Bookmark this page for the latest updates and resources on the pandemic recovery and your family and business.
S Corporations and PPP Loan Forgiveness
Attaining S corporation status has certain tax advantages. S corporations are treated as passthrough entities for tax purposes and the protection of shareholder assets. However, the relief acts passed in response to the COVID-19 pandemic revealed some potential problems with how income passed to individual shareholders is taxed. Two of the most relevant issues are discussed in this article.
Read more: S Corps and PPP
2021 Child Tax Credit Advanced Payments
More money is coming to more families — and soon. That’s the main takeaway of the changes implemented to the Child Tax Credit (CTC) this year. This article shares the details of the changes.
Read more: Child Tax Credit Payments
Tax Credit for Vaccination Paid Time Off
Employers that provide full pay for employees who take time off to get and recover from a COVID-19 vaccination are eligible for a paid-leave tax credit.
The tax credit is available to organizations with fewer than 500 employees and covers up to $511 per day for each vaccinated employee.
Read more: Vaccination tax credit
NJ Small Business Relief Grants UPDATE
New guidance further specifies which small businesses qualify for grants. Interested business owners must also pre-register to access the application. Pre-registration begins on April 19 at 9am. The application itself will be available through a phased approach.
Read more: Relief Grant Update
NJ Small Business Relief Grants
Governor Murphy recently signed two bills establishing more grant funds for small businesses in New Jersey. The first program puts $25 million towards grants for microbusinesses, meaning companies with five or fewer employees. The second program authorizes $15 million in grants to small businesses and nonprofits.
Read more: NJ Small Business Grants
American Rescue Plan Act Increases Dependent Care FSA Contributions
The American Rescue Plan Act (ARPA) raises pretax contribution limits for dependent care flexible spending accounts (DC-FSA) for the 2021 calendar year. A dependent care FSA is a pretax benefit account used to pay for services such as day care, preschool, summer camps, and before or after-school programs.
Read more: DCFSAs
PPP Application Deadline Extended to May 31
The PPP Extension Act of 2021 passed in the U.S. Senate yesterday and is expected to be signed into law by President Biden. The bill extends the Paycheck Protection Program (PPP) application deadline from March 31, 2021 to May 31, 2021. The bill will also provide the Small Business Administration (SBA) with an additional 30 days to process pending applications. It does not provide any additional funding for the current round of the PPP.
Read more: PPP deadline
CA Employers Must Provide Paid Leave for COVID-19
California employers must provide employees with up to 80 hours of COVID-19 supplemental paid sick leave for eligible employees, including those advised to quarantine or isolate and those caring for COVID-impacted family members, or employees receiving the COVID-19 vaccination.
Read more: CA sick pay
American Rescue Plan Act Extends Employer Tax Credits, Doesn’t Require Leave
The American Rescue Plan Act (ARPA) does not require Families First Coronavirus Response Act (FFCRA) paid and emergency family leave, but does extend and expand the tax credits for employers. ARPA extends these tax credits through September 30, 2021.
Read more: ARPA
NJ and NY Tax Deadline Extended
New Jersey and New York have extended the filing deadline to May 17, 2021, following the IRS.
Only a small number of states have not extended their filing deadline. First quarter estimated taxes are still due on April 15th.
Read more: Filing extension
NY Employers Must Provide Paid Leave for COVID-19 Vaccination
New York State employers must provide employees with up to four hours of paid time off per COVID-19 vaccination. The law takes effect immediately and ends on December 31, 2022.
Read more: COVID leave
Federal Tax Deadline Extended
The IRS has extended the federal filing deadline to May 17, 2021.
New Jersey and New York have not extended their deadlines at the time of publication.
American Rescue Plan Act
President Joe Biden signed into law the latest round of COVID-19-related legislation. The American Rescue Plan Act is intended to provide additional relief to workers and employers through tax credits, expanded federal unemployment benefits, and additional small-business aid.
Read more: COVID relief 2021
PPP Update for Schedule C Borrowers
The U.S. Small Business Administration (SBA) issued new Paycheck Protection Program (PPP) rules that allow self-employed individuals who file Form 1040, Schedule C, Profit or Loss From Business, to calculate their maximum loan amount using gross income instead of net profit.
