (COVID-19), the U.S. federal, state and local governments have introduced numerous relief programs to provide financial assistance. As a trusted strategic adviser, CINDIE  is committed to sharing relevant information with our clients and industry colleagues during this unprecedented time.

$2.2 Trillion Coronavirus Stimulus Bill

On March 25th, the Senate unanimously passed a historic $2.2 trillion stimulus package to combat the economic fallout from the coronavirus pandemic. This stimulus bill is by far the largest ever proposed and meant to provide direct financial aid to individuals, hospitals, local and state governments, and businesses.

There are two parts of the stimulus bill that are particularly relevant to businesses:

  1. The expansion of unemployment insurance from three to four months, as well as provision of temporary unemployment compensation.
  2. The establishment of a $500 billion lending fund for businesses, cities and states.

As part of the $500 billion lending program, the U.S. Department of the Treasury is offering loans, loan guarantees, and other investments to businesses, states and municipalities. The terms include restrictions on businesses that are eligible to receive loans, and the loans cannot exceed five years. Eligibility is based on the economic impact each business experienced.

SBA Economic Injury Disaster Loan Program

As part of its disaster assistance program, the U.S. Small Business Administration (SBA) is providing targeted, low-interest loans of up to $2 million to small businesses and non-profits impacted by the coronavirus. These loans may be used to cover payroll, accounts payable, fixed debts and other bills. The interest rate is 3.75% for small businesses and 2.75% for non-profits. Loan repayment terms vary by applicant, up to a maximum of 30 years. For more information and to apply online, please click here.

State and Local Coronavirus Small Business Assistance

States and municipalities are offering a number of relief programs and adding new resources daily. For example, New York City announced a Small Business Continuity Loan Fund, Employee Retention Grant Program and COVID-19 Response and Impact Fund. San Francisco launched a COVID-19 Small Business Resiliency Fund, and Los Angeles introduced a Small Business Micro Loan Program. Many other states and municipalities have announced similar programs. For up-to-date information on relief available in your area, please visit your governor’s website: https://www.nga.org/governors/addresses.

Eligibility

While these programs are generous, most require an assessment of economic impact on your business and the completion of an application process.

What CINDIE can do for you 

CINDIE can help by analyzing your organization’s financial status relating to assessing eligibility in support of the application of relevant grants and loans in connection with these programs. We can also assist with the grant or loan administration process, including preparing and organizing pertinent forms and supporting documents. Please contact cpa@cindiellc.com for details.

Coronavirus New York Mitigation

On March 23, 2020, Senate Bill S8125A was introduced to the New York State Senate. This Bill is designed to provide rent relief for tenants in certain circumstances and mortgage relief for those landlords that lose out on rent payment as the result of said rent relief afforded to tenants.
To summarize, the Bill proposes to “suspend all rent payments for certain residential tenants and small business commercial tenants if such tenant has lost employment or was forced to close their place of business and certain mortgage payments for landlords of such tenants in the state for 90 days following the effective date of this act in response to the outbreak of coronavirus disease 2019 (COVID-19).” This does not mean tenants have deferred rent. It means tenants are forgiven on all rent and not required to pay the waived rent owed during this time period, ever.
Furthermore, the Bill proposes that “any person or entity that faces a financial hardship as a result of being deprived rent payments for a covered property pursuant to this section shall receive forgiveness on any mortgage payments for such covered property” during the 90-day period. Therefore, if a landlord does not receive their owed rent payment due to this Bill, and cannot make their mortgage payment as a result, the landlord will be forgiven for such payments.

Status of Tax Relief and Filing Extensions related to CoronaVirus (COVID-19)

Federal Highlights:

 

  • Tax returns are STILL due on April 15, 2020
  • If there is a balance due with the 2019 income tax return, that amount DOES NOT have to be paid UNTIL July 15, 2020.
  • Penalties and interest charges that would normally be assessed WILL be waived
  • The 2020 Estimated Tax Payment that would normally be due on April 15 is now due on July 15.
  • There is NO guidance with regard to those taxpayers who have already filed their 2019 tax returns and set up automatic payments for April 15
  • There is NO guidance with regard to payroll taxes

税表还是2020年4月15日到期。 付税在2020年7月15日之前支付该金额, 通常将免除的罚款和利息费用。 通常应在4月15日到期的2020年预付税款,现在应在7月15日到期。没有关于工资税的指导)

Treasury Secretary Mnuchin announced on March 17 a series of tax relief measures designed to assist taxpayers and tax preparers during the coronavirus pandemic. During the press conference, he announced that individuals and corporations can delay their tax payments for 90 days from the April 15 deadline: Individuals can defer up to $1 million in payments and corporations can defer up to $10 million in payments. During that time, the IRS will not charge interest or penalties. Mnuchin’s announcement did not delay the April 15 filing deadline. The IRS has not yet issued formal guidance on the policy. The AICPA is working to confirm the specifics of these actions with the Department of Treasury and IRS. We will provide updates as soon as possible. We recommend holding off on taking any action or notifying clients until official guidance comes out.


New Jersey
There is no definitive word yet on tax relief or extensions in New Jersey. Often, New Jersey follows federal guidelines. On March 16, the New Jersey Assembly passed a package of bills to address the fallout from the coronavirus (covid-19) outbreak, including A-3841, which would extend the time to file gross income tax or corporation business tax return by one month. The bills still have to be passed by the Senate and signed by Governor Murphy.

New Jersey Department of Revenue and Enterprise Services Announces a Limited Time Streamlined Business Reinstatement and Dissolution Program

New Jersey Department of Revenue and Enterprise Services Announces a Limited Time Streamlined Business Reinstatement and Dissolution Program

On December 10, 2019, the New Jersey Division of Revenue and Enterprise Services announced a Streamlined Business Reinstatement and Dissolution Program that will run from March 1, 2020 through June 15, 2020 to assist companies that have not complied with the Division’s annual reporting requirements and are in revoked status with the State of New Jersey.   Through an on-line self-service procedure being established by the Division, a company will be able to come into compliance and reinstate or dissolve without a requirement to obtain tax clearance, for a flat $500 fee plus a convenience or credit card fee, so long as the company attests that the company has paid all known New Jersey state tax obligations. Further details regarding this program can be found at https://www.state.nj.us/treasury/revenue/pdf/RevNotice-121019.pdf.

CINDIE can help you!

183 Days Rule

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

Example:

You were physically present in the U.S. on 120 days in each of the years 2012, 2013, and 2014. To determine if you meet the substantial presence test for 2014, count the full 120 days of presence in 2014, 40 days in 2013 (1/3 of 120), and 20 days in 2012 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2014.

File 2019 Tax for Fee at IRS Site

Many can file both their state and federal tax returns for free in 2020

As you get ready to file their federal tax returns, most will also be thinking about preparing their state taxes. There’s some good news for filers wanting to save money. Eligible one can file their federal and state taxes at no cost. If your adjusted gross income was $69,000 or less last year, you can file their 2019 federal taxes for free this year using IRS Free File. Many of them can also do their state taxes at no charge.