New York Jobs Tax Credits & State Employment Incentives

Written by Frances Kim. Updated Oct 22, 2015.

State_Employment_Incentives_Spotlight_New_York_Jobs_Tax_Credits.jpgThe State of New York enacted a handful of new jobs tax credits, most of which were effective January 1, 2014 or January 1, 2015. These state employment incentives were enacted to attract new investment and job growth in the state.

Hire A Veteran Credit

 

Effective for tax years beginning on or after January 1, 2015, taxpayers that hire a qualified veteran who begins his or her employment on or after January 1, 2014, but before January 1, 2016, is entitled to a non-refundable tax credit against taxes imposed by Article 9-A, Article 32 and Article 33 of the Tax Law (franchise taxes). Eligibility Requirements:

  • Qualified veterans must be employed in the state for one year or more and must average at least 35 hours a week.
  • A qualified veteran is one who served on active duty in the U.S. military, coast guard, reserves, National Guard, NY guard or naval militia, and who was released from active duty by general or honorable discharge after 9/1/01.
  • The qualified veteran must certify by penalty of perjury that he or she has not been employed for 35 or more hours within 180 days immediately prior to employment with the taxpayer.
  • A qualified disabled veteran must meet the above criteria in addition to being certified by the U.S. Department of Veteran Affairs or military department as an individual entitled to receive disability payments.

Tax Benefit:

Tax_Benefit_-_Veteran.png

Minimum Wage Reimbursement Credit

Qualifying taxpayers employing students in New York State may be entitled to a refundable credit based on the total number of hours worked during the tax year for which they are paid the New York minimum wage and the applicable tax credit rate.

Eligibility Requirements:

  • An eligible employer is considered a corporation (including NY S Corp), a sole proprietorship, an LLC or a partnership.
  • An eligible employee is (1) employed by an eligible employer in NY; (2) paid at the minimum wage rate as defined in Article 19 of the labor law at any point during the tax year; (3) is between the ages of 16 and 19 during the time he or she is paid minimum wage; and (4) is a student during the time he or she is paid minimum wage by the eligible employer.
  • A student must be currently enrolled in an eligible educational institution on a full-time or part-time basis.

Tax Benefit:

The tax credit is equal to the total number of hours worked by eligible employees during the taxable year for which they’re paid the New York minimum wage, multiplied by the applicable tax credit rate for that year, as follows:

Tax_Benefit_-_Tax_Years.png

START-UP NY Program

To help bolster entrepreneurialism and job creation, the START-UP NY program creates multiple tax-free zones to attract and grow new businesses. Companies will be eligible to enter into the program until December 31, 2020.

Eligibility Requirements:

Businesses must create and maintain net new jobs, be a new start-up company, be a company from out of state that is relocating to NY or be an existing company in NY that is expanding and creating net new jobs.

A business may not be a retail/wholesale business, a restaurant or in hospitality, a professional practice (e.g. medical practice or law firm), in energy production or a distribution company.

The program is open to all two- and four-year non-profit educational institutions chartered in NY. Certain NY start-ups developed from NY incubators will be eligible to enter tax-free communities and receive benefits under the program.

Tax Benefit:

Qualified businesses and their qualified employees are eligible for exemptions from all NY taxes (income tax, state or local taxes, sales tax, property tax, franchise tax, etc.) for 10 years.

Specific exemptions include:

  • Metropolitan commuter transportation mobility tax
  • Organization tax and license and maintenance fees
  • Real estate transfer tax, exemption for leases
  • Sales tax, credit or refund
  • Tax Elimination Credit, corporation and income tax
  • Telecommunication Services Excise Tax Credit

Urban Youth Jobs Tax Credit

Formerly known as the New York Youth Works Tax Credit, this program was recently extended and expanded by the state (under Part DD of Chapter 59 of the Laws of 2013). This is a refundable credit made available to qualified employers who hire qualified employees between the ages of 16 and 24.

Eligibility Requirements:

Qualified employers must be:

  • Compliant with state and federal laws/regulations
  • Located within reasonable commuting distance for eligible youth residing in the target areas
  • Filling job openings that are (1) considered in demand; (2) in a regional growth sector and considered a priority by the area’s Regional Economic Development Council (e.g. healthcare, manufacturing, clean energy); (3) in a job sector considered a priority by the area’s Regional
  • Economic Development Council
  • Certified to participate in the program

Qualified employees must be:

  • Between the ages of 16 and 24 who live in the following areas: the cities of New York, Buffalo,
  • Rochester, Syracuse, New Rochelle, Mount Vernon, Yonkers, Schenectady, Albany and Utica in addition to the towns of Hempstead and Brookhaven
  • Deemed low income or at-risk
    Employed between January 1 and December 31 of the program year
  • Certified by the Department of Labor

Tax Benefit:

Tax_Benefit_-_Employee.png

Navigating New York Jobs Tax Credit Programs

While there are a variety of NY state employment incentives to consider, each one features its own set of complex eligibility requirements and program administrative details. That’s why it is recommended you contact an outsourced tax consultant who is well-versed in New York state employment incentives. 

A tax expert guides you through the program details and develops a solid plan for capturing the tax incentives, from meeting eligibility requirements to accurately filing applications.

Learn more about your New York-based business's ability to qualify for state employment incenties.

Download Free Guide 

Topics: Employment Incentives

Frances Kim

Written by Frances Kim

As one of the first CTI employees, Frances has held many key positions and has played an integral role in our diversification process. With more than 10 years in customer service and management, Frances’ proven adaptability has enabled her to manage projects for clients ranging from small start-ups to Fortune 500 companies.