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New York Enacts Significant Tax Reform

New YorkOn March 31, 2014, Governor Andrew Cuomo signed into law New York’s 2014-2015 Executive Budget. The following are some of the provisions in the budget legislation which have a direct impact on the credits and incentives landscape: 

  • Bank Franchise Tax Repeal: The legislation repeals the Article 32 Bank Franchise Tax, effective for tax years beginning on or after January 1, 2015. Banks will now be subject to the same Article 9-A corporate franchise tax as other corporations, and will be able to use tax credits available under Article 9-A.
     
  • Rate Reduction: The corporate franchise tax rate is reduced from 7.1% to 6.5% effective for tax years beginning on or after January 1, 2016; however, in the case of qualified manufacturers, the corporate franchise tax rate is reduced to 0% effective for tax years beginning on or after January 1, 2014.
     
  • Real Property Credit for Manufacturers: The legislation enacts a new 20% refundable tax credit for New York real property taxes paid by qualified manufacturers who use the property principally for manufacturing.
     
  • Workers with Disabilities Tax Credit: The new law creates a tax credit for eligible employers that employ eligible persons with developmental disabilities. The credit is equal to 15% the qualified wages paid to a qualified full-time employee who works at least 30 hours per week and 10% for part-time employees working at least 8 hours per week, and is employed for at least 6 months. The credit shall not exceed $5,000 for a full-time employee and $2,500 for a part-time employee. The credit is effective for tax years beginning on or after January 1, 2015 and will sunset five years later.
     
  • Youth Works Credit Expanded: The legislation adds an additional $1,000 credit for eligible employees who remain employed for an additional year. The requirements for an eligible employee have been expanded to include full-time high school students who work at least ten hours per week. 

 Learn more about leveraging tax credits and incentives with help from ADP.


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