Small firms could get $25G state tax credit for COVID costs

Small businesses could receive a state tax credit of up to $25,000 as reimbursement for expenses that they incurred in 2021 and this year for masks, cleaning supplies, outdoor seating and other purchases aimed at reducing the coronavirus’ spread, Gov. Kathy Hochul announced.

Generally, the new program is limited to businesses in New York 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, 2022, according to Hochul.

Business owners can determine if they are eligible for the COVID-19 Capital Costs Tax Credit Program by answering questions via “a screening tool” at https://formrouter.apps.esd.ny.gov/ccs@ESD/covid_cost_screening.html.

If the screening tool finds that a business is eligible for the refundable state tax credit, then a link to the application will be provided once the application process starts.

“We are targeting early fall for the application portal to open,” said Kristin Devoe, a spokeswoman for Empire State Development, the state’s primary business-aid agency, on Tuesday.

ESD CEO Hope Knight added, “This tax credit will ease the burden that the business community incurred during COVID and help it to continue to get steadily back on its feet.”

The tax credit program was established in the 2022-23 state budget and funded with $250 million. Credits will be distributed on a first-come, first-serve basis until the money runs out, according to state officials.

State Sen. Anna Kaplan (D-Great Neck), chairwoman of the Senate's small business committee, 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."

The tax credit will cover up to half of eligible purchases that don't exceed $50,000. The maximum benefit is $25,000.

Businesses that used state COVID grant money to buy personal protection equipment, disinfectant, machinery and other goods in response to the pandemic in 2021-22 aren’t eligible for the tax credit, according to the officials.

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