Small businesses with 100 or fewer employees may receive tax credits for costs incurred to increase COVID-19 safety
√ Screening tool available here
Gov. Kathy Hochul recently announced the opening of the initial intake tool to help small businesses determine their eligibility for the COVID-19 Capital Costs Tax Credit. The $250 million 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," 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 Gov. Hochul's support and also for all of New York's business owners who are working every day to rebuild our economy."
Announced as part of 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; and
√ Machinery and equipment to facilitate contactless sales.
Tax credits will cover 50% 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-served 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 Jan. 1, 2021, and Dec. 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 Jan. 1 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 Dec. 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 Jan. 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.
New York State Sen. 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."