As states continue to offer tax return filing, payment deferrals and other assistance measures in light of the COVID-19 pandemic, we take a closer look at New York.
>> Learn more about relief efforts identified in other states in which our firm is located in our easy-to-use spreadsheet tracker
New York State Tax Filing and Payments Deferred
Relief: New York has deferred the personal income tax and corporation income tax return filings originally due April 15, 2020, to July 15, 2020. Additionally, New York has deferred all related tax payments, including estimated taxes for the 2020 tax year, originally due April 15, 2020, to July 15, 2020, without penalties and interest (regardless of amount owed).
Furthermore, New York is willing to abate late filing and payment penalties and interest on quarterly and annual sales and use tax returns originally due March 20, 2020, filed no more than 60 days after the original deadline. Relief can be requested by visiting the New York Department of Taxation's website or by following the instructions on any notice seeking interest and/or penalty payments.
New York City is also offering an extension for personal income taxes, as well as business and excise tax returns due between March 16, 2020, and April 25, 2020. Penalties for late filing, late payment and underpayment will be waived if the delay in filing was caused by COVID-19-related issues. Tax payment deadlines have not changed, however, which means that interest will accrue on late payments.
Who this Impacts: All businesses and individuals filing New York or New York City tax returns.
New York Revenue Bill A. 9508B/S. 7508B
New York passed their most recent Revenue Bill in April 2020, which provides any amendments made to the IRC after March 1, 2020, do not apply to New York tax returns for years beginning before January 1, 2022. As such, New York and New York City will not conform to most of the federal CARES Act provisions signed into legislation on March 27, 2020.
Relief: However, there is one exception identified in New York's conformity to the CARES Act’s modifications of IRC 163(j)(10)(B)(i). It appears taxpayers may be able to elect to use their 2019 adjusted taxable income in computing their 2020 state and city interest expense limitations.
Additionally, the Bill provides for several New York tax credits:
- Enhanced credits for “green projects” to the Excelsior Jobs Program. Qualifying projects are those that “make products or develop technologies primarily aimed at reducing greenhouse gas emissions or supporting the use of clean energy.” The refundable credits include: (1) 7.5% jobs credit of gross wages paid per new job; (2) 5% investment credit on qualifying investments; and (3) 8% research and development credit on qualifying New York expenditures.
- Added the Hire-A-Vet credit, now available for employers hiring a qualifying veteran commencing employment prior to January 1, 2021.
- Modified the film production and post-production credits to allow a 25% credit (previously 30%) for qualifying production costs through 2025.
Who this Impacts: All businesses and individuals filing New York tax returns.
New York Shared Work Program
Relief: The Shared Work Program is an alternative to layoffs for employers. It allows workers to remain employed and employers to retain trained staff during times of reduced business activity. Under the plan, employers reduce employee hours to avert a layoff. Employees work reduced hours and receive partial unemployment insurance benefits proportionate to their reduced hours.
Who this Impacts: Employers with two or more New York employees and current unemployment insurance contributions for four consecutive quarters are eligible to participate in the program.
New York State Emergency Paid Sick Leave and Guaranteed Job Protection
Relief: Effective March 18, 2020, New York State enacted Emergency COVID-19 Paid Sick Leave. If an employee is under a mandatory or precautionary order of quarantine or isolation issued by the state, New York State Department of Health, local board of health or other authorized government entity, they may be eligible for job-protected sick leave and compensation through a combination of disability and Paid Family Leave Benefits.
Who this Impacts: Employers with greater than $1 million in 2019 revenues. Specifically, the provision impacts employers who have:
- Less than 10 employees as of January 1, 2020, and business income greater than $1 million in 2019, the employer is required to provide employees with five days paid sick leave.
- Anywhere from 11 to 99 employees as of January 1, 2020, the employer is required to provide five days paid sick leave.
- Greater than 100 or more employees as of January 1, 2020, the employer is required to provide 14 days paid sick leave for a COVID-19-related quarantine, which should cover the period of mandatory or precautionary quarantine or order of isolation.
NYC Small Business Continuity Loan Fund
Relief: New York City will provide relief in the form of zero interest loans of up to $75,000 to small businesses across the city seeing a reduction in revenue because of COVID-19.
Who this Impacts: Businesses with fewer than 100 employees who have seen sales decrease 25% or more due to COVID-19.
- 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 ability to repay the loan
- Have no outstanding tax liens or legal judgments
Note that applications for this program have been paused at this time.
Contact a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.