Must Share Info: Resuming Student Loans

January might feel far away, but it will be here before you know it (along with freezing temperatures and lots and lots of snow, sorry New Yorkers, you know the drill). Like winterizing your home or prepping for the change in seasons, millions of student loan borrowers have another addition to tack onto their winter to-do list before we hit the New Year. Overall, there are 2.7 million student loan borrowers in New York, with debt totaling $99.8 billion. New York borrowers carry an average balance of $35,638 each — though that’s 3% lower than the average borrower in the U.S. ($36,689). Below, you’ll find extremely important and time-sensitive student loan repayment reactivation information to pass along to student loan borrowers in your life before time runs out.

Student loan payments, interest accruals, and collections of defaulted federal student loans have all been on hold since the start of the pandemic — first thanks to the CARES Act, then due to extensions from former President Donald Trump, former Education Secretary Betsy DeVos, and President Biden. This August, the U.S. Department of Education announced a final extension of the student loan payment pause until Jan. 31, 2022.

So, how can borrowers prepare for repayments to resume?

Below are three steps to pass along to borrowers, so they can ensure they’re prepared for payments to resume:

  1. Update your contact information in your profile on your loan servicer’s website and in your profile.
  2. Check out Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
  3. Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your payments more affordable, depending on your income and family size.

A further note on repayment strategy – now is a good time for borrowers to reassess their future plans. Encourage borrowers to make sure they can afford the payments when they resume, and if not, dedicate time now to determining what repayment options may be available instead of waiting until January. It’s best to have a list of financial advisers, or certified student loan experts readily available to offer borrowers resources to provide assistance and direction. Also, make sure they know that once the payment suspension ends, they will receive a billing statement or other notice at least 21 days before the payment is due. Encourage them to contact their loan servicer online or by phone to find out what the payment amount will be when payments restart. Loan servicers are the most reliable source for official, up-to-date information about loans. Another helpful tip? The U.S. Department of Education wants to help borrowers learn how to avoid scams. Student loan borrowers should never accept unexpected offers of financial aid or help (such as a “pandemic grant” or “Biden loan forgiveness”) without checking with their school to see if the offer is legit.

The pandemic caused economic shockwaves across the nation, regardless of economic status, everyone surely felt some level of impact.

From family members losing jobs to falling ill, many entered saving mode due to extreme stress and uncertain financial times. Be sure to pass along compassion to borrowers you connect with and direct them to resources. The Federal Student Aid site provides the latest updates about coronavirus student loan relief and its impact on students, borrowers, and parents. For more information on student loan forgiveness legislation, visit the U.S. Department of Education’s website. Of course, our dedicated RBT professional team is also here to provide personalized guidance.

Sources: U.S. Department of Education, Student Loan Hero

Is Your Company Plan Up to DOL Speed?

Since COVID-19 entered our lives and disrupted our normal protocols, reassessing workplace safety has been on every employer’s mind, especially within hands-on industries like construction work. Below we’ll review a timeline of important statewide legal action that impacts you, your employees, and the future of your company.

In response to the pandemic, the New York Health and Essential Rights Act (NY HERO Act) was signed into law on May 5, 2021.

The HERO Act mandates extensive new workplace health and safety protections. The goal? To protect employees against exposure and disease during a future airborne infectious disease outbreak.

On September 6, 2021, Governor Kathy Hochul announced the designation of COVID-19 as an airborne infectious disease under the HERO Act.

This designation requires all employers to implement workplace safety plans. Under this new law, the New York State Department of Labor (NYS DOL), in consultation with the NYS Department of Health, has developed a new Airborne Infectious Disease Exposure Prevention Standard, a Model Airborne Infectious Disease Exposure Prevention Plan, and various industry-specific model plans for the prevention of airborne infectious disease.

On September 23, 2021, the DOL updated its Model Airborne Infectious Disease Exposure Prevention Plan.

The most notable change to the Model Plan is the loosening of face-covering requirements for employees in workplaces where all individuals on the premises are vaccinated. The Model Plan states that for workplaces where all individuals on the premises are fully vaccinated, appropriate face coverings are recommended, but not required, consistent with State Department of Health and the Centers for Disease Control and Prevention applicable guidance, as of September 16, 2021. The model plan also revised the language on physical distancing to read, “Physical distancing will be used, to the extent feasible, as advised by guidance from State Department of Health or the Centers for Disease Control and Prevention, as applicable.”

While you likely already have your plan established and distributed (or face hefty financial fines) employers should continue to review/update safety plans, and conduct employee training.

