New York Provides Additional Relief for Small businesses, Nonprofits and Small Landlords
In the wake of the COVID-19 pandemic, New York State has implemented a new economic recovery loan program known as the New York Forward Loan Fund (NYFLF). The loan program is targeted at supporting small businesses, nonprofits and small landlords within New York state.
The loan program supports small businesses with 20 or less full-time employees, nonprofits and small landlords that have seen a loss of rental income. Loans provided to small landlords will be provided to those owners with residential buildings of 50 units or less and will prioritize the loans for those landlords with properties in low and moderate-income areas.
The NYFLF provides working capital loans so that small businesses, nonprofits and landlords can have access to credit as they begin to reopen due to COVD-19.
Loans provided under the NYFLF are only available to those small business, nonprofits and small landlords that did not receive a loan from the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) or the SBA Economic Injury Disaster Loans (EIDL). Additionally, loans provided under the NYFLF are not forgivable and will need to be paid back over a 5-year term with interest.
According to the Empire State Development website, the geographic proportionality goals for the NYFLF for small businesses are:
- Capital Region 4%
- Central NY Region 4%
- Finger Lakes Region 4%
- Hudson Valley Region 12%
- Long Island Region 18%
- Mohawk Valley Region 4%
- NYC Region 30%
- North Country Region 4%
- Southern Tier Region 4%
- Western NY Region 8%
The NYFLF is being funded by Apple Bank, BNB Bank, BlackRock Charitable Fund, Citi Foundation, Evans Bank, Ford Foundation, M&T Bank, Morgan Stanley, Ralph C. Wilson, Jr. Foundation and Wells Fargo.
Three New Tax Credits Available to Businesses Impacted by COVID-19
The IRS announced three new tax credits available to employers impacted by COVID-19. The Employee Retention Credit, designed to encourage businesses to keep employees on their payroll, provides a refundable tax credit at 50% of up to $10,000 in wages paid by an eligible employer whose business was financially impacted by COVID-19. This credit is available to all business regardless of size and includes tax-exempt organizations. The IRS announced there are only two exceptions: State and local governments and small business who received small business loans.
However, qualifying employers must fall into one of two categories:
- The business is fully or partially suspended by a government order due to COVID-19 during the calendar quarter.
- The business’ gross receipts are below 50% of the comparable quarter in 2019. Additionally, if a business’ gross receipts go above 80% of a comparable quarter in 2019 they do not qualify.
The Paid Sick Leave Credit allows businesses to receive a credit for an employee who was unable to work due to Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and was seeking a diagnosis. These impacted employees are entitled to paid sick leave for up to 10 hours at their regular rate of pay up to $511 per day and $5,110 in total.
An employer can also receive a credit for employees who are unable to work if they are caring for someone with Coronavirus or caring for a child because the child’s school or place of care was closed due to the Coronavirus. These impacted employees are entitled to paid sick leave for up to two weeks at 2/3 the employee’s regular rate of pay up to $200 per day and $2,000 in total.
Employees are also entitled to paid family and medical leave equivalent to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total.
Employers are eligible for immediate reimbursement of the credit by reducing their required deposits of payroll taxes that have been withheld from the employees’ wages by the amount of the credit.
With these new tax credits, eligible employers will report their total qualified wages and related health insurance costs for each quarter with their quarterly employment tax returns (Form 941) beginning with the second quarter. If an employer’s employment tax deposits are insufficient to cover the credit the employer may receive an advance payments from the IRS by submitting Form 7200.
IRS Extends Tax Filing Deadline
Due to COVID-19, the tax filing deadline was postponed from April 15, 2020 to July 15, 2020. Under this extension, taxpayers who owe for tax year 2019 or need to pay 2020 estimated taxes originally due for the first quarter on April 15 or the second quarter on June 15 can now schedule an electronic payment up to the July 15, 2020 date.
Prepared by Nicholas M. Hriczko