When the COVID-19 pandemic hit New Jersey in March 2020, many businesses were forced to close for a time, causing unemployment claims to spike.  More than 2 million state residents have filed for unemployment since the start of the pandemic, and over $33B in state and federal benefits have been paid out.  As a result, the state’s Unemployment Trust Fund (UT Fund) has been severely depleted, and the state was forced to borrow from the federal government to keep paying claims.

The issue of proper worker classification continues to be an area of concern for both federal and state governments, primarily because when someone is misclassified as an independent contractor rather than an employee, the tax liabilities shift from the business to the individual. In addition, independent contractors are typically not entitled to the same benefits as employees, resulting in an overall lower cost. Thus, despite existing regulations, worker misclassification is a continuing concer

Have you made any large out-of-state purchases for yourself or your business this year? If so, you may have to pay New Jersey Use Tax. Use Tax applies when a purchase is made outside of New Jersey (be it online or via mail) for use in New Jersey and is taxed at the same rate as New Jersey sales tax: 6.625%.

In New Jersey, nonprofit organizations that reach a specific threshold of the gross revenue received must comply with certain reporting requirements, including the mandatory submission of an audit conducted by an independent certified public accountant.

The fallout from the COVID-19 pandemic created by forced business closures and other government orders continues to challenge New Jersey businesses. Despite the drop in new cases, partially due to vaccination efforts, many have just started the journey back to profitability.

This month, the Small Business Administration (SBA) issued a new Interim Final Rule changing the loan calculation formula for specific Payroll Protection Program (PPP) applicants. The sweeping changes apply to self-employed business owners, independent contractors, and sole proprietors, with or without employees.

The challenges arising from the COVID-19 pandemic have been difficult to manage for many New Jersey-area businesses. The hardest-hit industries include food service, hospitality, entertainment, and recreation, as demand has plummeted since the pandemic began.

The arrival of the COVID-19 pandemic last March sharply impacted both businesses and individuals as significant changes to everyday life were mandated to limit the virus’s spread. The combination of stay-at-home orders and forced business closures left many reeling from the almost overnight shifts. Given the magnitude of the situation, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide comprehensive economic relief.

Many business owners are perplexed by determining whether an individual is acting as an employee or independent contractor. The determination is challenging because there are often confusing federal and state guidelines and because it seems they change regularly. Many are surprised to learn that although an individual may appear to be working in an independent contractor’s role, they are considered an employee by the IRS and state law.

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (H.R. 133), which includes providing the second COVID-19-related relief to help individuals and businesses through the pandemic.