Last updated on July 29th, 2024
Especially when it comes to taxes, you should always take credit where credit is due!
Following are highlights of numerous tax credits that may be available to your business, related to employees, research and development, your product, whether your business is part of a farm operation, and more. Becoming familiar with what’s available can help you ensure you’re tracking and documenting the right information so you can take credit where credit is due.
Alcoholic Beverage Production Credit
Registered distributors who produce beer, cider, wine, or liquor in New York are eligible if during the tax year, they produce 60 million or fewer gallons of beer; 60 million or fewer gallons of cider; 20 million or fewer gallons of wine; or 800,000 or fewer gallons of liquor. Each year, the tax credit for the first 500,000 gallons produced in the state equals $.14/gallon of beer or cider; $.30/gallon of wine; $2.54/gallon of liquor with an ABV of 2% to 24%; or $6.44/gallon of liquor with an ABV over 24%. For amounts over 500,000 gallons, the credit equals $.045/gallon for up to 15 million gallons of beer, cider, and wine and up to 300,000 gallons of liquor. Recordkeeping and forms required to claim the credit are here.
Employing Employees in Certain Protected Classes In New York
You may receive tax credits when you employ a veteran, a person with disabilities, youth between the ages of 16 and 24, and people recovering from substance use disorder. Federal tax credits are also available when you hire individuals from certain targeted groups under the Work Opportunity Tax Credit.
Federal Fuel Tax Credit
Through 2024, farms and breweries may qualify if they use fuel for off-highway purposes, such as running equipment and machinery. The IRS has identified this as one of its “dirty dozen” or among the most abused tax breaks so extra care must be made when claiming the credit.
Federal R&D Tax Credit
Reduce your federal tax liability dollar for dollar to offset quarterly payroll taxes by up to $500,000 for qualifying research activities. For breweries and distilleries, the credit may be available for activities resulting in product changes; process changes to improve waste reduction and efficiencies; new sustainable practices; and more. Credits are based on money spent on employees’ time, contractor expenses, and supplies and equipment. See IRS Form 6765 for details.
FICA Tip Credit
If you have food and beverage service workers who customarily earn tips and you pay Social Security and Medicare taxes on those tips, you may be eligible to credit a portion of what you pay against your business income taxes. Recordkeeping requirements apply. A draft of IRS Form 8846 is also available, with additional information.
New York Tip Credit
If you employ food and beverage service workers who earn at least $30 a month in tips, a portion of those tips may be used to satisfy your minimum wage obligation. This applies to work hours producing tips or supporting tip-producing work that is not performed for more than 20% of an employee’s workweek. To take this credit, recordkeeping and reporting requirements apply.
If You Operate Your Brewery at a Farm
Farm Employer Overtime Credit
New for 2024, eligible farmers who pay a farm employee overtime, may be eligible for a tax credit.
Farm Workforce Retention Credit
If you are a farm employer or owner of a farm employer in New York and have an eligible farm employee employed for at least 500 hours, you may be eligible for an annual credit of $1,200.
Excelsior Job Program
If you have an agricultural operation in New York that is expanding and will result in at least five new jobs, you may be eligible for job tax credits, investment tax credits, R&D tax credits, property tax credits, and child care services tax credits. Click here for more information.
Investment Tax Credit
Eligible farms that place qualified property into service during a tax year may qualify to claim 20% of the cost. If you qualify for the investment tax credit and more than double your employee count as a result, you may also be eligible for the New York Employment Incentive Credit.
There are even credits if you purchase an automated external defibrillator, pay premiums for eligible long-term care insurance, pay school taxes, rehabilitate a historic building, rehabilitate a barn built before 1946, sponsor an apprenticeship program, and more.
If you need help identifying potential tax credits that may be available to your brewery, distillery, and/or distribution business, you can count on RBT CPAs. We can also help you ensure your recordkeeping practices will enable you to take full advantage of what’s available.
RBT CPAs has been a leading provider of accounting, audit, advisory, and tax services to Hudson Valley businesses, non-profit organizations, municipalities, and individuals for the past 55 years. Give us a call so you can see how we can be Remarkably Better Together.
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