Filing Extensions and Business Relief

What are my options for federal assistance?

1. Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19). SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance to small businesses to help overcome the temporary loss of revenue they may have experienced. 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. The interest rate for non-profits is 2.75%. SBA offers loans with long-term repayments in order 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. The following link continues to be the most efficient way to begin the application process: https://www.sba.gov/funding-programs/disaster-assistance.
2. Non-life-sustaining business may continue to operate remotely virtual or by telework (i.e. working from home) conducted individually, and in doing so follow the social distancing and other COVID-19 mitigation guidance provided by the Pennsylvania Department of Health and CDC.

 

How is Pennsylvania responding to COVID-19 in terms of tax filing extensions and funding for small businesses?

1. On March 27, 2020, Governor Wolf signed House Bill 1232, which extends the deadline for individuals who are required to declare and pay estimated state personal income tax as well as delays the filing of informational returns for Pennsylvania S corporations and partnerships, estates, and trusts. The legislation also authorizes the Department of Community and Economic Development (DCED) to coordinate with local political subdivisions to extend filing and payment deadlines for the local Earned Income Tax. The deadlines have been extended to July 15, 2020.
2. COVID-19 Working Capital Access Program (CWCA) Tom Wolf announced that new funding is available to help small businesses devastated by the novel coronavirus through the COVID-19 Working Capital Access Program, a new program under the Pennsylvania Industrial Development Authority’s (PIDA) Small Business First Fund. The Commonwealth Financing Authority (CFA) recently authorized the transfer of $40 million to the Small Business First Fund for CWCA. PIDA authorized making $60 million available to provide loans of $100,000 or less to for-profit businesses with 100 or fewer full-time employees. Funds are expected to become available this week. Loan terms are three years with a 12-year amortization. In addition, 1) No payments will be due and payable during the first year, 2) Principal and if applicable, interest payments will be due monthly for years two and three, and 3) A balloon payment will be due and payable at the end of the third year.  The interest rate for the program is 0%. For the purposes of this program, a retail or service enterprise is defined as a for-profit business entity that is involved in business-to-business service, business-to-public service, mercantile, commercial, or point-of-sale retail sectors. Eligible costs include working capital, which for purposes of this program is considered capital used by a small business for operations, excluding fixed-assets and production machinery and equipment.  Any eligible working capital cost, as defined above, incurred by the eligible business enterprise three months prior to submission of the loan application will count as an eligible cost toward either the loan amount or, if applicable, the matching investment requirement. Retail/service enterprises are able to incur eligible working capital costs up to six months prior to submission of the loan application. Loan applications are packaged by a Certified Economic Development Organization (CEDO) that services the county your business is located in. A listing of those organizations is as follows:
   1. Philadelphia – Philadelphia Industrial Development Corp, 1500 Market Street, Suite 3500 West, Phila., PA 19102, Phone – 215-496-8193
   2. Delaware County – Delaware County Economic Development Oversight Board, 100 W. 6^th, Media, PA 19063, Phone – 610-566-2225
   3. Chester County – Chester County Economic Development Council, Eagleview Corporate Center, 737 Constitution Dr., Exton, PA 19341, Phone – 610-321-8241
   4. Montgomery County – Montgomery County Commerce Department, Human Service Center – 5^th Floor, P.O. Box 311, Norristown, PA 19401, Phone – 610-278-3471

Is Delaware providing filing extensions?

1. The Delaware Department of Revenue has extended the personal, personal estimate, corporate final and corporate tentative filing date to July 15, 2020 to coincide with the Federal change in due date.

Is New Jersey providing filing extensions?

1. As of this writing, the state of New Jersey has not extended the personal income tax and personal estimated income tax due date to file these returns, to coincide with the federal change in due date.

Is Philadelphia providing filing extensions and funding for small businesses?

1. BIRT and NPT filing and payment extensions
   1. The City is honoring the U.S. federal government extensions to businesses for filing and payments until July 15, 2020 for the BIRT and NPT, including estimated payments.
   2. There is no additional action required by businesses that file these returns at this time.
2. COVID-19 Small Business Relief Fund grant and zero-interest loans administered by the Department of Commerce and Phila. Industrial Development Corporation (PIDC):

Relief program	Eligible businesses	Amount available per business	What you’ll need to apply
Microenterprise Grant	Annual revenue under $500,000	$5,000 grant	Signed tax return to confirm annual revenue. A description of the impact of COVID-19 on your business, and your recovery plan.
Small Biz Grant	Annual revenue $500,000 to $3 million	Up to $25,000 grant, amount determined by review of application	Signed tax return. 2019 financial statements. Verification of cash flow needs. Proof of insurance. A description of the impact of COVID-19 on your business, and your recovery plan.
Small Biz Zero-Interest Loan	Annual revenue $3 – $5 million	$25,000 – $100,000 loan, amount determined by review of application	Signed tax return. 2019 financial statements. Verification of cash flow needs. Proof of insurance. A description of the impact of COVID-19 on your business, and your recovery plan. No collateral requirements.

There is one application for all three programs, the link of which can be found at the bottom of the following website: www.phila.gov/covid-19-business-relief.  For questions contact Office of Business Services at 215-683-2100 or Business@Phila.gov.

3. Wage Tax guidance for non-resident employees
   1. Non-resident employees with jobs based in Philadelphia are not subject to Philadelphia Wage Tax during the time they have been ordered or required to work outside Philadelphia

4. Real estate taxes – the deadline has been extended to April 30, 2020

How is Earned Income Tax filing affected in Pennsylvania?

1. On March 27, 2020, Governor Wolf signed House Bill 1232, which authorizes the Department of Community and Economic Development (DCED) to coordinate with local political subdivisions to extend filing and payment deadlines for the local Earned Income Tax. The deadlines have been extended to July 15, 2020. Berkheimer (Montgomery County) and Keystone Tax Collection (Bucks, Chester and Delaware County’s) will all follow the Federal and PA extended filing and payment dates of July 15, 2020 for both the final Earned Income Tax Return and first Quarterly Estimated Tax Return.

 

If you have any questions, please do not hesitate to reach out directly to your accountant.