Read more: Schedule C borrowers
PPP Loans Tax Exempt and Expenses Deductible for New Jersey
Any business expenses paid using proceeds from PPP loans will remain deductible for the 2020 tax year.
Read more: PPP loans tax exempt
NJEDA Small Business Emergency Assistance Loan Program Phase 2 Opens February 10
The New Jersey Economic Development Authority (NJEDA) will open pre-registration for Phase 2 of the Small Business Emergency Assistance Loan Program on Wednesday, February 10, at 9 am. The $10 million program expansion will support New Jersey small businesses and nonprofits impacted by the COVID-19 pandemic. Read more: Phase 2
PPP Second Draw Borrower Application Form
The Paycheck Protection Program Second Draw application can be found by clicking this PPP link.
Important Changes to the Employee Retention Credit
The Consolidated Appropriations Act, 2021 (CAA) clarifies and expands the Employee Retention Credit (ERC) that was created by the CARES Act. If your business did not previously claim this credit due to eligibility, it may now qualify. Also, if you have previously claimed this credit, you may now be eligible for an enhanced benefit.
Read more: CAA and ERC
New PPP Guidance Issued by SBA
The U.S. Small Business Administration (SBA) and Treasury issued guidance late Wednesday night for the reconstituted Paycheck Protection Program (PPP).
Read more: New SBA Guidance
Congress Passes Long-Awaited Relief Bill
$900 billion package includes critical funding and policy changes to help small businesses and nonprofits recover from the pandemic. Trump signature expected shortly.
Read more: Relief Bill
Lance Aligo Discusses PPP Loan Forgiveness on Popular Regional Business Podcast
Tune in and listen to KRS manager Lance Aligo, CPA, on the Strategies & Ideas for Business podcast as he discusses where things stand now with Paycheck Protection Plan loan forgiveness.
Read more: PPP loan forgiveness
Paycheck Protection Program Second Round? What We Know Now
There has been a lot of media coverage regarding additional stimulus packages and a second round of Paycheck Protection Program funding (PPP2). No legislation has been enacted and no applications can be submitted, at time of release of this article.
Here’s what we do know: PPP2
Paycheck Protection Program Loan Forgiveness Application
PPP Loan Forgiveness Application form plus instructions for borrowers can be downloaded here.
KRS Insights Webinar: COVID-19 Relief and Payroll Protection Program Updates
Join our Tuesday, December 1, 2020, 11:00 AM webinar and find out what’s going on with the PPP program.
Open to all business owners who have PPP loans.
Read more and register: PPP webinar
Reminder: No RMDS This Year
The CARES Act includes a provision to waive Required Minimum Distributions (RMDs) during 2020 for individual retirement accounts (IRAs) and retirement plans, including for beneficiaries with inherited accounts.
Read more: RMDs waived
Governor Murphy Signs COVID-19 Workplace Safety Executive Order
Governor Phil Murphy signed Executive Order No. 192, which mandates workplace health and safety standards during the COVID-19 pandemic. The executive order, which goes into effect on November 5th at 6am, will require all New Jersey employers in both the private and public sector (including non-profits and governmental/educational entities) to follow all health and safety protocols outlined in the executive order.
Read more: COVID workplace safety
Employer Voting Requirements in NJ and NY
Although some employees may choose to vote by mail during the COVID-19 pandemic, others will want to cast their ballots in person. They may have the right to take time off from work to do so depending on state law.
Read more: Employer Voting Requirements
SBA Releases New PPP Loan Forgiveness Form for Loans $50K or Less
The U.S. Small Business Administration has released SBA Form 3508S, a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. The new form allows borrowers to self-certify they used the money appropriately and receive complete forgiveness.
Read more: PPP loan forgiveness
Disaster Relief Payments: A Simple Way To Help Employees
When the COVID-19 pandemic was declared a national emergency earlier this year, it triggered Section 139 of the Internal Revenue Code. Under Section 139, employers can provide tax-free payments or reimbursements to employees for certain expenses associated with a qualified disaster — such as the COVID-19 crisis.
Read more: Section 139
IRS Updates Form 941 To Reflect COVID-19 Tax Credits
The IRS has revised Form 941, Employer’s Quarterly Federal Tax Return, to accommodate COVID-19-related employment tax credits granted under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES). This article explains which tax credits are allowed under FFCRA and CARES, the changes made to Form 941, and how to use it to claim credits.
