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The Pass through Entity Tax (PTET) Now Applies to New York State – Here’s What You Need to Know.

Featuring Phil London, Partner Emeritus Legislative changes in the New York State budget have created the highest combined local tax rate in the country for some New York City residents. At the same time, a Pass Through Entity Tax (PTET) was enacted in New York State. Below, Philip London, member of the New York State Society of CPAs, and the New York, Multistate and Local Taxation committee, provides insight on the new law. Tell us about your involvement in the passing...

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Got Unemployment Compensation? Don’t Rush to File or Amend Just Yet!

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager Last week, the $1.9 trillion American Rescue Plan Act of 2021 signed into law by President Biden included a very welcome retroactive tax provision for unemployed workers.  The bill provides that up to the first $10,200 of unemployment compensation benefits, paid to you in 2020, can now be excluded from taxable income, provided household income is under $150,000.  Although a very welcomed provision for the unemployed, there...

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PPP Loans Become More Favorable for Small Business, Other Important Updates

By Travis Miskowitz, Manager, CFO Advisory The Paycheck Protection Program (PPP) became more favorable to small business as the Small Business Administration (SBA) in cooperation with the Department of Treasury, revised the loan calculation for sole proprietors, independent contractors, and those that are self-employed increasing their chances of obtaining a higher loan amount in contrast to existing guidance. Other important updates were included in two new pieces of...

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PPP Processing Delays – More Communication Required from SBA

By Travis Miskowitz, Manager CFO Advisory When the Small Business Administration rolled out the Paycheck Protection Program in 2020, there was an immediate need to stem the losses and financial difficulties that small business owners were facing due to the pandemic and government-mandated shutdown orders. The early days of PPP were fraught with processing issues, incomplete or inconsistent guidance, and a lack of reliable resources for small business owners to reference when applying...

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The Business Interest Expense Limitation under IRC Section 163(j): What You Need to Know for the 2020 Tax Year

By Jennifer Beceiro, Tax Manager & Eliezer Gross, Real Estate Tax Director The Tax Cuts and Jobs Act (TCJA) amended IRC Section 163(j) that limited the deductibility of business interest expense for taxable years beginning after December 31, 2017. Business interest expense is limited to the sum of the Taxpayer’s business interest income, floor plan financing interest, and 30% of Adjusted Taxable Income (ATI). There are two situations that Taxpayers may not be subject to the 163(j)...

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Straight Outta Congress: How to Maximize the Employee Retention Credit (ERC) & Paycheck Protection Program (PPP)

By Travis Miskowitz, Manager, CFO Advisory This is a developing story; updates will be published as additional information becomes available. Update: March 3, 2021 As we enter March, we would like to remind our clients and friends that they may be eligible for 2 very beneficial programs: Employee Retention Credit (ERC) and a 1st Draw or 2nd Draw PPP loan. The ERC is a refundable credit which can now be claimed retroactively by PPP borrowers to 2020 if the company meets 2 main eligibility...

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PPP “Yeah, You Know Me” – 3rd PPP Application Window Opening Soon

By Travis Miskowitz, Manager, CFO Advisory Late Wednesday evening, the U.S Small Business Administration (SBA) in coordination with the Department of Treasury, issued guidance for the revamped Paycheck Protection Program (PPP) authorized by the Economic Aid Act of 2020. The newly released guidance includes: Interim Final Rule (IFR) “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” an 82-page consolidation of existing PPP guidance in the form of 24...

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Breaking Down the Employee Retention Credit in the New COVID Relief Bill

By Ilya Brodetskiy, Tax Manager Some significant updates are affecting the Employee Retention Credit, but there are still some important unknowns. Businesses that were ineligible for the ERC because they applied for PPP funding or who had over 100 full-time employees should reevaluate their eligibility based on the expanded program. The Consolidated Appropriations Act of 2021 introduced major changes to the Employee Retention Credit (ERC).  The first change allows businesses that...

