Day: July 27, 2022

The State of Charter Schools in New York

Charter schools are an alternative to public schools. They are paid for with taxpayer dollars, but are privately run and not subject to the rules of the local school district. Advocates assert these schools fill gaps and provide opportunities that would otherwise be unavailable, especially for our most disadvantaged populations. Critics maintain they take money away from public school students’ education and benefit from it.

There are over 350 charter schools operating in New York State alone, with greater freedom to tailor learning to better meet the needs of their students. A closer look shows they also promote diversity, inclusion, and equity in education. Take New York City as an example. The NYS Department of Education reported that for the 2020-2021 school year, 50% of students in the charter school system identified as Black; 40% identified as Latinx; 79% were economically challenged; 9.3% lived in temporary housing; and 8% were multilingual. (Beer, Song. New York City charter schools continue to emerge as an inclusive new opportunity. AMny.com)

Still, differing opinions about charter schools are reflected in a number of conflicting actions being taken at local, state, and federal levels.

In New York City, advocates are rallying to have charters reissued for schools previously closed and to make charter school seats available to more children. Thanks to Bloomberg Philanthropies, charter schools could apply for a portion of the $50 million in grants made available for elementary school children to attend school this summer and make-up for educational gaps created during COVID. What’s more, the 2023 state budget increases per-pupil funding at New York City charter schools by 4.7% to promote innovation, the recruitment of high quality teachers, and give families and students options.

At the federal level, there are new rules governing the Charter Program, including decreased funding and more transparency requirements to obtain grants (Strauss, Valerie. What the Biden Administration’s new rules for charter schools say. TheWashingtonPost.com). In addition, as reported by EducationWeek, “Incoming charter schools will have to gather community input and prove they aren’t managed by a for-profit company to receive federal funding under the Biden administration’s finalized Charter School Program rules.”

No doubt, there is more to come. Regardless of which side you stand on the charter school debate, we want you to know RBT CPAs is here to help all schools – public, private, and charter – uphold their financial disclosure requirements, as well as accounting, tax, and audit accountabilities. Find out what we can do for your school or school district – give us a call today.

New York State Unemployment Interest Assessment Surcharge: What Businesses Need to Know

Starting this month, don’t be surprised if you receive a bill for an Interest Assessment Surcharge (IAS) from the government. It’s for interest New York State owes the federal government on loans it took out to maintain unemployment and pandemic benefits between March 2020 and September 2021 for COVID-related programs.

New York’s Unemployment Insurance Trust Fund loan amounted to $9.2 billion. The Department of Labor (DOL) has already paid back 11% or more than $1 billion and is working with state leaders to aggressively reduce the principal balance. State law requires employers who make unemployment insurance contributions to pay the IAS on the federal loan annually, until all interest has been paid off.

Notifications about the surcharge started going out to employers, with information about the IAS rate (.23%), the annual charge for 2022 (about $27.60 per employee), and how to pay. Payment must be made within 30 days of date of the notice (and by September 30, 2022 at the latest).

If you have an account on NYS Online, you can find your payment amount on NYS-45, line 6: “UI Previously underpaid with interest.” If payment is not made when e-filing your 2^nd quarter 2022 NYS-45, make a check payable to NYS Unemployment Insurance. We recommend noting your NYS Unemployment Insurance Employer Number and “IAS” on the memo line. Then mail it to:

NYS Unemployment Insurance
P.O. Box 4301
Binghamton, NY 13902-4301

For more details and information, visit the New York State DOL website’s IAS page. If you have questions, call the NYS DOL’s Employer Hotline at 1-888-899-8810 (select One for Main Menu, and then One for Employer Accounts Adjustment Section of the Unemployment Insurance Division).

As always, you can reach out to your person at RBT CPAs, LLP/Sickler, Torchia, Allen & Churchill CPAs, P.C. if you need any additional assistance with this or other accounting, tax, and auditing matters.

Reporting for Certain DB & DC Benefit Plans Is Changing

If you sponsor a defined benefit plan and/or defined contribution multi-employer plan, take note! There are a few updates to Form 5500 effective for 2022 plan year reporting (Source: Mercer.com; “Latest Form 5500 Updates”).

Form 5500 is used to report about a plan’s qualification, financial condition, investments, and operation. All defined benefit and defined contribution plan sponsors are required to submit a Form 5500 to the IRS and Department of Labor each year.

If you sponsor your own defined benefit plan (referred to as a single-employer defined benefit plan), actuarial information required is changing. First, any plan insured by the Pension Benefit Guaranty Corporation (PBGC) that has at least 1,000 participants must provide 50 years of projected benefits for active, terminated vested and in-pay status – this must be reported in a separate attachment to line 26. Second, plans must report if you elected the 15-year shortfall amortization relief under the American Rescue Plan of 2021.

For multi-employer defined benefit plans, there are changes to Schedule MB and certain existing requirements.

Plans that attach reporting withdrawal liability amounts that are part of employer contributions must identify which amounts are periodic and which are lump sum payments.
For interest rates, plans must report the rate used for employer withdrawal liability assessment or attach a description of the interest rate assumption.
PBGC-covered plans with at least 500 participants will need to project benefits for a 50-year period for active, terminated vested and in-pay participants; they will also have to provide a 10-year projection of employer contributions and withdrawal liability payments.
PBGC-covered plans with at least 1,000 active participants must provide average accrued monthly benefits in an age/service scatter.
In Retirement Plan Information Schedule R, plans must include the 10 participating employers contributing the highest amounts.

For both single and multi-employer plans, reporting can be in the form of a spreadsheet for 50-year expected benefit payment projects and age/service scatter of active participants. The same applies to withdrawal liability amounts and projected employer contributions and withdrawal liability (Schedule MB only).

When it comes to defined contribution multi-employer plans (MEPs), including pooled employer plans (PEPs), there are a couple of changes to Form 5500 and Form 5500-SF instructions, including new plan characteristic codes to identify the type of DC MEP and clarification about who to name as plan sponsor and administrator.

The changes apply to filings for plan years starting January 1, 2022 or later. 2022 plan year filings are generally due seven months after the end of the plan year. So, the 2022 filing must occur by July 31, 2023 for plans that run on a calendar year. (You can file for a 2 ½ month extension with Form 5558.)

Additional changes are expected in the future. For now, if you have any questions or need assistance gathering information for your Form 5500 or Form 5500-SF, let us know. Click here to get in touch with RBT CPAs.

Note: Form 5500 changes are governed by final rules issued by the Internal Revenue Service, Employee Benefits Security Administration, and the Pension Benefit Guaranty Corporation. If there are any conflicts between the information in this article and the official final rules, the official final rules govern.