I. TAX DEADLINES EXTENDED TO JULY 15, 2020
II. TEMPORARY TOLLING OF LAND USE APPROVALS IS COMING
III. EXECUTIVE ORDER 122 TIGHTENS RESTRICTIONS ON CONSTRUCTION AND PROVIDES RULES OF BEHAVIOR FOR PERMITTED ESSENTIAL BUSINESSES
- TAX DEADLINES EXTENDED TO JULY 15, 2020
Attention all taxpayers! Effective April 9, 2020, the IRS released Treasury Notice 2020-23, proving taxpayers with further tax extensions, beyond the Disaster Relief Deadline Extensions provided Notice 2020-18, which postponed the Federal income tax deadline to July 15, 2020, and Notice 2020-20, which provided additional relief for extensions on federal gift tax returns and payments also to July 15, 2020.
This latest Notice expounds upon the previous two notices and extends additional tax payment, filing, and other specified time-sensitive actions until July 15, 2020.
TAX FILINGS, PAYMENTS AND FORMS
A list of the tax return, forms, and respective payment extensions are as follows:
- Individual Income Tax Returns- U.S. Form 1040, 1040-SR, 1040-PR, and 1040-SS
- Corporate Tax Returns- U.S Form 1120, 1120-C, 1120-S, 1120-F, 1120-H, 1120-L, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, and 1120-SF
- Partnership Tax Returns- U.S. Forms 1065 and 1066
- Estate and Trust Income Tax Returns- U.S. Form 1041, 1041-N, 1041-QFT
- Estate and Generation Skipping Tax Returns- U.S. Form 706, 706-NA, 706-A, 706-QDT, 706 GS(T), 706-GS(D-1)
- Form 8971- Information Regarding Beneficiaries Acquiring Property from a Decedent
- Gift Tax Returns- U.S. Form 709
- Extension of Estate Tax Payments Deadlines under Section 6166, 6161 or 6163
- Exempt Organization Business Income Tax Returns- Form 990-T
- Excise Tax Returns- U.S. Form 990-PF
- Quarterly Estimated Income Tax Payments- Form 990-W, 1040-ES, 1040-ES(NR), 1040-ES (PR)
- Estimated Income Tax for Estates and Trusts- 1041-ES
- Estimated Tax for Corporations- 1120-ES
- Form 4868- Individual Income Tax Return Extensions filing deadline has been extended to July 15, 2020, however the filing deadline for such extensions remain as of now, October 15, 2020.
1031 LIKE-KIND EXCHANGE RELIEF
Notably, no relief has been granted for any due dates where performance is required prior to April 1, 2020, however the IRS has also extended time-sensitive deadlines where taxpayers must perform on or after April 1, 2020, but before July 15, 2020. This includes filing petitions with the Tax Court or for filing for a claim for credit or refund, or filing deadlines or 1031 like-kind exchanges.
In a like-kind exchange under the Internal Revenue Code, income taxes due on the sale of investment property can be deferred if the taxpayer subsequently acquires one or more other like-kind replacement properties. In order to qualify for the like-kind exchange, amongst the criteria, is a forty-five (45) identification period where the replacement property must be identified and the closing on the replacement property must occur within one-hundred eighty (180) days of the sale of the investment property. These deadlines run concurrently.
Taxpayers whose forty-five (45) day identification deadline or one-hundred eighty (180) deadline falls after April 1, 2020, but before July 15, 2020, will now have until July 15, 2020 to identify the replacement property or to close on the replacement property, respectively. However, because these deadlines run concurrently, any deadline occurring on or after July 15, 2020 will remain unchanged. For example, taxpayer sells its relinquished property on February 16, 2020. The identification period would typically fall on April 1,2020, however pursuant to Notice 2020-23, the new deadline is now July 15, 2020, but the deadline on the purchase of replacement property remains, under current law, August 14, 2020.
We continue to stay abreast of the continued changes in laws in response to the COVID-19 outbreak and intend to keep you informed through this unprecedented time.
For a full review of IRS Notice 2020-23, please visit the IRS website at the link provided:https://www.irs.gov/pub/irs-drop/n-20-23.pdf
The U.S. Department of Treasury Regulations require that we notify you that you cannot rely on this written advice for avoiding tax penalties. Therefore, we welcome you to contact our office if you have any questions concerning the extensions outlined above.
- TEMPORARY TOLLING OF LAND USE APPROVALS IS COMING
The New Jersey Senate and Assembly both have legislation pending to modify N.J.S.A 40:55D-136.2, which would toll the expiration of most governmental approvals due to the COVID-19 crisis. It is believed that this legislation will be passed today, April 13, 2020. This statute was used during the 2008 economic recession and the aftermath of Superstorm Sandy. The statute, if passed, will toll the expiration of all Approvals, as defined in the statute, beginning March 9, 2020 continuing for as long as a public health emergency, pursuant to the “Emergency Health Powers Act” or a state of emergency declared by the Governor is still in effect.
