NY TAX CREDITS FOR FARM EMPLOYERS, INCLUDING OVERTIME corporations (including a New York S corporation), sole proprietorships, LLCs and partnerships are eligible. Only “farm The 2022-23 Budget Act for laborers” as defined in New York State contained NY labor law are eligible a couple of important tax employees. This makes credits for New York farm sense because these are the employers. Let’s take the only types of employees for simpler one first: whom overtime is required; Farm Workforce Retention family members and certain Credit executives, professionals, and administrative Since 2017 the state has personnel are excluded. offered a tax credit to farm employers that they can Eligible overtime hours receive for each farm worker include those in any employed. The amount calendar week that exceed started at $250 in 2017 and the overtime threshold set was up to $600 for 2021. The by the commissioner of amount of this tax credit is labor, up to 60 hours in a now doubled to $1,200 per week. This is important, only eligible farm employee who those hours between the worked at least 500 hours. threshold and 60 hours are Find more details from reimbursable through the the state’s Department of tax credits, any overtime Taxation and Finance. hours worked above 60 will Farm Employer Overtime not be reimbursed to the employer. Farm wineries Tax Credit and cideries who derive Overtime for farm more than 50% of their employees is a subject of income from beverage sales intense political debate will need to follow some in New York. After years special rules. Only workers of hearings, campaigns, employed on qualified wage board votes, and agricultural property will be other actions, we’re now waiting to hear exactly what eligible for the tax credit. Only the overtime premium policy the Governor and Commissioner of Labor will is reimbursable through the tax credit. For example, if choose. The wage board the threshold is at 56 hours voted, over the objections of its farm representative, to in 2024, and an employee whose regular pay is $18/ recommend lowering the overtime threshold gradually hour works 58 hours in one week that year, then she will to 40 hours per week by be eligible for two hours 2032.With the recently of overtime pay. Overtime passed budget, New York is 150% of regular pay so state government created she will earn $27 for each a new tax credit that will overtime hour worked. Only essentially cover the cost of overtime for farm employers. the overtime premium, Here are a few details about the extra $9/hour over her regular rate, is eligible for the tax credit: reimbursement through the Farm employers who are Submitted by Ashley Tully, Agriculture Business Coordinator
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Extension Connection
June 2022
tax credit. When pay goes up, marginal costs such as taxes and worker’s compensation premiums also go up. Recognizing this, the overtime tax credit will allow employers to take 118% of the eligible overtime compensation to cover those additional costs. Advance payments of tax credits for overtime premiums paid from January 1st to July 31st are possible. To receive advance payments, employers will need to prepare their claim and submit it to the NYS Department of Agriculture and Markets. NYS Ag and Markets will be involved in this process. They will develop an application process that employers will use to document their claim for the tax credit. Ag & Markets will then issue a certificate of tax credit to eligible employers. All of the details of this process will need to be worked out. Obviously, there are many details to work out in the coming years. Farm employers need to pay careful attention to their employee payroll record systems. It is essential to have accurate and detailed records of employee hours worked and overtime paid in order to take advantage of this important and potentially large tax credit. Sources: Article from Cornell Cooperative Extension Agricultural Workforce Development, accessed May 18, 2022 from www.agworkforce.cals.cornell.edu.
