New York state personal income tax and corporate tax returns, originally due on April 15, 2020, have been extended to July 15, 2020.
In response to the COVID-19 pandemic, federal, state and local governments, through both legislative and executive action, have enacted or ordered a broad array of financial measures to mitigate the adverse economic effects experienced by businesses and nonprofit entities.
This Alert will identify and explain the economic programs established by the federal government, New York state and New York City to help businesses in New York that are experiencing financial loss due to COVID-19.
Federal Economic Aid Programs
Economic Injury Disaster Loans and Loan Advances
Small business owners with fewer than 500 employees currently experiencing a temporary loss of revenue due to COVID-19 are eligible to apply for Economic Injury Disaster Loans (EIDL) to pay immediate expenses such as payroll, bills/accounts payable and fixed debts. Details of the program are discussed in our previous Alerts.
Loan amounts are up to $2 million, with loan advances of up to $10,000. The loan advance shall be awarded within three days of submitting an application. The advance can be used to keep employees on payroll, pay for sick leave, meet increased production costs or pay business obligations. The loan advance does not have to be repaid.
Note: As of April 16, 2020, the Small Business Administration (SBA) is currently unable to accept new applications.
Businesses in certain industries may still qualify even if they have more than 500 employees, if they meet the SBA’s size standards.
Paycheck Protection Program
The SBA is offering a low-interest, no fee loan of up to $10 million for small businesses, nonprofits and sole proprietors to help retain employees and aid cash flow through the Paycheck Protection Program (PPP). Previous Alerts discuss the program, its FAQ guide and the interim final rule.
The SBA will forgive the loan if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, insurance, paid sick or medical leave, mortgage interest or utilities. The applying entity must have fewer than 500 employees. Loan repayments will be deferred for six months.
Applicants can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution that has agreed to participate.
The Paycheck Protection Program is available through June 30, 2020.
Note: PPP funds have run out, but Congress is discussing adding more money into the program.
Express Bridge Loan Pilot Program
As businesses await proceeds from the EIDL program, the SBA is offering temporary financial assistance of up to $25,000 through the Express Bridge Loan pilot program.
The applicant must have a preexisting relationship with an SBA Express Lender. The borrower can use the loan while it is applying for the EIDL loan. However, the loan must be repaid in full or in part by the proceeds from the EIDL loan.
New York State Tax Assistance Programs
Tax Return Extension
New York state personal income tax and corporate tax returns, originally due on April 15, 2020, have been extended to July 15, 2020. Further, all related tax payments due on April 15, 2020 may be deferred to July 15, 2020 without penalties and interest.
Penalty and Interest Waiver for Sales Tax Vendors
Sales tax payments and returns were due on March 20, 2020. However, penalties and interest may be waived for quarterly and annual filers who were unable to file or pay on time due to COVID-19.
New York State/City Economic Programs
New York City Employee Retention Grant Program
New York City will provide grants of up to $27,000 to small businesses with fewer than five employees to cover 40 percent of payroll costs for two months to help retain employees. The business must demonstrate that the COVID-19 outbreak resulted in at least a 25 percent decrease in revenue.
Note: As of April 3, 2020, the New York City Employee Retention Grant Program stopped accepting applications.
New York City Small Business Continuity Loan Fund
Small businesses in New York City that employ fewer than 99 employees can apply for up to $75,000 in interest-free loans if they have experienced at least a 25 percent decrease in revenues as a result of COVID-19.
Note: As of April 16, 2020, the New York City Small Business Continuity Loan Fund has stopped accepting applications.
Renaissance Economic Development Corporation Emergency Small Business Relief Loan Fund
New York City small businesses with 50 or fewer employees whose sales have decreased by at least 25 percent due to COVID-19 can apply for a 3 percent fixed interest rate loan of up to $50,000. Payments may be deferred up to six months and the loan term is up to 48 months amortization.
The application deadline is August 31, 2020.
Unemployment Insurance Benefit Program
New York state has waived the seven-day waiting period to apply for unemployment insurance benefits for those out of work due to COVID-19 closures or quarantines. Applicants must be ready, willing and able to work, and actively looking for work during each week they are claiming benefits.
Deferment of Premiums for New York Residents and Small Businesses
New York residents or small businesses who pay life insurance, individual or small group commercial health insurance, property insurance or casualty insurance premiums may defer premiums and fees for up to 90 days.
About Duane Morris
Duane Morris has created a COVID-19 Strategy Team to help organizations plan for, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For More Information
If you have any questions about this Alert, please contact Brad A. Molotsky, Nanette C. Heide, Matthew E. LoBello, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.