It is important to note that the tolling under the Act does not extend the approval more than 6 months beyond the conclusion of the COVID-19 extension period. By way of example, assume that on March 9, 2020 there were seven months left on the life of an approval. Assume that the tolling period lasts three months. This would mean that once the tolling period ends, there are six months left on the life of the approval. However, assume on March 9, 2020, there were 2 years left on the approval. Also assume the tolling period lasts 3 months. The approval does not expire six months after the tolling period. Instead, it expires March 9, 2022. This can cause a lot of confusion, as it did in 2008 and 2012. Feel free to contact our office directly to analyze how this tolling period impacts your approval.
Finally, the proposed legislation exempts certain approvals from receiving the benefit of this tolling period. Some of those approvals are:
- Approvals in “environmentally sensitive areas” as defined in the legislation;
- any Federal approvals;
- any permit or approval issued pursuant to the “Pinelands Protection Act” if the extension would result in a violation of federal law or any State rule or regulation requiring approval by the Secretary of the Interior;
- any permit or approval within an environmentally sensitive area issued pursuant to the “Highlands Water Protection and Planning Act,”
- any permit or approval issued by the Department of Transportation other than a right-of-way permit;
- any approval issued pursuant to the “Flood Hazard Area Control Act,” except for those permits or approvals where work has commenced, in any phase or section of the development or on any buildings or structures
- any coastal center designated pursuant to the “Coastal Area Facility Review Act” (CAFRA), that has not submitted an application for plan endorsement, and was not in compliance with the provisions of the Coastal Zone Management Rules as of March 15, 2007; and
- the obligation of any wastewater management planning agency to submit a wastewater management plan or plan update, or the obligation of a municipality to submit a wastewater management plan pursuant to the “Water Quality Planning Act,” and the Water Quality Management Planning rules adopted by the Department of Environmental Protection, effective July 7, 2008.
- EXECUTIVE ORDER 122 TIGHTENS RESTRICTIONS ON CONSTRUCTION AND PROVIDES RULES OF BEHAVIOR FOR PERMITTED ESSENTIAL BUSINESSES
In New Jersey’s efforts to continue to “flatten the curve,” Governor Phil Murphy signed Executive Order No. 122 (“EO 122”) into law on April 8, 2020. EO 122 places heavy restrictions on most building projects and implements new rules of conduct for operating essential retail businesses, permitted manufacturing, warehousing, office, and essential construction and other commercial operations.
“The physical operations of all non-essential construction projects shall cease…” as of 8 P.M. Friday, April 10, 2020. Only the following construction projects are exempt from the ban as follows:
- Projects necessary for the delivery of health care services, including but not limited to hospitals, other health care facilities, and pharmaceutical manufacturing facilities;
- Transportation projects, including roads, bridges, and mass transit facilities or physical infrastructure, including work done at airports or seaports;
- Utility projects, including those necessary for energy and electricity production and transmission, and any decommissioning of facilities used for electricity generation;
- Residential projects THAT ARE EXCLUSIVELY DESIGNATED AS AFFORDABLE HOUSING;
- Projects involving pre-K-12 schools, including but not limited to projects in Schools Development Authority districts, and projects involving higher education facilities;
- Projects ALREADY UNDERWAY INVOLVING INDIVIDUAL FAMILY HOMES, or an individual apartment unit where an individual already resides, with a construction crew of 5 or fewer individuals. This includes additions to single-family homes such as solar panels;
- PROJECTS ALREADY UNDERWAY INVOLVING A RESIDENTIAL UNIT FOR WHICH A TENANT OR BUYER HAS ALREADY ENTERED INTO A LEGALLY BINDING AGREEMENT TO OCCUPY THE UNIT BY A CERTAIN DATE, AND CONSTRUCTION IS NECESSARY TO ENSURE THE UNIT’S AVAILABILITY BY THAT DATE;
- Projects involving facilities at which any one or more of the following takes place: the manufacture, distribution, storage, or servicing of goods or products that are sold by online retail businesses or essential retail businesses, as defined by Executive Order No. 107 (2020) and subsequent Administrative Orders adopted pursuant to that Order;
- Projects involving data centers or facilities that are critical to a business’s ability to function;
- Projects necessary for the delivery of essential social services, including homeless shelters;
- Any projects necessary to support law enforcement agencies or first responder units in their response to the COVID-19 emergency;
- Any project that is ordered or contracted for by Federal, State, county, or municipal government, or any project that must be completed to meet a deadline established by the Federal government;
- Any work on a NON-ESSENTIAL CONSTRUCTION project that is required to PHYSICALLY SECURE THE SITE OF THE PROJECT, ENSURE THE STRUCTURAL INTEGRITY OF ANY BUILDINGS ON THE SITE, ABATE ANY HAZARDS THAT WOULD EXIST ON THE SITE IF THE CONSTRUCTION WERE TO REMAIN IN ITS CURRENT CONDITION, REMEDIATE A SITE, OR OTHERWISE ENSURE THAT THE SITE AND ANY BUILDING THEREIN ARE APPROPRIATELY PROTECTED AND SAFE DURING THE SUSPENSION OF THE PROJECT; AND
- ANY EMERGENCY REPAIRS NECESSARY TO ENSURE THE HEALTH AND SAFETY OF RESIDENTS.
