COVID-19 Tax and Financial Updates 04-03-2020

Here are the latest updates and some may have already changed after this was written:

Tax Updates

  • Tax deadlines: both New Jersey and New York have finally extended the tax deadline from April 15th to July 15th.
  • CARES Act economic impact payments: payments will begin in the next three weeks and will be distributed automatically. Who is eligible?
    • Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
    • Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.

Paycheck Protection Program for Small Businesses

Here is a summary of the program and you can start applying for this as of today, April 3rd. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Remember, guidance is changing on an almost daily basis so this information can change and probably already has.

  • Overview: This program, also known as PPP provides funds to pay for payroll costs, interest on mortgages, rent, and utilities. The amount of the loan is generally calculated by multiplying 2.5 by your average monthly payroll costs.
  • Eligibility: Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors – are eligible. Businesses with more than 500 employees are eligible in certain industries
  • Forgiveness: Loan funds may be fully forgiven if used to pay for payroll costs, interest on mortgages, rent, and utilities within 8 weeks beginning on the date of the loan. 75% of the funds must be used for payroll to be forgiven.
  • Headcount: You must maintain or quickly rehire your employees and also maintain salary levels. Forgiveness will be reduced if headcount declines or if salaries and wages decrease.
  • Maturity: The loan has a maturity of 2 years and an interest rate of 1%.
  • The loan does not have a personal guarantee.
  • An application form is attached to see more details of what is required.

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