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NYS COVID-19 Capital Costs Tax Credit Program

The COVID-19 Capital Costs Credit Program offers relief to New York State based small businesses that were burdened with different operational costs that stemmed from the COVID-19 pandemic. These costs can range from structural changes and building upgrades to health-related supplies and materials. This program offers relief to businesses that experienced economic burden which stemmed from the pandemic. Qualified small businesses can receive a tax credit of 50% of qualifying expenses up to $50,000 for a maximum credit of $25,000.

New York small businesses with less than 100 employees, gross receipts of less than $2.5 million or a small business that incurred at least $2,000 of qualifying expenses between January 1, 2021, and December 31, 2022, may qualify for this Capital Costs Credit Program.

Qualifying expenses include costs incurred for the following categories of items:

  • 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

There is a multi-step application process to qualify for this program. First, follow this link, to determine if your business qualifies for the program. If your business qualifies, you will be emailed a link to the application for completing and submitting along with documentation to show proof of expenses. Expenses must be submitted in a manner that is still TBD at this moment. However, the expenses must be incurred between January 1, 2021 and December 31, 2022, and paid for on or before March 31, 2023.

If you wish to discuss future tax planning strategies for your business or are a client and wish to discuss eligibility for this program, or other COVID relief programs, please feel free to contact us.

Source: https://esd.ny.gov/covid-19-capital-costs-tax-credit, 6/29/2022

(c) 2022

The materials contained herein are intended for educational and informational purposes only and do not constitute tax or legal advice. Readers are responsible for obtaining such advice from their own tax and legal counsel. IRS Circular 230 disclosure: Any information contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction(s) or tax-related matter(s) that may be addressed herein.

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