Read more: Form 941
Tax Scams: The Pandemic Edition
The IRS has published its annual list of “dirty dozen” tax scams.
They publish this list every year, but 2020 is special, as the scammers have managed to turn the pandemic to their advantage.
Read more: Dirty Dozen
CARES Act Provisions Affecting Employee Benefit Plans
Employee benefit plans are impacted by the CARES Act. Here’s what you need to know about coronavirus-related plan distributions and which of your employees may qualify for them.
Read more: CARES Act Provisions
Partial Termination of an Employee Benefit Plan
Staff reductions during the coronavirus pandemic will affect your company’s employee benefit plan differently depending on whether you as the employer choose to layoff or furlough employees. This post discusses factors you need to take into account.
Read more: Employee Benefit Plans
Updated Coronavirus-Related Child Care Leave Guidance
How Workers Can Return
With the pandemic being a national emergency that involves an infectious disease, you must take precautions when recalling your employees to the work site.
This article offers four suggestions to utilize in your return-to-the-office plans, including ideas for establishing workplace safety protocols. Read more: Returning to the office safely
IRS Guidance on Payroll Tax Deferment Presidential Order
According to IRS Notice 2020-65, the employee Social Security tax deferral may apply to payments of taxable wages to an employee that are less than $4,000 during a bi-weekly pay period, with each pay period considered separately. No deferral is available for any payment to an employee of taxable wages of $4,000 or above for a bi-weekly pay period.
Our CPAs do not recommend utilizing this tax deferral at this time. Read more: Social Security Deferment
CARES Act Suspension of Required Minimum Distributions
The CARES Act temporarily suspended retirement plan required minimum distributions (RMDs). If you already withdrew the required amount, you have until this Monday, August 31, to return the funds to the original account from which they were withdrawn.
Returning the funds will reduce your taxable income for 2020 and may allow for tax planning opportunities such as ROTH conversions. Read more: RMDs
Small Business Lease-Emergency Assistance Grant Program Opens Monday
Small businesses in a few dozen New Jersey towns can apply to receive up to $10,000 in federal funding to help pay their rent under the new Small Business Lease-Emergency Assistance Grant Program.
Read more: Lease Assistance
Senate passes bill to extend PPP Loan Application Deadline to August 8th
The Senate passed a five-week extension of the Paycheck Protection Program (PPP) yesterday only hours before the application deadline. The measure will have to pass in the House and be signed by President Trump before the new deadline of August 8th would take effect.
Read more: PPP extension
IRS Update on Required Minimum Distributions
The Coronavirus Aid, Relief, and Economic Security (CARES) Act enabled any taxpayer with required minimum distributions (RMD) due in 2020 from a retirement plan to forgo the RMD this year. This included 401(k), 403(b), and IRA plans.
Read more: IRS Update
SBA Issues Interim Final Rule on Owner Compensation
The Small Business Administration (SBA) has issued a new interim final rule for determining payroll costs and owner compensation in calculating Paycheck Protection Program (PPP) loan forgiveness under the new 24-week covered period.
Read more: Owner Compensation under PPP
SBA Releases EZ PPP Loan Forgiveness Application
The Small Business Administration (SBA) has released a three-page “EZ” Paycheck Protection Program loan forgiveness application.
This application is meant to reduce the burden on smaller businesses and borrowers by requiring fewer calculations and less documentation. Read more: EZ application
NJEDA Emergency Grant Program Phase 2 Opens June 9
Applications for the NJEDA’s Small Business Emergency Assistance Grant Program Phase 2 open on Tuesday June 9, 9 am. Phase 2, with $45 million available, offers larger grants (up to $10,000) and expanded eligibility to New Jersey’s small businesses, home-based businesses, sole proprietorships, and 501(c)(3), 501(c)(4), and 501(c)(7) nonprofit organizations.
Read more: Emergency Grants Phase 2
Paycheck Protection Flexibility Act Passes in Senate
The Senate passed the House’s version of the Paycheck Protection Flexibility Act. The bill now goes to President Donald Trump, who is expected to sign it.
