Paid Sick Leave Comes to New Jersey

New Jersey Workers Will Be Entitled to Paid-Sick Leave:
What Employers and Employees Need to Know

The New Jersey Paid-Sick-Leave Act (“the Act”) recently went into effect on October 29, 2018. The Act will require New Jersey employers of all sizes and business entity types to provide their covered employees (part-time and full-time) up to 40 hours of paid sick leave per year. As a result, there are many changes employers need to be aware of, and these changes should be implemented right away.

The Act requires an employer to accrue sick time leave as it is earned or to front load the full 40 hours in the beginning of the year.

If an employer does not front load the 40 hours of sick leave in the beginning of the year, this sick leave will accrue at the rate of one hour for every 30 hours worked. Additionally, employees will have the ability
to carry over a maximum of 40 hours of sick time into the following year.

In order to properly administer paid-sick-leave, both employers and employees must understand
how sick leave can be used. It is important that an employer knows and exercises the various parameters and guidelines of the new law to ensure the proper procedures are followed. For example, the employer must provide all employees with a written copy of their rights.

Employers should understand what rules govern carryover and payout, in what increments can employees use sick leave, what happens to accrued sick leave upon transfer, separation or reinstatement of an employee, and what notice, documentation, and record keeping rules are required. Employers should also know about the impact of local paid-sick-leave laws and how the new law will be enforced. Employers can be held liable for improper use of sick leave if the guidelines are not properly adhered to.

These changes that face businesses and individuals can be a large impact on day to day operations. Our team of experienced professionals and advisors at Gramkow Carnevale Seifert & Co., LLC can be a valuable asset to guide both employers and employees through these changes in the state of New Jersey by helping you understand and implement the New Jersey Paid-Sick-Leave Act.

Did You Know?

Gramkow, Carnevale, Seifert, & Co., LLC (GCS) recently launched a brand new website. The website is a great resource for questions regarding services we provide, contact information, and other pertinent information.

You can visit our new and updated website at: https://www.gcs-cpa.com

 

Year End Planning – Last Chance to Unwind IRA-to-Roth IRA Conversions

Sometimes we take risks and make financial decisions anticipating stability or changes in economic factors impacting the outcome of our decisions. Taxpayers who made a regular-IRA-to-Roth-IRA conversion in 2017 may regret their decision due to factors such as market declines. Fortunately, such taxpayers may recharacterize (unwind) their conversions, but they must act no later than October 15, 2018. We have experienced professionals at Gramkow, Carnevale & Seifert & Co., LLC who understand the opportunities and challenges when converting or recharacterizing contributions to a Roth IRA.

Taxpayers who believe Roth IRAs are a better choice for them than regular IRAs may convert funds from regular IRAs to Roth IRAs within 60 days of the distribution. Additionally, a distribution from a qualified retirement plan can be contributed to a Roth IRA through a direct rollover or received by the distributee and contributed (rolled over) to a Roth IRA within 60 days.

Unlike the usual IRA rollover, however, a switch from regular IRA or qualified plan to Roth IRA is not income-tax-free. Rather, it is subject to tax as if it were distributed from the regular IRA or qualified plan and not recontributed to another IRA. It generally isn’t subject to the 10% premature distribution tax.

Many taxpayers who made a 2017 regular-IRA-to-Roth-IRA conversion may find the move was not to their advantage. An example may be because the Roth IRA account has declined in value because of a stock market slump or because the effective income tax rate on the conversion was higher in 2017 than it would otherwise be in 2018 (as a result of new tax law lower income tax rates).

Taxpayers in this situation, may unwind the 2017 transaction by recharacterizing the regular-IRA-to-Roth-IRA conversion no later than October 15, 2018. This involves transferring the converted amount (plus earnings, or minus losses) from the Roth IRA back to a regular IRA via a trustee-to-trustee transfer.

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In addition to a very small window to act upon, there are many complicated factors that need to be considered in making a 2017 recharacterization, including the timing, the age of the taxpayer, considerations of reconverting in 2018 and the time frame for reconverting in 2018, not to mention the reporting aspects of a recharacterization. We have experienced tax professionals and financial planners who understand the multiple aspects of the Roth recharacterization decision and the various planning opportunities that come with it. Please contact us to discuss this issue or any other issues as we look to offer solutions designed to help meet your financial needs.

