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Small Business Firms May Be Eligible to Receive a $25,000 Tax Credit for Covid Costs

During the pandemic in 2021, many businesses had to make some unexpected purchases to help slow the spread of COVID-19 within their company. These purchases included things like masks cleaning supplies, and outdoor seating, among other expenses aimed at reducing the virus’ spread. Gov. Kathy Hochul announced that small businesses could receive a state tax credit of up to $25,000 as reimbursement for such expenses.

Capital Costs Tax Credit Program

This new program is limited to businesses in New York State that have 100 or fewer employees, accrued $2.5 million or less in 2021 gross receipts, and had at least $2,000 in eligible COVID-related purchases between 2021 and Dec. 31, 2022, according to the governor. These small business owners can find out if they’re eligible for the COVID-19 Capital Costs Tax Credit program by answering questions via “a screening tool” that can be found here. If the tool finds the business eligible for the refundable tax credit, then an application link will be provided once the process begins.

“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. This tax credit program was established in the 2022-2023 state budget and was funded with $250 million. According to state officials, the money will be provided on a first-come, first-serve basis until the funding is exhausted.

However, any businesses that used state COVID grant money to buy personal protection equipment, disinfectant, machinery, and other goods in 2021-2022, won’t be eligible for the tax credit, according to state officials.

Wrap Up

New York State recognizes the hardships a lot of small businesses may have been facing during the COVID-19 pandemic, and is taking measures to help bring relief to these businesses that are so essential and beneficial to the state. This is a step in the right direction to getting some struggling businesses back on track.

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