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Show me the money…again! Congress agrees to $900B Emergency Coronavirus Relief Act of 2020

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager, and Travis Miskowitz, Manager, CFO Advisory Congressional leaders are close to finalizing the next round of stimulus, referred to as the Emergency Coronavirus Relief Act of 2020 providing for $900 billion in government funds aimed at supporting small businesses and the ailing economy. The coronavirus relief bill is expected to pass with bi-partisan support, and the President is expected to sign the bill into law quickly. The relief...

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Treasury and IRS Issue Guidance on Deductibility of Expenses Related to a PPP Loan

By Michael Bodrato, Director of Taxes The US Treasury and the Internal Revenue Service (“IRS”) released guidance on November 18, 2020, in Rev. Rul. 2020-27 and Rev. Proc. 2020-51, clarifying the tax treatment of expenses where a loan received under the Paycheck Protection Program (“PPP”) has not been forgiven by the end of the year in which the loan was received. The IRS clarified in a notice issued on May 18, 2020, that since under the CARES Act businesses are not taxed on the proceeds...

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How a Biden Administration May Change the Tax Landscape

By Laurie Smith With the presidential election in our rearview window (barely), next up on everyone’s mind is how president-elect Joe Biden’s tax proposals may impact you. Before we get into the details of some key proposals and planning opportunities, it is important to note there are still many unknowns. Crucially, it will not be clear until early-to-mid-January 2021 which party will control the Senate, the result of two run-off races in Georgia taking place on January 5. The outcome...

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Get To Know Federal Tax Form 5471, and The Post-2017 Revisions

By Mary Vasilescu The IRS collects information about foreign corporations with substantial United States (U.S.) ownership interests using Federal Tax Form 5471, Information Return for U.S. Persons With Respect to Certain Foreign Corporations. Form 5471 is used by certain U.S. persons who are officers, directors, or shareholders of certain foreign corporations to satisfy the reporting required under the Internal Revenue Code (IRC) and the related Treasury Regulations. Beware Hefty...

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Elective Business Alternative Income Tax for Pass-Through Entities to Address Federal Limitation on State and Local Deduction

On January 13, 2020, Governor Phil Murphy signed into law Senate Bill 3246 establishing the business alternative income tax, an elective New Jersey business tax for pass-through entities. A corresponding refundable state gross income tax credit is allowed for the owners of the pass-through entities to offset personal or corporate income tax liability.  The pass-through entity tax applies to tax years beginning on or after January 1, 2020.  The intent of the new legislation is to...

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New Jersey & New York Attempt Work-around on the SALT Deduction Limitation

New Jersey Governor Phil Murphy signed legislation this past Friday (May 4, 2018) which attempts to work-around the state and local tax deduction limitation imposed by the Tax Cuts and Jobs Act, which was enacted in December of 2017.  Under that federal legislation, the aggregate state and local tax deduction (which includes state income, property and sales tax) an individual taxpayer may claim is limited to $10,000 per year.  New York already has their version of a work-around...

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Upcoming Changes to New Jersey and New York Taxes

By Evan Gernant With tax reform legislation nearing enactment in Washington it’s easy to keep one’s focus on those headlines.  There are, however, important changes in New Jersey and New York tax that have already been signed into law and will impact local taxpayers.  Below is a summary of the more significant changes you will see affecting New Jersey and New York State taxpayers in 2018 and beyond. New Jersey The sales & use tax rate will continue decrease slightly.  A two-phase...

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Holy Matrimony: Contractors and New Jersey Sales Tax

By Tim Kennedy Not all work performed on a property is created equal in the eyes of the tax collector. Some improvements fall into the realm of capital improvement, while others are considered repairs, and still others are maintenance services. Because New Jersey sales tax rules differ based on the type of work performed, it is important to understand the classifications to avoid paying too much or too little in taxes. Here’s what you need to know. What work is exempt from sales...

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Does Your Business Qualify for Lucrative R&D Tax Credits?

