Navigating the New York State Employee Retention Credit

Similar to many business owners in New York, you might be investigating your qualifications for the Employee Retention Credit (ERC). Amid tough economic times, the ERC serves as a potential economic safety net. This article attempts to demystify the complexities of the ERC, specifically within New York’s diverse sectors such as; finance, hospitality and the arts. To gain a better understanding. Keep reading below, to learn how this tax credit, could lead to substantial per-employee savings for your enterprise.

Do I Qualify for the NY Employee Retention Credit?

Similar to most neighboring states. In New York, qualifying for the ERC is mainly in sync with federal standards. The essential conditions include:

• A significant dip in gross income
• A business shutdown or limitation due to government directives

Additionally, a workforce with:

• At least two W-2 employees, for any given financial quarter is essential

During 2020. A 50% decrease in quarterly gross revenue, would let you claim a maximum of $5,000 for each staff member. This shifted in 2021. Currently a 20% drop, qualifies you for up to $7,000 per employee each quarter. Contrary to common belief, these credits can actually be claimed retroactively. Making it essential to be well-versed in these evolving guidelines, to maximize benefits. ^{(1, 2)}

Services Available to Help New York Businesses Apply for ERC

The ERC application process may appear challenging—yet assistance is readily accessible with just a click. The Fundwise platform aims to make your application journey smooth. Just provide key information, such as;

• Your name
• Business name
• Number of W2 employees

Once submitted, Fundwise will evaluate your potential ERC benefits for you. Supported by a dedicated team of legal specialists, CPAs and industry experts. Fundwise will take care of the cumbersome IRS paperwork. This ensures that you’ll receive your eligible funds directly from the IRS, hassle-free. Fundwise’s fee structure is straightforward; they only charge once successful funding has been received.

How Does the ERC Interact with Other New York Tax Credits?

In New York, the Employee Retention Credit (ERC) isn’t the sole financial incentive available to you. It can be synergistically used alongside a variety of other state-specific tax benefits, to greatly enhance your financial relief. Here’s a look at some that align well with the finance, hospitality, and arts sectors;

• Film Production Tax Credit: Aimed at promoting the film industry, this credit can be especially beneficial for businesses involved in artistic productions.
• START-UP NY Program: Targeting new and expanding businesses, particularly in technology and finance. This program offers tax benefits, for companies that partner with New York educational institutions.
• Empire State Music and Theatrical Production Tax Credit: This is tailored to support live productions and concerts, making it ideal for those in the arts and hospitality sectors.
• New York City Commercial Expansion Program: This provides rent reductions for businesses. This includes those in finance and hospitality, that lease commercial space in certain parts of the city.

New York frequently adjusts and sometimes even expands these financial incentives, making it critical to stay informed through official state channels. By strategically utilizing both federal and state-level credits / benefits. You stand to gain multiple avenues for financial assistance and growth. Therefore, keeping up-to-date with the latest policy changes, is essential in this ever-changing financial landscape.

*Please note, you are allowed to also claim the Film Production Tax Credit, START-UP NY Program, WOTC etc. On the condition that the wages utilized for determining these payouts. Are not simultaneously used for calculating the Employee Retention Credit (ERC). ⁽³⁾

More Details About New York (NY/NYC)

• Since 2014, New York State has been providing annual film production tax benefits totaling up to $420 million, making it the U.S. state with the most generous tax incentives in this sector.
• Located in New York City, Wall Street is the financial capital of the world, housing the New York Stock Exchange and NASDAQ among other major financial institutions.
• NYC is also home to numerous global banking and financial service companies like JPMorgan Chase, Goldman Sachs, and Citigroup. ^{(4, 5, 6)}

Conclusion

For New York business owners, the ERC serves as a crucial resource. Especially for those looking to manage fiscal challenges, while retaining their workforce. With strong chances of approval and the possibility for significant per-employee savings. Missing out on the ERC would be a financial misstep. For any further details you may need, don’t hesitate to contact Fundwise. Their team is committed to assisting you at each step of the application journey.

FAQ

1. Can I Claim the ERC Retroactively?

Yes. Retroactive claims are possible, by amending prior tax returns to include the ERC, if it was not initially claimed.

2. What Records Should I Keep?

Documentation of employment taxes, financial statements, and wage records for employees. Should be maintained to validate your ERC claim.

To discover additional FAQ questions, click here.

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Last reviewed September 2023