Small Businesses with 100 or Fewer Employees May Receive Tax Credits for Costs Incurred to Increase COVID-19 Safety
Screening Tool Available Here
Governor Kathy Hochul today announced the opening of the initial intake tool to help small businesses determine their eligibility for the COVID-19 Capital Costs Tax Credit Program. The $250 million COVID-19 Capital Costs Tax Credit Program will support small businesses that made investments to comply with emergency orders and regulations or to increase public safety in response to COVID-19. If deemed eligible by the screening tool, a link to the application will be provided when the program application opens.
"The pandemic has hit New York's small businesses especially hard, forcing many to close and others to incur significant financial burdens to protect their employees and customers from COVID-19," Governor Hochul said. "Small Businesses are the backbone of our state's economy, and in order to truly recover from the COVID-19 crisis, we must lend a helping hand. This tax credit will be a crucial lifeline to New York businesses and I encourage all who are interested to apply for this much-needed aid."
Empire State Development President, CEO and Commissioner Hope Knight said, "Businesses have been burdened with many expenses during the pandemic that were necessary to keep their employees and customers safe. This tax credit will ease the burden that the business community incurred during COVID and help it continue to get steadily back on its feet. I am grateful for Governor Hochul's support and also for all of New York's business owners who are working every day to rebuild our economy."
Small businesses were hit particularly hard by the pandemic downturn. Announced as part of Governor Hochul's Executive Budget to continue the State's support for small businesses, this new refundable tax relief program targets COVID-19-related expenses. Eligible COVID-19-related costs include, but are not limited to:
- Supplies to disinfect or protect against COVID-19 transmission
- Costs associated with expanding, or defining space to accommodate social distancing
- HVAC equipment
- Expenses related to increased outdoor activity and outdoor space expansions
- Machinery and equipment to facilitate contactless sales
Tax credits will cover 50 percent of eligible costs, up to $50,000, for a maximum tax credit award of $25,000, and credits will be awarded on a first come first serve basis until program funds are depleted. Eligible businesses must operate a location in New York State, have 100 or fewer employees, $2.5 million or less of gross receipts in the 2021 tax year, and at least $2,000 in eligible costs between January 1, 2021 and December 31, 2022.
Businesses are still encouraged to apply for the New York State COVID-19 Pandemic Small Business Recovery Grant Program which provides flexible grants of $5,000 to $50,000 for small businesses for COVID-19 expenses. However costs incurred between January 1, 2021 and April 1, 2021 that were paid for with proceeds from this grant program are not eligible for a tax credit under the COVID-19 Capital Costs Tax Credit Program.
To receive a tax credit for their 2022 tax return, businesses must receive a tax credit certificate from ESD on or before December 31, 2022. Potential applicants are urged to complete the screening tool and apply as soon as the program is launched, as any tax credits issued on or after January 1, 2023 cannot be claimed until a business's 2023 tax return. For more detailed information visit the ESD website at esd.ny.gov/covid-19-capital-cost-tax-credit
State Senator Anna Kaplan said, "Small businesses had to incur significant expenses to reopen safely during the pandemic, and with those costs continuing to mount, they need our support more than ever. I was proud to sponsor the COVID-19 Capital Costs Tax Credit Program, which will help minimize the financial impacts incurred by small business owners to stay safe and stay open, and I encourage every small business owner to use the new screening tool to see if they're eligible to get relief through the program when it opens."
Assemblyman Al Stirpe said, "As the chair of the Assembly Small Business Committee, it has always been a priority of mine to aid local entrepreneurs in any way possible because I know the dedication required to keep the lights on. The addition of the Screening Tool to help expedite access to the vital funding provided by the $250 million COVID-19 Capital Costs Tax Credit Program will streamline a small business's eligibility. Let's get our businesses back on track, by aiding them with COVID-related capital investments of up to $25,000."
About Empire State Development
Empire State Development (ESD) is New York's chief economic development agency. The mission of ESD is to promote a vigorous and growing economy, encourage the creation of new job and economic opportunities, increase revenues to the State and its municipalities, and achieve stable and diversified local economies. Through the use of loans, grants, tax credits and other forms of financial assistance, ESD strives to enhance private business investment and growth to spur job creation and support prosperous communities across New York State. ESD is also the primary administrative agency overseeing the New York State Regional Economic Development Councils and the marketing of "I LOVE NY," the State's iconic tourism brand. For more information on Regional Councils and Empire State Development, please visit www.regionalcouncils.ny.gov and www.esd.ny.gov.
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