By Wiss Associate “My company’s not in the business of research and development, so how could we qualify for R&D tax credits?” If that’s what runs through your head when you think of this particular credit, it’s understandable – especially if you don’t have any scientists or many engineers on staff. Or a dedicated research and development department. The truth is, you could earn lucrative federal, state and local tax credits with work that you don’t even think of in conventional...

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Governor Christie Keeps Reciprocal Agreement

By Wiss Employee In order to boost the state’s revenues, Governor Christie withdrew from a decades old tax agreement with Pennsylvania back in September. It left many business owners and employees anxious about 2017 income taxes and filings. Read in our past blog post about the repercussions of withdrawing from the agreement. On November 22, Gov. Christie announced that the reciprocal agreement with Pennsylvania will remain in place.  New Jersey and Pennsylvania residents that...

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Christie Launches NJ Gas Spike to End Road Funding Crisis

By Christopher Colyer After an extensive three-month long political and financial stalemate, New Jersey Governor, Chris Christie and Democratic leaders reached a deal to renew the Transportation Trust Fund, reviving dozens of construction plans that remained lifeless for months on end. By proposing to raise the gas tax by 23 cents a gallon to replenish the fund, which is recycled and applied to road, rail, and bridge improvements for the state, New Jersey’s transportation projects...

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Income Tax Pact Dismantled: Gov. Christie Terminates Tax Covenant with PA

By Philip London Do you cross the Delaware River on the way to work? By next year, your commute will be even more expensive. For the past 38 years, neighbor states Pennsylvania and New Jersey have preserved a reciprocity pact that allows taxing solely where workers reside, not where they work. Thus, NJ does not collect tax on PA residents working in New Jersey, and vice versa. However, last week, Governor Christie withdrew from the tax agreement. Consequently, roughly a quarter-million...

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Sales Tax Nexus – Comprehending your Business’ Sales Tax Obligations

By Wiss Employee In simpler times, a New York-based industry sold its products or services within its state boundaries. As such, it was their responsibility to gather and remit sales tax to the taxing authority of The Big Apple. However, thanks to the rapid advancements in technology, today’s corporate atmosphere has become much more multifaceted. As inter-state sales are becoming routine, the same New York-based company has many more consumers to choose from, amplifying their client...

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How to Avoid Tax Penalties on Complimentary Hotel Breakfasts

By Mark Feldstein When is a free meal not really free? When a New York State hotel is offering a complimentary breakfast to its guests. While complimentary breakfasts are free – in a sense – to your guests, if your hotel is audited, you could get a tax bill. And the tax penalties for months – or years – of presumed “tax-free” food can add up. New York sales tax and occupancy tax returns are, in most circumstances, subject to audit for up to three years, longer if fraud is suspected....

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How to Take Advantage of the Grow NJ Tax Credit

By Bill Beiermeister The only bad thing about tax credits is the possibility of missing out on one. To make sure that doesn’t happen to your business, here is some background on the Grow New Jersey tax incentive and how it could affect your company. Per-employee credits add up The Grow New Jersey Assistance Program is offered through the state’s Economic Development Authority (EDA) to encourage businesses in technology, manufacturing, warehousing, research and development and other...

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Manhattan taxpayers, be aware of the Commercial Rent Tax

By Kyle Pennacchia and Paul Ursich In New York City, the Commercial Rent Tax (CRT) is often overlooked, and many of those who miss it face penalites and interest for late or missed filings. Here’s a brief introduction to the tax, basic qualifications and links to more detailed information. Are you subject to the CRT? The CRT applies to Manhattan tenants who occupy or use property south of 96th Street for most trade, business, professional and commercial transactions. As with most...

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Ecommerce Sales Tax Terms you Need to Know

By Kyle Pennacchia If your company conducts business in a number of states, you understand how convoluted the sales tax process can be. Traditionally, you started with figuring out how to adhere to the tax collection standards of your own state, then you determined in which other states you were deemed to have a legal presence and, therefore, a tax obligation. Then came the Internet. Ecommerce is a great way to find customers globally that you couldn’t have in the bricks-and-mortar-only...

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