Monthly Archives: April 2020
When construction resumes Friday in Philadelphia, no work will be allowed in units that are occupied, and all work will be limited to specific hours during the week, except for emergency repairs, Mayor Jim Kenney announced Wednesday.
Governor Phil Murphy said he will reopen state and county parks and golf courses, effective May 2, to bring New Jersey’s recreational policies in line with neighboring states.
The governor said he made the decision based on “data, science, fact,” and not because of protests from some residents and opposition from some lawmakers. New Jersey has seen consistent reductions in some key data, including hospitalizations, Murphy said. While infections and deaths from the new coronavirus continue to increase, they do so at a slower pace than a few weeks ago. The rate of people tested also is declining, he said.
Treasury and the Small Business Administration said Wednesday that they will temporarily shut out big banks from the electronic loan portal used to submit applications for the government’s small business relief program.
The move applies to any lender with more than $1 billion in assets for an eight-hour time period starting 4 p.m. today, according to an email obtained by CNBC.
Today, Governor Murphy announced a six-step process in his Road to Recovery plan. The stay-at-home Executive Order, which has been in effect since March 21st, will remain in effect in its entirety until further notice. The following six principles and key metrics will guide the process for lifting restrictions and restoring New Jersey’s economic health through public health:
- Demonstrate Sustained Reductions in New COVID-19 Cases and Hospitalizations.
- Expand Testing Capacity
- Implement Robust Contact Tracing
- Secure Safe Places and Resources for Isolation and Quarantine
- Execute a Responsible Economic Restart
- Ensure New Jersey’s Resiliency
The Governor emphasized that data and science will dictate actions and that a reopening will occur methodically, strategically, and responsibly.
The Federal small business loan program meant to offer a lifeline to companies that have seen their revenues dry up during the COVID-19 pandemic will resume accepting applications Monday morning, according to the agency that oversees the program.
Known as the Paycheck Protection Program, applications go live April 27, at 10:30 a.m., according to the U.S. Small Business Administration, after U.S President Donald Trump signed a federal aid bill pumping $310 billion more into the previously-depleted fund.
Governor Phil Murphy today signed Executive Order No. 128, allowing tenants to direct their landlords to use their security deposits to offset rent or back rent. The order will take effect immediately and will be in place until 60 days after the public health emergency is terminated.
Governor Murphy also announced that the Department of Community Affairs has established a rental housing information page and question portal as a single point of reference for tenants and landlords seeking information about their rights during the public health emergency.
President Donald Trump signed the latest $484 billion coronavirus relief bill into law Friday. It injects new money into aid for small businesses and hospitals, and puts funding toward Covid-19 testing.
The bill puts $370 billion into aid for small businesses trying to keep employees on payroll as they shutter to slow Covid-19′s spread. It grants $75 billion to hospitals struggling to cover costs during the crisis, and $25 billion for efforts to ramp up testing for the disease.
The Small Business Administration issued new guidance on Thursday that makes it “unlikely” that big publicly traded companies can access the next round of funding for the U.S. government’s small business relief program.
The update comes after a public furor that large companies tapped the facility, known as the Paycheck Protection Program, for hundreds of millions of dollars in loans while thousands of small businesses have yet to receive funding.
Senate Republicans and Democrats reached a deal Tuesday on a $484 billion coronavirus relief package for small businesses, hospitals and testing.
The Senate could vote on legislation as soon as 4 p.m. ET on Tuesday, and will need unanimous support to pass it. The House could approve the bill as early as Thursday.
Here is a list of useful websites to help you and your business navigate the COVID-19 regulatory landscape, including some of the most recent FAQs and Guidance that you should find helpful:
- Families First Federal Paid Sick Leave and EFMLA Guidance: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
- IRS FAQs on Documentation Requirements for Claiming Payroll Tax Credit for FFRCA and EFMLA leave:
- NJ Department of Labor Chart for State Leave Benefits:
- Pennsylvania Department of Labor Chart for State Leave Benefits:
- CDC Guidance for Businesses and Employers:
- EEOC FAQs on Pandemic Workplace Issues: https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm
- OSHA Guidance for Safe Workplaces:
- IRS Guidance on COVID-19 New Employer Tax Credits:
- NJ Executive Orders Issued by Governor Murphy:
Please let me know if you have questions or would like to set up a call to discuss any regulatory issues.