Did You Know?

Gramkow, Carnevale, Seifert, & Co., LLC has received the Inside Public Accounting’s Best of the Best Firms recognition for seven years.

 

Planning for Chronically or Terminally Ill Clients

As we age, some of us may experience significant changes in health resulting in chronic or terminal illness. The life transition from relatively good health to poor health comes with sudden and increased medical costs. Understanding the nature of these medical costs and how they will be paid is a good start but only part of this life transition process. Establishing a “short term financial needs plan” for medical costs can help minimize anxiety about covering health care costs. We have several years of experience advising aging clients on how to properly plan and manage health care costs, bringing clients and their families great peace of mind.

We begin by advising and helping clients establish a care budget. This is a simple budget focusing on the short term (6 to 24 months) following initial diagnosis, identifying the estimated costs of care for serious illness. A care balance sheet is also prepared, identifying all assets and potential sources of tax-free cash that can be used to finance estimated health care costs. Identifying care-related medical expenses is the most important step in the process. We can help you identify and categorize all out of pocket health care costs.

The care budget not only to serves to identify surplus or deficits and sources of cash flow available for anticipated health care costs but also serves to track health care coverage and related changing costs as a result of transitioning from one type of coverage to another. It also records key election dates the client needs to meet.

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Being diagnosed with a chronic or terminal illness is a life changing event. We understand when this situation occurs the client and his or her family are often emotionally overwhelmed and as a result have difficulty focusing on the process of managing their health care costs. We have experienced professionals in establishing short term financial needs plans to help clients through this process that will alleviate the fear, uncertainty and anxiety clients and their families face when initially diagnosed with a chronic or terminal illness. Please contact us to discuss this, or any other issue that has occurred.

Did You Know?

You can securely upload and download confidential documents through our secure file transfer portal.  This portal can also be used to easily access your tax filings at any time.

If you would like a portal set up for your individual or business needs, please contact GCS at your earliest convenience.

New Jersey Tax Amnesty

Governor Phil Murphy has signed legislation that requires the Division of Taxation to conduct a tax amnesty during a period that will last no longer than 90 days and end no later than January 15, 2019. The start date of the tax amnesty program has not yet been determined.

A taxpayer who has failed to pay any state tax on or before the day on which the tax is required to be paid may pay to the Division on or before the last day of the period established by the Division, the amount of that tax and one-half of the balance of interest that is due as of November 1, 2018, but without the remaining one-half of the balance of interest that is due as of November 1, 2018 and without any late payment penalty, late filing penalty, cost of collection, delinquency penalty or recovery fee that may otherwise be due. The taxpayer will be required to pay any civil fraud or criminal penalty arising out of an obligation imposed under any state tax law.

The amnesty program applies only to state tax liabilities for tax returns due on or after February 1, 2009 and prior to September 1, 2017. The taxes that qualify under the amnesty program include unassessed amounts as well as amounts under audit or being contested with the Division of Taxation, and all state taxes administered by the Division of Taxation matter (not including unemployment type taxes administered by the Department of Labor).

The amnesty is not available to a taxpayer who has been notified by the Office of Criminal Investigation in the Division of Taxation that he or she is under criminal investigation for a state tax

In summary, all New Jersey businesses with non-compliance issues should consider this amnesty program, as there is a 5% penalty, which is not subject to waiver or abatement, in addition to all other penalties, interest, or costs of collection otherwise authorized by law, upon any state tax liabilities eligible to be satisfied during the period established that are not satisfied during the amnesty period.

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This is an excellent opportunity to clear any past due tax liabilities, with no penalty assessment and reduced interest costs. We have experienced professionals dealing with IRS and state amnesty programs who can assess liability exposure for non-compliance, identify options and determine the proper course of action. We understand the importance of ensuring tax returns submitted for amnesty are prepared completely, accurately and filed timely to ensure the full benefits of tax amnesty are realized. Please contact us to discuss this, or any other issue.