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New York State Announces Financial Assistance Programs for Restaurants

Sarah S. Kim and Ken Maeng

5.25.21 | Industry Insights

New York State’s Fiscal Year 2022 budget includes $1 billion in relief to help the hospitality industry recover from economic harm suffered from the COVID-19 pandemic. The recovery package includes (i) up to $35 million in tax credits to restaurants that experienced a significant decrease in gross receipts or full-time employees, and (ii) $25 million in grants to restaurants that provide free meals to the financially disadvantaged.

Restaurant Return-To-Work Tax Credit Program

The Restaurant Return-To-Work Tax Credit Program was designed to incentivize restaurants to expeditiously rehire workers and increase total employment. Under the program, qualifying restaurants may claim $5,000 in refundable tax credits for each full-time employee they hire between April 1, 2021 and December 31, 2021, up to $50,000.

To be eligible for the program, a restaurant must:

  • Have fewer than one hundred full-time employees as of April 1, 2021;
  • Operate a business in New York City and have been subjected to a ban on indoor dining for over six months, or outside of New York City in areas designated by the New York State Department of Health as either an Orange or Red zone and have been subjected to additional restrictions on indoor dining for at least thirty consecutive days;
  • Have experienced at least a forty-percent decrease in gross receipts or average full-time employment between the second quarter of 2019 and the second quarter of 2020 or the third quarter of 2019 and the third quarter of 2020;
  • Have demonstrated a net employee increase since March 31, 2021;
  • Be in substantial compliance with any public health or other emergency orders; and
  • Not owe past-due state taxes or local property taxes.

The application and approval process is being established.

Once the application is submitted and approved, the New York State Department of Economic Development will issue a certificate of tax credit, which prescribes the amount of credit that may be claimed for that tax year. An owner of a pass-through entity that has received the certificate will be allowed its pro-rata share of the credit earned by the pass-through entity.

New York Restaurant Resiliency Grant Program

The New York Restaurant Resiliency Grant Program was designed to support restaurants that offer free meals to people within distressed or underrepresented communities. Grants awarded pursuant to this program will allow restaurants to cover the costs of food and other expenses related to the preparation, provision, or delivery of meals. Application and program parameters are being developed.

Questions: Contact your Berdon advisor.