NYS COVID-19 Pandemic Small Business Recovery Program: Applications Officially Open | Marcum LLP

As the world reopens after a nationwide pandemic, small businesses are trying to rebuild themselves from the turmoil that COVID-19 may have caused. To help resolve these financial dilemmas, New York State Governor Andrew Cuomo recently announced that applications for the Small Business Recovery Program are now open.

What does this mean for small businesses?

With $800 million in funding, the Small Business Recovery Program offers New York companies the opportunity to apply for grants of up to $50,000. This grant is only expected to be used for COVID-related costs incurred during the height of the pandemic to keep businesses afloat.

Who is eligible for the subsidy?

Small and micro-enterprises, as well as small for-profit independent arts and cultural organizations are eligible if the company was in operation on March 1, 2019 and remains in operation as of the date of application. according to governor.ny.gov, priority will be given to all socially or economically disadvantaged entrepreneurs. This includes minority-owned, female-owned, veteran, or service-disabled veteran businesses. This also includes companies located in economically distressed communities.

How are a small business and a micro-enterprise defined?

As mentioned on nysmallbusinessrecovery.com, a small business is independently owned and operated, not dominant in its field, and employs 100 or fewer people. A micro-enterprise is essentially the same but employs 10 or fewer people. The Eligible Company must be resident in New York State, incorporated in New York State and licensed or registered to conduct business in New York State.

Who is not eligible for the subsidy?

• Non-profit organizations, churches and other religious institutions.
• Government agencies or offices of elected officials.
• Companies primarily engaged in political or lobbying activities.
• Businesses that have received funding from the SBA Restaurant Revitalization Fund Grant Program.
• Landlords and passive real estate companies.
• Illegal businesses and enterprises.

What do eligible small and micro enterprises need to demonstrate?

1. Gross income in 2019 or 2020 between $25,000 and $500,000.
2. Positive net profit on corporate tax return 2019.
3. At least 25% loss of annual gross income in a year-over-year comparison as of December 31, 2020, for the same period in 2019.
4. Total business costs on the 2020 income tax return exceed the subsidy amount.
5. Not eligible for business grant assistance under the federal American Rescue Plan Act of 2021 or other available federal COVID-19 economic recovery or business assistance programs, including loans waived under the federal Paycheck Protection Program, or unable to to obtain adequate business assistance from such federal programs.

What qualifies as a COVID related release?

To qualify as a COVID related expense for the grant money, costs must have been incurred between March 1, 2020 and April 1, 2021. These costs include payroll, commercial rent or mortgage payments for NYS-based real estate, payment of local property or school taxes, insurance costs, utility costs, personal protective equipment costs (necessary to protect the health and safety of employees and consumers), heating, ventilation and air conditioning costs, other costs for machinery or equipment, and supplies or materials needed to comply with COVID-19 health and safety protocols.

How do you apply for the grant?

The grant application was officially opened on June 10, 2021. Any small business can apply online at lendistry.com. The grant is calculated based on the company’s annual gross income in New York from its 2019 tax return. Companies have the potential to receive a grant of $5,000 to $50,000. The program lasts until funding is exhausted.

What impact will a grant have on future tax returns?

Legislation is currently being proposed to waive taxes on the grants from this program. New York posted an FAQ about Small Business Recovery Program grants at: nysmallbusinessrecovery.com/faq including updates on frequently asked questions and the taxability of the grants.

For more information about the Covid-19 Pandemic Small Business Recovery program, please contact your Marcum tax advisor.