Your McCarthy Update
Marty McCarthy, CPA, CCIFP
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Focused on You. Dedicated to Your Success.
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October 19, 2020
COVID-19 Update
(Accounting Today) Remote Workers May Provide Tax Savings for Employers. Working remotely during the pandemic may become routine, as both companies and workers come to appreciate the convenience and savings available. Companies in major cities are making plans to downsize their workspaces, while many employees find they prefer the convenience of working from home. Some of the risks involved, such as surprise nexus issues, are obvious — employees that reside in a different state than their business can subject their employer to tax in the state where they perform their work. Read more.
(Bloomberg) U.S. Jobless Claims Jump, Americans Move to Extended Programs. Applications for U.S. state unemployment benefits unexpectedly jumped last week, and more Americans moved to longer-term aid, underscoring a recent slowing in the pace of the labor market’s recovery. Read more.
(CFO) CFOs Are Skeptical About Recovery Before Next Year. U.S. finance executives remain more optimistic about the economy than they were in the spring but very few expect to return to pre-COVID levels of employment and revenue until at least 2021, according to The CFO Survey. Learn more.
(Harvard Business Review) Put Employees at the Center of Your Post-Pandemic Digital Strategy. While you may have needed your organization to run at 200 miles-per-hour as you learned to adjust to the new realities of the pandemic, you are now risking serious burnout among your team. Research shows that employees are reporting alarming levels of stress and fatigue, and the risk for depression among U.S. workers has risen by 102% because of the COVID-19 pandemic. Learn what to do.
(Journal of Accountancy) SBA Settles Confusion Over PPP Forgiveness Application Due Date. The U.S. Small Business Administration (SBA) released guidance confirming that Paycheck Protection Program (PPP) loan forgiveness applications are not due on Oct. 31. Learn more.
(New Jersey Business & Industry Association) Gov. Murphy Announced $100M Will be Available to Help Businesses and Families. Gov. Phil Murphy announced that $100 million in additional CARES Act funding will be provided to New Jersey small businesses and families affected by COVID-19. Learn more.
(New Jersey Business) NJEDA Announced a $70M Phase 3 COVID-19 Grant Program. The New Jersey Economic Development Authority (NJEDA) announced Phase 3 of the Small Business Emergency Assistance Grant Program. Phase 3, which will be funded with $70 million in CARES Act funding, significantly expands eligibility and increases the funding businesses can receive. To ensure funding goes to businesses hit hardest by the pandemic, Phase 3 sets aside funding for restaurants, micro-businesses, and businesses based in Opportunity Zone-eligible census tracts. Read more.
(New Jersey Business) New Jersey Moves CBT Filing Deadline to Nov. 16. Gov. Phil Murphy signed an executive order that extends the deadline for 2019 Corporation Business Tax (CBT) calendar year returns being filed under extension to Nov. 16 due to the ongoing COVID-19 pandemic. Learn more.
(New Jersey 101.5) Survey: Workers Worry About Safety as More Businesses Prepare to Reopen. As the number of positive COVID-19 cases continues to rise in the Garden State, plenty of workers and the people who employ them still do not know exactly when operations will continue fully at the office. Read more.
(NJBIZ) NJ Unemployment Falls Below Great Recession Rate for 1st Time Amid COVID. New Jersey’s unemployment rate fell to 6.7% for the month of September, measuring below rates seen at the height of the Great Recession for the first time since March, according to the state labor department. Read more.
(Philadelphia Business Journal) Philadelphia Releases New Cold Weather Outdoor Dining Guidelines Around Shelters and Heating. Philadelphia officials released new outdoor dining safety standards aimed at helping restaurants transition their setups to better facilitate cold weather dining. The new guidelines offer specific recommendations around outdoor winter shelters and heating. Read more.
(Philadelphia Business Journal) Wolf Urges More Funding for Pennsylvania's Small Businesses after $96.3M in Grants are Approved. Gov. Tom Wolf urged the state legislature to more than double the amount of grant funding to Pennsylvania's small and historically disadvantaged businesses as they recover from the COVID-19 pandemic. Read more.
(Philadelphia Business Journal) Wolf Vetoes Bill to Increase Pennsylvania’s Restaurant Capacity. Gov. Tom Wolf vetoed a bill that would have allowed the state's bars, restaurants, and banquet halls to reopen up to 100% capacity during the COVID-19 pandemic. Discover why.
In Other News
(Accounting Today) Tax Burden Equal to 70% Rate Crushes Americans Unable to Pay. Millions of low-income Americans are locked into poverty thanks to U.S. tax policy, Federal Reserve Bank of Atlanta researchers say. About a quarter of lower-income workers effectively face marginal tax rates of more than 70% when adjusted for the loss of government benefits. That means for every $1,000 gained in income, $700 goes to the government in taxes or reduced spending. In some cases, there are no gains at all. Discover why.
(Accountingweb) More Tax Code Changes for Individuals in 2020. The year 2020 has been filled with change, and the tax code is no exception to this. Recently, yet another occurred: Taxpayers are now temporarily allowed to deduct charitable contributions. Learn more.
(Bloomberg) Mortgage Rates Fall to a Record Low for the 10th Time This Year. The average for a 30-year, fixed loan dropped to 2.81%, down from 2.87% last week and the lowest in almost 50 years of data-keeping, Freddie Mac said. Learn more.
(CPA Practice Advisor) Key Income Tax Changes for Mortgage Interest. Congress keeps chipping away at itemized deductions like the one for mortgage interest. This includes changes under the Tax Cuts and Jobs Act (TCJA) for 2018 through 2025. Generally, you can still deduct most or all the mortgage interest you pay if you continue to itemize deductions on your personal tax return. Learn more.
(CPA Practice Advisor) Coping with the Current Net Investment Income Tax. The outcome could be significant on a number of fronts. One issue that has largely flown under the radar: The Affordable Care Act (ACA) authorizes the imposition of several taxes, including the “net investment income tax” (NIIT) affecting certain high-income investors. Read more.
(Harvard Business Review) What is the Best Way to Create Long-Term Value? It is a well-known paradox. Most executives are committed to the idea of maximizing long-term shareholder value, but when they want to track and improve performance, they focus on a dizzying variety of short-term measures. Learn more.
(New Jersey Business) NJ CEO Coalition Looks to Hire or Train 70,000 Residents by 2030. A coalition of CEOs from major New Jersey-based corporations are pledging to hire or train more than 30,000 state residents from underrepresented communities and communities of color by the end of the decade. They also plan to spend $250 million by 2025 on procurement with state-based diverse companies. Read more.
(The Tax Advisor) 2021 Social Security Wage Base Announced. The Social Security Administration (SSA) announced that the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $142,800 in 2021 from $137,700 in 2020. Read more
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
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