Megan Knowlton Balne
Hyland Levin Shapiro LLP
6000 Sagemore Drive, Suite 6301
Marlton, NJ 08053-3900
The state Legislature passed a bill Monday giving the governor power to suspend rent for three months for New Jersey’s small businesses hurt by the pandemic.
The bill was one of a dozen approved by both the state Senate and Assembly in remote sessions to help Garden State residents, businesses and health care providers cope with the growing public health and economic crises.
Let’s look at the key income tax provisions in the CARES Act. While a great deal of attention has been given to the availability of business loans under the Paycheck Protection Program, businesses can also take advantage of certain changes to the Internal Revenue Code (“IRC”) in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Here are beneficial provisions:
Bonus Depreciation of Qualified Improvement Property in CARES Act
Under the CARES Act, “Qualified Improvement Property” (“QIP”) is now classified as 15-year property that is eligible for bonus depreciation through 2022 and is subject to a 20-year life under the Alternative Depreciation System (ADS), effective for tax years beginning after December 31, 2017. Under Section 168 of the IRC, “QIP” includes any improvement to the interior portion of a nonresidential building placed in service after the building, other than (i) an enlargement of the building, (ii) any elevator or escalator, and (iii) any internal structural framework of the building. These changes effectively correct the Tax Cuts and Jobs Act of 2017 (“TCJA”), in which Congress inadvertently disqualified QIP placed in service after December 31, 2017 from 100% bonus depreciation.
Because these changes are retroactive, you may be able to amend your 2018 income tax returns or amend/adjust your 2019 returns (depending on whether those returns have been filed) to take advantage of the changes. Additionally, if these changes create a net operating loss (NOL) in 2018 or 2019, you may be able to take advantage of another provision in the CARES Act, described below.
Business Loss Provisions in CARES Act
The CARES Act allows taxpayers to carry back net operating losses (NOLs) arising in tax years ending after December 31, 2017 and before January 1, 2021 to the five (5) prior tax years. The Act also allows taxpayers to apply NOLs to offset 100% of the taxpayer’s income in tax years prior to January 1, 2021; previously, taxpayers were limited to applying NOLs to 80% of their taxable income. C corporations have the option to elect to file for an accelerated refund to claim the benefit of the carryback. Real Estate Investment Trusts (REITs) are excluded from the carryback provision, and NOL carrybacks cannot be used to offset income included under IRC Section 965(a). See IRC §172.
The CARES Act also removes the limitation on excess business losses for taxpayers other than corporations for tax years beginning after December 31, 2017 and before January 1, 2021. See IRC §461(l).
Business Interest Deductions
Under the TCJA, a taxpayer could deduct a portion of its business interest expense equal to business income plus 30% of adjusted taxable income (ATI) – essentially, taxable income without depreciation and certain other deductions. For tax years beginning in 2019 and 2020, the CARES Act increases the formula threshold to 50% of ATI. For partnerships, the increase to the ATI threshold is only applicable for tax years beginning in 2020. In calculating the deductible amount of business interest expense, taxpayers (including partnerships) may also elect to substitute 2019 ATI for 2020 ATI. See IRC 163(j).
Charitable Contribution Deductions in CARES Act
The CARES Act increases the limitation on charitable contributions for corporations from 10% of taxable income to 25% of taxable income, and the limitation on contribution to food inventory is increased from 15% to 20%. See IRC §170.
In addition, for individuals who itemize their deductions, the CARES Act suspends the percentage limitation on the deduction for qualifying charitable contributions for the 2020 tax year. This means that taxpayers who itemize may effectively deduct qualifying charitable contributions up to an amount equal to their adjusted gross income. Previously, the deduction for qualifying charitable contributions was limited to 60% of an individual taxpayer’s adjusted gross income. See IRC §62.
This e-alert is provided by Hyland Levin Shapiro LLP as a general summary of the topics discussed; it does not replace the need to consult with a legal or tax professional and is not intended to be a substitute for competent professional advice, including any advice regarding the effect of the CARES Act on your particular business. If you have any questions about the provisions summarized above, please contact Stephen M. Geria at firstname.lastname@example.org or 856.355.2920 or Harvey Shapiro at email@example.com or 856.355.2990.
To ensure compliance with U.S. Treasury Department Circular 230, which governs all practitioners before the Internal Revenue Service, we are required to inform you that any tax advice that may be contained in this communication is not intended or written to be used, nor can be used, by any recipient for the purpose of (i) avoiding penalties that might be imposed pursuant to the Internal Revenue Code or U.S. Treasury Regulations, or applicable state or local law or regulation; or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.