It’s also important to note that a second section of the HERO Act, effective November 1, 2021, allows employees to form a joint labor-management workplace safety committee.

The committee must be comprised of both employer and employee designees, with at least two-thirds nonsupervisory employees who are chosen by nonsupervisory employees. The Act authorizes committees to:

  • Raise health and safety concerns, to which employers must respond
  • Review health and safety policies enacted in response to laws, executive orders, or guidance
  • Participate in government workplace site visits
  • Review employer-filed reports related to workplace health and safety
  • Meet quarterly during working hours for up to two hours
  • Allow committee members to attend a training, not to exceed four hours, on occupational health and safety and the function of worker safety committees

THE DOL will likely publish future guidance on how to best communicate this information to employees. The DOL’s HERO Act web page provides links to model safety plans and other construction site-specific information. As a best practice, we advise all union employers to preemptively check their collective bargaining agreements to see if the safety committee requirements conflict, as the terms of the committees will most likely be subject to bargaining.

Thinking of not complying? Think again.

Employers may be subject to daily penalties between $50.00 and $10,000.00 for failure to comply with the NY HERO Act requirements. In summary, change and updates are the norm in the current climate we find ourselves in. Employers must be aware of changing rules and regulations as they pop up in real time. Additionally, as supply chain delays and material shortages persist through the fall and winter months, it’s a good idea to obtain and properly store personal protective equipment and other exposure controls in preparation for future infectious disease outbreaks. Don’t hesitate to act. This plan can be implemented with expert guidance. If you have question, please feel free to contact our dedicated RBT team who specialize in assisting construction client needs.

NYS Pass-Through Entity Tax

NYS Pass-Through Entity Tax

New York State individual owners of partnerships and S corporations have an opportunity to benefit from valuable tax deductions.

NYS has finally issued long awaited guidance with regards to the newly created Pass-Through Entity Tax (PTET). The PTET was enacted as part of the 2021-2022 fiscal year budget in April 2021, and it is effective for tax years beginning on or after January 1, 2021. Given the high real property taxes and high personal income tax rates in New York State, many individual taxpayers have felt the effects of the state and local tax deduction limitation that was part of the Tax Cuts and Jobs Act (TCJA) of 2017. NY’s PTET was put into place to hopefully provide some NY business owners with a new opportunity for federal tax savings around this current limitation.

The PTET works by shifting the burden of state income tax payments related to income passed through from partnerships and/or S corporations.

Rather than the individual shareholders/partners being responsible for paying the tax, the pass-through entities (PTEs) will pay the tax.  Partnerships and S corporations that pay the PTET are allowed a tax deduction against their ordinary business income without regard to the $10,000 SALT limitation. And if you haven’t been itemizing your deductions on your personal tax return because the standard deduction has been greater than your otherwise deductible expenses, the PTET provides for additional deductions that weren’t available to you previously.

Each year, NY partnerships and/or S corporations must make an annual election to participate in this program. The election is made online with the New York Department of Taxation and Finance through a business’ online services account. Once made, the entity is responsible for filing and paying all required tax returns and payments for that year; the election may not be revoked. Elections cannot be made by tax professionals, only by authorized individuals (partner, shareholder, etc.) of the business. The election for the 2021 tax year must be made by October 15, 2021. In subsequent years, the election was made by March 15th. To simplify the process for you and ensure you do not miss this extremely important deadline, our RBT professional team has created a shortcut on our website with step by step instructions on how to complete your PTET annual election.

Please click this link to follow the steps!

The calculations differ slightly based on entity type and residency status for partners in a partnership. S corporations will pay the PTET based on the entity’s NY sourced taxable income. Partnerships will pay the PTET based on all allocable taxable income for residents and only NY sourced taxable income for non-residents. The tax rate ranges from 6.85%, for PTE taxable income up to $2 million, up to the highest NYS marginal tax rate of 10.90%.

Estimated tax payments are not required if you elect into the program for the 2021 tax year, but quarterly estimates will be required in future years and will be due on the 15th days of March, June, September, and December. Cash basis taxpayers may consider making a payment before year-end to benefit from the tax deduction in 2021. If a personal taxpayer is subject to making personal estimated tax payments, they should continue to make those payments in 2021 to avoid assessment of penalties and interest.

The annual PTET return is due on March 15th, but taxpayers may request a six-month extension of time to file.

