New York’s Return-to-Work Tax Credit

The restaurant industry is one of the hardest hit by the COVID-19 Pandemic. Many have shut its door permanently while some are on the verge of survival.

To provide the financial boost and expedite rehiring efforts to the COVID-impacted restaurants, New York’s chief economic development agency, Empire State Development (ESD) offers $5,000 credit for each new worker hired, maximum credit up-to $50,000 to each eligible business for the credit. The program is open to eligible restaurants located in New York City, or in a designated Orange or Red Zone area outside of New York City for at least 30 consecutive days.

Eligible businesses are full-service and limited service food and beverage establishments in New York State that predominately support on-premises, in-person dining, such as:

• Full-service restaurants (i.e. waiter/waitress service)
• Limited-service restaurants – where patrons generally order food at a counter and pay before eating
• Bars, taverns, nightclubs, or other drinking places
• Certain breweries/wineries/cideries/distilleries/meaderies with a tasting room

Eligibility

• The program is mainly geared towards small independently owned and operated restaurants (excluding franchises) with less than 100 employees in New York City or designated Orange or a Red zone area outside of New York City for at least 30 consecutive days. Qualifying locations include New York City and certain areas of Chemung, Erie, Monroe, Onondaga, Rockland and Westchester Counties.
• All applicants must be able to support that they have incurred COVID-related losses of at least 40% in gross receipts or full-time equivalent employees.
• Applicants must hire least one full-time worker at the restaurant.

Documentation Requirements

Copies of the documents as indicated below must be uploaded at time of application. An application will not be considered complete and approved without all the necessary supporting documentation uploaded.

• Evidence of Economic harm from COVID-19:
  • 2019 and 2020 Business Income Tax returns
    • For partnerships – include IRS Form 1065 and Schedule K-1
    • For sole proprietors – include IRS Form 1040 Schedule C
    • For Corporations – include IRS Form 1120 or 1120-S

• Evidence of business location and current operation: Two of the following documents demonstrating that the business is operating at the qualifying location(s):
  • Current lease; or
  • Utility bill; or
  • Current business bank statement; or
  • Current business mortgage statement; or
  • Business credit card statement; or
  • Professional insurance bill; or
  • Payment processing statement
  • NYS ST-809 or ST-100 sales tax collection documentation.

• Schedule of Ownership:
  • Listing of names
  • Social Security numbers or Federal Employer Identification Number (FEIN), and
  • Percentage ownership for all owners.

• Evidence of Number of Employees:
  • NYS-45 and NYS-45 ATT documents for the following periods:
    • April 1, 2019 to June 30, 2019
    • July 1, 2019 to September 30, 2019
    • April 1, 2020 to June 30, 2020
    • July 1, 2020 to September 30, 2020
    • January 1, 2021 to March 31, 2021

How to Apply

To determine the eligibility requirements, each eligible business must complete the Eligibility Questionnaire. Once the eligibility questionnaire is completed, you will be asked to submit an application via email.

When to Apply

There are two ways the Return-to-Work Tax Credit can be claimed. There is Fast Track Option which allows impacted restaurants to claim Return-to-Work credit before end of the tax year. Qualifying restaurants may claim the credit before August 31, 2021 if they can prove a net increase in at least 1 full-time employee from the period April 1, 2021 to August 31, 2021. Alternatively, the restaurants can claim the credit on their 2021 NYS tax return if they can prove a net increase in at least 1 full-time employee from the period April 1, 2021 to December 31, 2021.

Author: Hiten Patel | [email protected]