New York State taking applications from small firms for COVID-19 tax credit

New York State has begun taking applications from small businesses for a state tax credit of up to $25,000 as reimbursement for expenditures to protect employees and customers from the coronavirus.

Purchases of masks, hand sanitizer and other equipment are among the costs that firms can recoup through the COVID-19 Capital Costs Tax Credit Program. Up to $250 million in relief will be distributed on a first-come, first-served basis.

Small businesses must complete a pre-screening process to determine eligibility before filing an application. The screen tool may be found at https://formrouter.apps.esd.ny.gov/ccs@ESD/covid_cost_screening.html. Upon certification of eligibility, the firm will be sent a link to apply for the tax credit.

Applications will be accepted through March 31. But to claim the tax credit on a 2022 state income tax return, businesses must apply before Dec. 31. Tax credits issued after Jan. 1 may be claimed on the 2023 tax return.

“Through no fault of their own, small businesses across the state had to pay for many expenses during the pandemic that were necessary to keep their employees and customers safe — but not expected or budgeted,” said Hope Knight, CEO of Empire State Development, the state’s primary business-aid agency. ESD is overseeing the tax credit program.

She said the tax credit, established in the 2022-23 state budget, “will help ease the burden that the business community incurred during the pandemic.”

The tax credit is limited to businesses in the state that have 100 or fewer employees, $2.5 million or less in 2021 gross receipts and at least $2,000 in eligible COVID-related purchases between last year and Dec. 31. The purchases must be paid for by March 31.

The types of purchases that are reimbursable include masks, disinfectant, ventilation systems and equipment to accommodate social distancing, outdoor activities and contactless sales.

Businesses that used state COVID grant money to pay for such purchases in January-March 2021 aren’t eligible for the tax credit, the officials said.

More information is available at https://esd.ny.gov/covid-19-capital-costs-tax-credit.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.