NEW RULES OF BEHAVIOR FOR MANUFACTURING, WAREHOUSING
AND ESSENTIAL CONSTRUCTION OPERATIONS
EO 122 further provides a series of rules of behavior for permitted manufacturing, warehousing and essential construction operations. This includes prohibiting non-essential visitors, limiting worksite groups TO NO MORE THAN TEN PEOPLE, maintaining six-foot separations, and staggering work hours, breaks and access to bathroom facilities. The order requires all such workers and visitors to wear “cloth face coverings” and protective gloves, supplied at the business’ expense. The business must decline entry to anyone who refuses to wear a face covering (except where doing so would inhibit the individual’s health or where the individual is under two years old). Additionally, each business must implement infection control practices, such as regular hand washing and the promotion of proper sneezing etiquette; limiting the sharing of tools and machinery, providing sanitizing materials such as wipes and hand sanitizer, and requiring sanitation of high touch areas such as breakrooms.
Additionally, the Executive Order institutes requirements for sending workers home who appear to have COVID-19 symptoms, along with notification requirements, decontamination of the work site and otherwise following OSHA requirements.
RULES OF BEHAVIOR FOR ESSENTIAL RETAIL BUSINESS
EO 122 further establishes rules of behavior for permitted Essential Retail Businesses as follows:
- Limit occupancy at 50% of the stated maximum store capacity, if applicable, at one time;
- Establish hours of operation, wherever possible, that permit access solely to high-risk individuals, as defined by the CDC;
- Install a physical barrier, such as a shield guard, between customers and cashiers/baggers wherever feasible or otherwise ensure six feet of distance between those individuals, except at the moment of payment and/or exchange of goods;
- Require infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal;
- Provide employees break time for repeated handwashing throughout workday;
- Arrange for contactless pay options, pickup, and/or delivery of goods wherever feasible. Such policies shall, wherever possible, consider populations that do no have access to internet service;
- Provide sanitization materials, such as hand sanitizer and sanitizing wipes, to staff and customers;
- Require frequent sanitization of hi-touch areas like restrooms, credit card machines, keypads, counters and shopping carts;
- Place conspicuous signage at entrances and throughout the store if applicable, alerting staff and customers to the required six feet of physical distance;
- Demarcate six feet of spacing in check-out lines to demonstrate appropriate spacing for social distancing; and
- Require workers and customers to wear cloth face coverings while on the premises, except where doing so would inhibit the individual’s health or where the individual is under two years of age, and require workers to wear gloves when in contact with customers or goods.
- Businesses must provide, at their expense, such face coverings and gloves for their employees. If a customer refuses to wear a cloth face covering for non-medical reasons and if such covering cannot be provided to the individual by the business at the point of entry, then the business must decline entry to the individual, unless the business is providing medication, medical supplies, or food, in which case the business policy should provide alternate methods of pickup and/or delivery of such goods. Nothing in the state policy should prevent workers or customers from wearing a surgical-grade mask or other more protective face covering if the individual is already in possession of such equipment, or if the business is otherwise required to provide such workers with more protective equipment due to the nature of the work involved. Where an individual declines to wear a face covering on store premises due to a medical condition that inhibits such usage, neither the essential retail business nor its staff shall require the individual to produce medical documentation verifying the stated condition.
“CATCH ALL” RULES OF BEHAVIOR
EO 122 provides a final provision applicable to all authorized businesses and “owners of buildings used for commercial, industrial or other enterprises, including but not limited to facilities for warehousing, manufacturing, commercial offices, airports, grocery stores, universities, colleges, government, hotels, and resident buildings with at least 50 units.
This provision requires cleaning and disinfecting high touch areas routinely and in compliance with CDC recommendations.
EO 122 has further tightened commercial activity in general and the construction industry in particular. The construction ban will lead to more unemployment and stop most construction projects in limbo.
The Executive Order now mandates the use of facial coverings and other sanitation rules in both retail and non-retail settings.
The Order remains in effect until further notice.