10.27.15 |
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New York Introduces Employee Training Incentive Program Tax Credit

Carrot on a stick

The 2015-16 New York Assembly budget bill1 added the Employee Training Incentive Program2, which provides approved New York taxpayers with a training tax credit, effective for tax years beginning on or after January 1, 2015.

The amount of credit available to an approved taxpayer is equal to the following:

  • 50 percent of the taxpayer’s eligible training costs, up to a maximum of $10,000 per employee completing eligible training, and
  • 50 percent of the stipend paid to an intern, up to a maximum of $3,000 per intern completing eligible training.3

In order to participate in the program, a taxpayer must be approved by the Department of Economic Development, and be issued a certificate of tax credit by the department.4  A taxpayer must meet the criteria of one of the following eligibility groups in order to be approved for participation in the program:

Regular Requirements5:

  • Taxpayer must operate in New York predominantly in a “strategic industry.”
  • Taxpayer must demonstrate that it is obtaining “eligible training” from an approved provider.
  • Taxpayer must create at least 10 net new jobs or make a significant capital investment (defined as at least $1,000,000 in new business processes or equipment6) in connection with the eligible training.
  • Taxpayer must be in compliance with all worker protection and environmental laws and regulations.
  • Taxpayer must not owe any past due state taxes or local property taxes.

Internship Program Requirements7:

  • Taxpayer (or an approved provider who has contracted with the taxpayer) must be approved to provide eligible training in the form of an internship program in advanced technology.
  • Taxpayer must be located in New York.
  • Taxpayer must be in compliance with all worker protection and environmental laws and regulations.
  • The internship program must not displace regular employees.
  • Taxpayer must have less than 100 employees.
  • Taxpayer must not owe any past due state taxes or local property taxes.
  • An individual’s participation in the internship program may not last more than 12 months.

A “strategic industry” will be defined by the Commissioner of Economic Development through regulations (which to date, have not been issued), based on the following criteria8:

  • Shortages of workers trained to work within the industry,
  • Technological disruption in the industry, requiring significant capital investment for existing businesses to remain competitive,
  • The ability of businesses in the industry to relocate out of the state in order to attract talent,
  • The potential to recruit minorities and women to be trained to work in the industry in which they are traditionally under-represented,
  • The potential to create jobs in economically distressed areas, based on criteria indicative of economic distress (g., poverty rates, number of individuals receiving public assistance, unemployment rates), or
  • Other criteria as developed by the Commissioner in consultation with the Commissioner of Labor.

With respect to the regular credit calculation, “eligible training” is defined as training provided by an approved provider that9:

  • Upgrades, retrains, or improves the productivity of employees,
  • Is provided to employees filling net new jobs, or to existing employees in connection with a significant capital investment,
  • Is determined by the Commissioner of Economic Development to satisfy a business need on the part of the taxpayer,
  • Is not designed to train or upgrade skills pursuant to a federal or state requirement,
  • Is not training the completion of which would result in the awarding of a license or certificate required by law in order to perform a job function, and
  • Is not culturally-focused training.

For an internship program, “eligible training” means an advanced technology program approved by the Commissioner of Economic Development and provided by an approved provider to provide employment and experience opportunities for current students, recent graduates, and recent members of the armed forces.10  To be eligible for the program, internship training must occur on or after August 1, 2015.

The total amount of tax credits available in the aggregate to tax payers under the program for any tax year is capped at $5,000,00011, and such amount is allotted from the funds available for tax credits under the Excelsior Jobs Program Act.  Of this amount, between $250,000 – $1,000,000 will be allotted to internship programs.

 

Learn More about ADP SmartCompliance® Tax Credits

 

The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice.  The information and services ADP provides should not be deemed a substitute for the advice of any such professional.  Such information is by nature subject to revision and may not be the most current information available.

 


 

1New York Assembly Act No. 3009, adopted April 13, 2015. Text of bill available at https://legiscan.com/NY/text/A03009/2015.

2New York Economic Development Law, Sections 441-446.

3New York Tax Law Section 210-B(50).

4New York Economic Development Law, Section 442.

5New York Economic Development Law, Section 442(1).

6New York Economic Development Law, Section 441(5).

7New York Economic Development Law, Section 442(2).

8New York Economic Development Law, Section 441(6).

9New York Economic Development Law, Section 441(3)(A).

10New York Economic Development Law, Section 441(3)(B).

11New York Economic Development Law, Section 446.

 

 


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