It’s not tax season just yet. But since it’s basically as American to search for sound ways to lower your taxes as it is to pay them, it’s never too early to have taxes on your radar and get prepared. As you know, you can claim deductions to reduce the amount you owe, but too often, manufacturers forget about the incredible opportunities that tax credits provide. In many ways, credits are an even more exciting way to save money because they can directly reduce the taxes you owe and in some cases, produce a refund. In order to simplify the process for you, we’re breaking down various manufacturing-specific incentives that are unique to New York State manufacturers.
Investment tax credit (ITC)
If you or your business placed a qualified property into service during the tax year, you may be entitled to this credit, up to 5% on your investment.
The ITC is a percentage of the investment credit base of qualified property placed into service during the tax year. Unused credits can be carried forward for 15 years (10 years for personal income taxpayers). A business that qualifies as a new business can also elect to receive a refund of unused credit instead of carrying it forward. See Investment tax credit (ITC) to learn more.
Manufacturer’s real property tax credit
You may be eligible to receive a credit equal to 20% of the real property taxes paid during the tax year on your New York State business property!
To be eligible, you must use your property principally for manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing. For more information about eligibility requirements, see Manufacturer’s real property tax credit.
Excelsior jobs program tax credit
Your company may be eligible to receive up to four fully refundable tax credit components:
- excelsior jobs tax credit,
- excelsior investment tax credit,
- excelsior research and development tax credit, and
- excelsior real property tax credit
If your business participates in the Excelsior Jobs Program and has received a certificate of tax credit from Empire State Development, you will be allowed to claim the credit. The amount of each credit component allowed is determined by Empire State Development. For more information about the Excelsior Jobs Program application and approval process, visit Empire State Development.
Alcoholic beverage production credit
If you are a registered distributor under Article 18 of the Tax Law (taxes on alcoholic beverages), you may be entitled to a tax credit.
If you produce 60,000,000 or fewer gallons of beer or cider, 20,000,000 or fewer gallons of wine, or 800,000 or fewer gallons of liquor within a tax year, you could receive a credit equal to 14 cents per gallon for the first 500,000 gallons that you produce in New York State.
You may also qualify to receive 4.5 cents per gallon for each additional gallon over 500,000 produced in New York State (up to 15,000,000 additional gallons for beer, cider or wine or up to 300,000 additional gallons for liquor). To learn more, see Alcoholic beverage production credit.
Don’t qualify for any of the credits we’ve mentioned?
Not to worry. Oftentimes, having an in-depth conversation with a tax professional about your unique business financials can save you a lot of time, frustration, and yes, money. For a complete list of credits and their requirements, see General business corporation (Article 9-A) tax credits and Business tax credits (Article 22). Or, to set up a brief consultative call with one of our RBT professionals who specialize in assisting manufacturing clients, don’t hesitate to contact our team, here.