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New York Minimum Wage Reimbursement Tax Credit

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It’s no secret that the cost of living in the Empire State can add up quickly. If you’re a college student racking up expenses, perhaps it’s time to consider applying for a job.

Nailing down a minimum wage job in New York sounds like it should easy, except so many people may be competing for the same position.

Fortunately for you, the State of New York is doing its best to make those jobs more available to students.  The Minimum Wage Reimbursement Tax Credit helps motivate employers to hire eligible students who are in need of a job.

How much of a credit can employers receive?

For each eligible employee who is paid at the minimum wage rate, employers may receive a tax credit per hour worked. The amount of the credit is determined by the planned minimum wage for the State of New York from January 2014 to December 20181:

  • Minimum wage as of December 31, 2013was $8.00/hr.
  • Minimum wage as of December 31. 2014 was $8.75/hr.
  • Minimum wage as of December 31, 2015 will be $9.00/hr.

According to the Department of Taxation and Finance of the State of New York, the actual amount of the tax credit that eligible employers can qualify for is “the total number of hours worked by eligible employees during the taxable year for which they are paid the New York minimum wage, multiplied by the applicable tax credit rate for that year, as follows:2

  • $0.75 per eligible hour worked for tax years beginning on or after January 1, 2014, and before January 1, 2015
  • $1.31 per eligible hour worked for tax years beginning on or after January 1, 2015 and before January 1, 2016
  • $1.35 per eligible hour worked for tax years beginning on or after January 1, 2016 and before January 1, 2019

Eligibility

As the Department outlines, employers who are subject to tax in the state may be eligible for the Minimum Wage Reimbursement Tax Credit if they “employ students in New York State for tax years beginning on or after January 1, 2014, and before January 1, 2019, who are at least 16 but not yet 20 years of age and are paid at the New York minimum wage rate.”3

Ready to get started?

Employers, once you have determined that your business is eligible to receive benefits from the New York Minimum Wage Reimbursement Tax Credit, the first step is to submit the required online form to the New York State Department of Taxation and Finance.4

The process can be a complex undertaking, so it may be advisable to seek help from an experienced third-party provider. For additional resources and tools that can help your business with tax credits and beyond, visit ADP’s SmartCompliance page.

 

Learn More About ADP SmartCompliance®


 

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.

1NY Outlines Minimum Wage Reimbursement Tax Credit – http://www.law360.com/articles/498237/ny-outlines-minimum-wage-reimbursement-tax-credit

2,3Minimum wage reimbursement credit – http://www.tax.ny.gov/pit/credits/minimum_w


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