5/4/2023 UPDATE: With the passing of the 2023-2024 New York State budget, eligible taxpayers will now be able to apply for the COVID-19 Capital Costs Tax Credit Program through September 30, 2023.
10/18/2022: Small businesses in New York State may be eligible to apply for tax credits to help address additional operational costs incurred as a result of the COVID-19 pandemic. With the COVID-19 Capital Costs Tax Credit Program, small business owners may receive a credit of up to 50% of qualified expenses, including the costs of disinfecting supplies, materials that block the spread of COVID-19, machinery and equipment to accommodate contactless sales and more. Applicants can receive a maximum of $25,000 based on qualified expenses up to $50,000. Here are the key highlights of the program, including eligibility and qualifying expenses:
Businesses must be owned and operated in New York state with 100 employees or less and gross receipts of less than $2.5 million to qualify for the program. The business must also have incurred at least $2,000 of qualifying expenses between January 1, 2021 and December 21, 2022. Qualifying expenses include costs of:
- supplies to disinfect and/or protect against COVID-19 transmission;
- restocking of perishable goods to replace those lost during the COVID-19 pandemic;
- physical barriers and sneeze guards;
- hand sanitizer stations;
- respiratory devices such as air purifier systems installed at the business entity’s location;
- signage related to the COVID-19 pandemic including, but not limited to, signage detailing vaccine and masking requirements, and social distancing;
- materials required to define and/or protect space such as barriers;
- materials needed to block off certain seats to allow for social distancing;
- certain point of sale payment equipment to allow for contactless payment;
- equipment and/or materials and supplies for new product lines in response to the COVID-19 pandemic;
- software for online payment platforms to enable delivery or contactless purchases;
- building construction and retrofits to accommodate social distancing and installation of air purifying equipment but not for costs for non-COVID-19 pandemic related capital renovations or general “closed for renovations” upgrades;
- machinery and equipment to accommodate contactless sales;
- materials to accommodate increased outdoor activity such as heat lamps, outdoor lighting, and materials related to outdoor space expansions; and
- other costs as determined by the department to be eligible under this section; provided, however, that “qualified COVID-19 capital costs” do not include any cost paid for with other COVID-19 grant funds as determined by the Commissioner
It’s important to note that you are still eligible to participate in this program even if you received other Federal or State assistance, including a Payroll Protection Program (PPP) loan, a New York Forward loan or a COVID-19 Pandemic Small Business Recovery grant. However, if your business received assistance from the COVID-19 Pandemic Small Business Recovery grant and you used the grant to pay for certain COVID-19 expenses, those expenses would not qualify for the COVID-19 Capital Costs Tax Credit Program.
Taxpayer Next Steps
Applications are now being accepted for those that have successfully completed the pre-screening process. To claim a tax credit for their 2022 tax return, taxpayers must first apply to receive a tax credit certificate from Empire State Development on or before December 31, 2022. Tax credits issued on or after January 1, 2023 can be claimed on a business’ 2023 tax return. Taxpayers can apply for the program through March 31, 2023. Credits will be awarded on a first come, first serve basis until program funds are depleted. Taxpayers can learn more about the program through the New York State Empire State Development webpage.