Among the chief provisions: current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they may keep the original eight-week period. In addition, the payroll expenditure requirement has been reduced from 75 percent to 60 percent of the loan. Read more: Flexibility Act
Changes Coming to PPP
Both the House and Senate are working to make changes to the Paycheck Protection Program (PPP). Last night, the House passed the Paycheck Protection Program Flexibility Act. The act makes several key changes to the PPP, among them increasing the timeline to use funds from eight weeks to 24 weeks.
Read more: PPP Changes
More Guidance on PPP Loans and Forgiveness Released
The Treasury and U.S. Small Business Administration (SBA) issued additional guidance on the conditions for PPP loan forgiveness as well as loan review procedures, and borrower and lender responsibilities.
Read more: More PPP guidance
SBA Issues PPP Loan Forgiveness Instructions and Application
The U.S. Small Business Administration (SBA) released new guidance for Paycheck Protection Program (PPP) loan forgiveness. The instructions and application form are meant to help borrowers apply for forgiveness of their PPP loans and includes several measures to reduce compliance burdens and simplify the process for borrowers.
Read more: PPP loan forgiveness
SBA Deems PPP Loans under $2M Meet Good-Faith Certification
Borrowers applying for a Paycheck Protection Program (PPP) loan must certify in good faith that current economic uncertainty makes the loan necessary to continue business operations.
Any borrower that received PPP loans with an original principal amount of less than $2 million (along with its affiliates) will be deemed to have made the required good-faith certification. Read more
New Jersey Expands FLA with COVID-19 Protections
The new law provides employees forced to take time off to care for a family member during the COVID-19 outbreak with up to 12 weeks of unpaid family leave in a 24-month period without losing their jobs.
Read more: FLA and COVID-19
SBA Extends PPP Repayment to May 14
The SBA has extended the repayment deadline to May 14, 2020 for those subject to repayment. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
Read more: PPP repayment
PPP Loan Forgiveness Not Reduced By Rejected Rehire Offers
If an employer offers to rehire an employee and the offer is declined, it will not have a negative effect on the Full Time Equivalent (FTE) reduction calculation for PPP loan forgiveness.
Read more: PPP and rehire offers
Families First Coronavirus Response Act (FFCRA) Update
Among the latest updates to the FFCRA: After a grace period, the DOL has officially ramped up its enforcement efforts but encourages employers and employees use their educational online tools to avoid violations. Additional guidance provided for small business exemptions, self-quarantine, and a timeline for paid sick leave.
Read more: FFCRA updates
SBA Issues More Regulations for PPP
Read more: New PPP regs
New Guidance and Infusion to the PPP
The Paycheck Protection Program and Health Care Enhancement bill passed last week gave a $310 billion replenishment to the PPP after all funds were depleted after less than two weeks. The U.S. Small Business Administration (SBA) issued another round of regulations on the program shortly before it resumed accepting applications from participating lenders on Monday.
Read more: PPP Infusion
Economic Impact Payments Update
The government has begun to process Economic Impact Payments. The payments are automatic for most taxpayers. The IRS has created a portal that allows recipients to check payment status, confirm payment type (direct deposit or check), enter bank account information to receive direct deposit, and update a mailing address.
Read more: Stimulus payments
NJEDA Small Business Emergency Assistance Loan
The New Jersey Economic Development Authority (NJEDA) has created a Small Business Emergency Loan Program to assist with the continued economic impact of COVID-19. This $10 million program will provide working no-to-low interest capital loans of up to $100,000 to businesses with less than $5 million in revenues.
Read more: NJEDA loans for small businesses
Changes to Paycheck Protection Program
The U.S. Small Business Administration (SBA) has issued interim regulations under the Paycheck Protection Program (PPP). These regulations have changed some aspects of the program, including for independent contractors, includable and excludable expenses, loan forgiveness, and more.
Read more: SBA interim regulations for PPP
Applications Open Now for NJEDA’s Grant Program
The application process for the NJEDA’s Small Business Emergency Assistance Grant Program opened Friday, April 3, at 9am. The program includes seven initiatives to help businesses cope with the impact the coronavirus outbreak has had on the economy.
Paycheck Protection Program
The latest coronavirus relief fund established new loans to help employers pay workers and cover other employment-related expenses during the coronavirus crisis. Lenders can start processing loan applications for small businesses and sole proprietors on April 3, 2020 and independent contractors and self-employed workers on April 10, 2020.
