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.

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.

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.

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.

According to the Taxpayer Bill of Rights. They are fundamental rights taxpayers have when dealing with the IRS. One of which is the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

This means your are entitled to:

• File for a refund if the they believe they overpaid.
• Write or call the IRS office that sent the taxpayer a notice or bill. Taxpayers can do this if they believe the notice or bill is incorrect in any way. When challenging information in a bill or notice, taxpayers should be ready to provide copies of any records that may help correct the error. If the taxpayer is correct, the IRS will make the necessary adjustment to their account and send a corrected notice.
• Amend a tax return if they discover an error. They can also amend this return if there were mistakes in their filing status, income, deductions or credits.
• Request any amount owed be removed if it’s more than the correct amount due.
• Request the IRS remove any interest from their account if the IRS caused unreasonable errors or delays.
• Submit an offer in compromise, asking the agency to accept less than the full tax debt, if the taxpayer believes they don’t owe all or part of the debt.

By NJCPA：”On Jan. 13, Governor Murphy signed the Pass-Through Business Alternative Income Tax Act into law. This act allows pass-through businesses to pay income taxes at the entity level instead of the personal level. This helps business owners mitigate the negative impact of the federal SALT deduction cap. It’s estimated to save New Jersey business owners $200 to $400 million annually. And it won’t cost New Jersey a dime because it’s revenue neutral for the state.

Under the act, taxpayers who earn income from pass-through businesses and pay the pass-through business alternative income tax can obtain a refundable gross income tax credit. There is no limit on the deduction of state taxes paid at the entity level under the federal Tax Cuts and Jobs Act (TCJA), only at the individual income level. Currently, pass-through business owners can only deduct up to $10,000 in state and local taxes on their personal income taxes.

Alan D. Sobel, CPA, CGMA, managing member at Livingston-based SobelCo and president-elect of the NJCPA, developed the concept for the bill right after passage of the TCJA. He played the lead role in  writing the legislation and making it fit within New Jersey’s tax structure.

The act took effect Jan. 1, 2020.“

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