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August032021

New York State $35 Million Return-to-Work Restaurant Credit

Richard Goldstein, J.D. and Ken Maeng, J.D.

08.03.21 | Industry Insights

On July 28, Governor Cuomo released the details for the Return-to-Work Restaurant Credit Program (the “Program”). The program provides a $5,000 tax refundable credit for every qualified hire up to $50,000 per business subject to the New York Business Corporation Tax and/or the New York personal income tax. The Program is open to eligible restaurants located in New York City, or in areas outside of New York City that were designated as Orange or Red Zones for at least thirty consecutive days.

Restaurants may claim the credit after August 31, 2021 (Fast Track Option), if the business can demonstrate a net employee increase of at least 1 full-time employee as measured from April 1, 2021 to August 31, 2021 (see “Additional Requirements” below). Eligible restaurants choosing the Fast Track Option will receive a payment equal to the tax credit. The Fast Track-Option, however, does not allow any tax credits for any hires made after August 31, 2021.

To receive an advance payment, eligible restaurants must provide their April to August monthly employment numbers to the Department of Economic Development by September 15, 2021 (a draft of the NYS-45 for the 3rd quarter of 2021 will be accepted).  Restaurants that receive a certificate of tax credit from the Department of Economic Development, can then request the advance payment from the New York State Department of Taxation and Finance. The request must be made before November 15, 2021. Alternatively, restaurants can claim the tax credit on their 2021 NYS tax return (the “year-end-option”) if the business can demonstrate a net employee increase of at least 1 full-time employee as measured from April 1, 2021 to December 31, 2021.  Note – if eligible applications exceed $35 million under the Fast Track Option, then the year-end option will not be available.

Additional Requirements

The Program is open to the following applicants.

  • All small independently owned and operated restaurants (excluding franchises) with less than 100 employees as of April 1, 2021 in New York City or in areas that were designated by the NYS Department of Health as either an Orange or a Red zone for at least 30 consecutive days.
  • Applicants must be able to demonstrate COVID-related losses of at least 40% in gross receipts or full-time equivalent employees.
  • Applicants must hire at least one full-time worker at the restaurant.

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

Additional details regarding the program are available at:

https://esd.ny.gov/restaurant-return-work-tax-credit

The Empire State Development Agency has published frequently asked questions regarding the Program which can be accessed at:

https://esd.ny.gov/restaurant-return-work-tax-credit-program-frequently-asked-questions

Questions: Contact Richard Goldstein at 212.331.7557 | rgoldstein@berdonllp.com or reach out to your Berdon advisor.

Berdon LLP New York Accountants

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