Read more: SBA-managed payroll protection loans
DOL Guidance on Families First Coronavirus Response Act
The Department of Labor recently issued additional regulations and guidance regarding the Emergency Family and Medical Leave Expansion Act (EFMLEA) portion of the legislation.
This guidance covered small business exemptions, office closures, intermittent leave, furloughs or reduced hours, and documentation.
Read more: FFCRA guidance for employers
CARES Act – Benefits for Individuals
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a $2 trillion economic relief plan, which includes direct payments to many Americans, expanded unemployment benefits, and additional benefits for individuals and families during these difficult times.
Read more: CARES aid for individuals and families
CARES Act – Small Business Update
The newly enacted CARES Act provides for forgivable small business loans. This article shares details about loan amounts, loan forgiveness, and then shares additional resources where small business owners can go for additional guidance.
Read more: CARES provides small business relief
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a $2 trillion economic relief plan which includes direct payments to Americans, strengthened unemployment insurance, loans to businesses, and increased health-care resources. The CARES Act was signed into law by President Trump on Friday, March 27, 2020.
We’ve summarized the aspects of the bill we believe most affect our clients. There are additional benefits to specific industries and states along with special provisions.
Read more: CARES Act summary
FFCRA – Important Updates [Now Effective April 1]
The Department of Labor has determined that the effective date for the (FFCRA) will be April 1, 2020. The text of the FFCRA states that the act takes effect “not later than 15 days after the date of enactment.” In our previous communication on the FFCRA Update, we stated the effective date would be April 2, 2020. The DOL has made it clear that this is not the case and that the law will be effective April 1, 2020.
Read more: Families First Coronavirus Response Act
New Jersey Small Business Grants & Loans
The New Jersey Economic Development Authority approved a package of initiatives that can be worth an estimated $75 million to $100 million to help businesses cope with the impact the coronavirus outbreak has had on the economy. All business owners who are interested in these and other programs should get documentation in order and begin to apply as soon as possible.
Read more: Grants & Loans for Small Business
KRS Working Remotely During COVID-19 Crisis
KRS is committed to the safety and health of our staff and clients. To that end, we are following the recommendations of the Bergen County Executive and Governor Murphy by adopting a contingency plan to move our office to work remotely effective March 19th.
Our team will continue to give you the same service you have come to expect from us no matter where we work. Although you should continue to call our office and email our staff as you have in the past, there are some suggestions that will assist in these efforts.
Read more: KRS business continuity plans
Families First Coronavirus Response Act
The Families First Coronavirus Response Act (H.R. 6201), which was signed into law on March 18, 2020, provides paid emergency family leave and paid sick leave for people affected by COVID-19. These provisions take effect April 1, 2020 and expire on December 31, 2020. They will not be applied retroactively, according to the Department of Labor.
Business owners may be considering applying for unemployment benefits because of a temporary suspension of business operations due to COVID-19.
If you are an owner of a corporation, or you own more than a five percent equitable or debt interest in the corporation, you will not be considered unemployed during your term of ownership. Your claim will not be valid and you will not receive benefits.
Read more: Business owners and unemployment benefits
Small Business Loans & Grants
Relief available for small businesses impacted by pandemic shutdowns
Small businesses are currently eligible to apply for an Economic Injury Disaster Loan (EIDL) through the Small Business Association (SBA) due to Coronavirus (COVID-19).
These loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. SBA offers loans with long-term repayments to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. If a business has several entities, each entity should apply.
Read more: Current loans & grants offered
Fed, NJ & NY Officially Extend Tax Filing Deadline
The IRS has extended the federal filing deadline to July 15, 2020.
New Jersey and New York have also extended the filing deadline to July 15, 2020.
Read more: Extended tax deadlines
Impact on Your Tax Preparation and Deadlines
We know there is a lot of concern and uncertainty due to the Coronavirus (COVID-19). KRS has been closely monitoring the situation for several weeks. The health and safety of our employees and clients is a top priority as is ensuring all tax requirements are met by their respective deadlines. Our office remains open at this time. In the event we are required to close our office for a period of time, our operations will continue uninterrupted as our team is prepared and able to work remotely.
Read more: COVID-19 impact on tax prep