The annual return will report the PTE taxable income, total tax liability, and the direct share of PTET that is available to each owner as a tax credit. This PTET credit, equal to 100% of the tax paid, will be claimed by the owner on their personal New York tax return. Certain trust owners may also be eligible for to claim the PTET credit. Corporation and partnership owners are not eligible for PTET credits and therefore, PTET won’t be paid on their shares of the income.

Resident owners of a PTE may claim a resident tax credit on Form IT-112-R for the payment of another state’s PTET by their partnership or S corporation. For tax years prior to 2021, the resident tax credit was only allowed if the tax was assessed and paid by the resident individual.

The PTET has brought challenges and complexities with it. The silver lining is an opportunity for significant federal tax savings for NY business owners. Please contact our team of dedicated professionals if you’d like to discuss if and how this program can benefit you and your business.

Why NY Manufacturers Struggle to Recruit Women & How to Fix it

Despite modern progress, women are still struggling to break through the manufacturing sector’s glass ceiling.

According to the U.S. Bureau of Labor Statistics, 47% of the entire workforce and 52% of all professionals and managers are women, yet they represent less than 30% of manufacturing workers. New York manufacturers have a lot of room for improvement when it comes to women in leadership positions. A 2020 women in manufacturing study found Pennsylvania, Colorado, and Connecticut to have the highest percentage of women in leadership positions. New York ranks 10th.

The reality is manufacturing job openings currently outnumber qualified job applicants. From technicians, and machinists, to programmers and assemblers, as well as marketing, sales, finance, and even cybersecurity professionals, manufacturers are hiring. But are you doing your part to stay competitive and attract top talent? Your team needs to determine:

  • What steps your company can take to help bridge the current gender gap
  • Whether or not your company is financially competitive

The latest data from the U.S. Department of Commerce finds that on average, manufacturing workers earn 21% more than the median income for all workers, and women in manufacturing earn 16% more than the median income for all workers. Unfortunately, however, women in manufacturing still earn only 71% of the median income for men in manufacturing. Attracting and retaining more women for skilled positions in manufacturing means offering competitive, fair salaries, and other incentives. The following five best practices, generally advocated by the Manufacturing Institute, may help. We’ve also included some real examples of unique ways manufacturing companies around the country are promoting equal gender advancement, generated from the 2020 Women in Manufacturing study respondents:

Start at the top: Senior team members need to prioritize workplace diversity and communicate benefits to their teams. Some organizations have even tied executive incentives to diversity and inclusion goals. Progress should be monitored and communicated throughout the organization.

“We have a women’s resource group that was started in 2019 that promotes networking, STEM, and advancement of women in the manufacturing world.”

Prioritize flexibility: Women typically value flexible work options. Consider shifting from a presence-driven culture to one that is more results-oriented. Enable employees to balance their work and personal lives. Increasing flexibility can go a long way towards retaining skilled workers and ultimately trickles down to the bottom line.

Reassess the culture:  Gender discrimination — specifically the perception that men should be in charge — remains problematic in the manufacturing world. Address this bias through awareness training and other educational tools.

“Started men as diversity partners program to educate and share about unconscious bias and support/promote female colleagues.”

Become a sponsor: Corporate sponsorships help women succeed. Sponsors serve as mentors, coaches, and advocates. They can encourage an individual’s progress and provide a clear understanding of the leadership qualities and technical skills required for specific positions.

“[We have a] professional development program for women in manufacturing, designed to support women early in their manufacturing careers to encourage them to stay in manufacturing and/or within the company. The program provides a supportive environment for the women, and also supplies each woman with another female mentor within the company.”

Target your audience: When recruiting prospective employees, it’s important to zero in on specific groups. For example, your company might partner with vocational schools and K-12 schools that offer Science, Technology, Engineering and Math (STEM) programs. Incentivize your female employees to take an active role in the recruitment process or apprenticeship programs and to become role models for younger women that are hired.

“We have an Engineering Ladies Lunch and Learn (E3L) once a month to go over topics, training, [and] skills development for women at the company. This was developed by female engineers taking the initiative and it took a while for the leadership team to appreciate it.”

Contact your financial advisors to evaluate whether your company’s current compensation, training, and recruiting practices are gender inclusive. In addition to an array of financial reporting (Audit and Accounting Services) and tax compliance services (Tax Services), our RBT Manufacturing Group offers personalized, innovative strategies to help clients increase profitability. Contact us today to set up a consultation and develop strategies to become a more diverse workplace.

Sources: © 2020, Powered by Thomson Reuters Checkpoint, WiM