COVID-19 TAX RELIEF

This is a general summary of our most frequently asked about tax relief efforts. Please contact us to discuss how these financial assistance may apply to your unique situation and/or for a more comprehensive list of the different financial assistance enacted.

FOR INDIVIDUALS



Stimulus Checks

Under the CARES Act, eligible individuals will be allowed an income tax credit for 2020 equal to the sum of:
  • $1,200 ($2,400 for joint return filers)
  • $500 for each qualifying child of the taxpayer
There is a limit and phase-out of this tax credit based on your income.
Find out how much you will receive by using the Stimulus Calculator created by the American Institute of CPAs.
Advance of the credit
IRS will be sending the rebates out immediately based on the 2019 filed tax return. If your 2019 tax return isn’t filed, the IRS will base the rebate amounts off the 2018 tax return. Eligible taxpayers don’t need to take any action and the rebate checks will be deposited directly if bank account information was included with the 2018 or 2019 tax return. If there isn’t any bank account information on file, the IRS will mail a check.

Reconciliation
The credit will be reconciled on the 2020 tax return filed in 2021. When filing the 2020 tax return, the credit calculated will be reduced (but not below zero) by the amount received in advance in 2020. If further credit is owed, it will be allowed on the 2020 tax return.

New York State Unemployment Insurance

If you currently lost your job through no fault of your own we recommend you apply for unemployment benefits as soon as possible. The CARES Act was enacted on Friday, March 27th, 2020. Please see the CARES Act Website for more information about how the CARES Act may affect Unemployment Insurance benefits. Any claim you file will be backdated to the date you became unemployed. If you are eligible, you will be paid for all benefits due. Click here for more information on qualifications and how to file a claim.

If you are self-employed, you may now file for Unemployment Insurance benefits online. See the Guidance for Self-Employed Individuals.

If you are filing a new Unemployment Insurance claim, the day you should apply is based on the first letter of your last name.

A - F file on Monday | G - N file on Tuesday | O - Z file on Wednesday
Missed your day? File on Thurs-Fri-Sat

Claims Center: (888) 209-8124

If you need to contact the department by phone we recommend to call as early as possible to minimize the wait time.

Extended telephone filing hours as follows:
Monday through Thursday, 8AM to 7:30PM
Friday, 8:00AM to 6:00PM
Saturday, 7:30AM to 8:00PM

Click here for other contact methods and telephone numbers.

New York State Student Loans

Employer Paid Student Loans
The CARES Act adds to the types of educational payments that are excluded from employee gross income “eligible student loan repayments” made before January 1, 2021. The payments are subject to the overall $5,250 per employee limit for all educational payments.

Eligible student loan repayments are payments by an employer, whether paid to the employee or directly to the lender, of principal and/or interest on any qualified higher education loans.

Federal Student Loan Payments Deferred
The CARES Act provides for the suspension of payments on Federal student loans through September 30, 2020.
Must contact loan provider to pause payment.

FOR SMALL BUSINESSES



Small Business Administration (SBA) Loan Programs

We recommend all our business and self-employed clients explore the Paycheck Protection Program (PPP) and the $10,000 advance from the Economic Injury Disaster Loan program (EIDL) as soon as possible (more details further below).

Banks are in various stages of reviewing SBA guidance and developing processes for loan applicants. In the meantime, businesses and self-employed individuals should be reaching out to their banker to let them know if you will be applying for a program and inquiring as to what information will be required. We believe the following documentation will be required:
  • Supporting documentation for the average monthly payroll calculation (2019/2020 Form W-2/W-3, 1099, 940, 941)
  • Corporate Documents (such as Articles of Incorporation, Bylaws, Operating Agreement, Articles of Organization, etc)
  • Review the sample Payroll Protection Program application for the various questions and supporting documentation that are needed
  • Confirm that your bank is an SBA Approved Bank
  • Calculate your average monthly payroll costs (there are particular rules regarding employee benefits, excess compensation over $100k, state and payroll taxes)
Jet Tax Service Inc can assist you with the payroll cost calculations and the entire loan application, please reach out to us for assistance.

Click here for the SBA COVID-19 Loan Resource website outlining all SBA programs available.

Paycheck Protection Program “PPP”

Lenders can approve applications beginning on April 3, 2020 for small businesses (April 10, 2020 for self-employed and independent contractors). We recommend all eligible business clients begin the application process as soon as possible.

This SBA program essentially provides a forgivable tax-free loan to small businesses to cover payroll, rent, utilities and interest for an 8 week period.

Eligible businesses (including self-employed individuals and contractors) may receive up to 2.5 months of monthly “payroll costs” in the form of a loan (a portion of which may be forgiven). Loans may be forgiven if the borrower maintains or restores payroll during the current economic crisis.

Note: Taxpayers aren’t eligible for a PPP loan if they claim the Employee Retention Credit.

Resources:



Economic Injury Disaster Loans “EIDL”

We recommend all eligible business clients (including rental real estate owners) apply for their $10,000 advance as soon as possible.

This existing SBA 7(b)(2) loan program has been expanded to provide an immediate $10,000 advance to businesses affected by COVID-19. This $10,000 advance does not need to be repaid (but will be taxable) for eligible businesses (even if the loan is denied). Funds should be advanced within 3 days of application.

Applying for an Economic Injury Disaster Loan does not make a borrower ineligible for a Paycheck Protection Loan. The $10,000 EIDL advance will reduce a corresponding amount of forgiven PPP loan.

Resources:

NYC Small Business Continuity Loan Fund

Businesses with fewer than 100 employees who have seen sales decreases of 25% or more will be eligible to apply for zero-interest loans of up to $75,000 to help ensure business continuity.

Businesses must:
  • Be located within the five boroughs of New York City
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
  • Employ 99 employees or fewer in total across all locations
  • Demonstrate the ability to repay the loan
  • Have no outstanding tax liens or legal judgments*
Click here for more information and to apply for this loan.

For more information on how NYC Small Business Service is helping the community during this time, please visit the site here.

Due Date Extentions

  • All Federal income tax returns due on April 15, 2020 have been postponed until July 15, 2020
  • The deadline for making IRA contributions has also been extended to July 15, 2020
Click here for Frequently Asked Questions regarding the change in due dates.
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