The New York budget legislation enacted in 2021 included an expansion of the Excelsior Jobs Program for green projects. The Excelsior Jobs Program provides job creation and investment incentives for businesses in targeted industries in the form of refundable tax credits that can be claimed over a benefit period of up to 10 years if the eligible business meets and maintains established job and investment thresholds.
The Program’s three main tax credits are expanded by this legislation and can provide significant benefits to businesses engaging in eligible green projects. The Excelsior Jobs Tax Credit, which provides a tax credit of up to 6.85% of wages per net new job, is increased to up to 7.5% of wages per net new job for green projects. The Excelsior Investment Tax Credit is also increased from 2% of qualified investments to 5% of qualified investments for green projects. Finally, the Excelsior Research and Development (“R&D”) Tax Credit is also increased from 6% of qualified R&D expenditures to 8% of qualified expenditures attributable to activities conducted in New York State for qualified green projects.
To be eligible for these expanded green project tax credits, a business must first be eligible for the Excelsior Jobs Program in one of the following targeted industries: agriculture, manufacturing, software development or scientific research and development; and meet the minimum eligibility criteria for creating new jobs and/or making significant new capital investments in a facility located in New York State. The business also needs to engage in a qualified “green project,” which is defined as a project that makes products or develops technologies that are primarily aimed at reducing greenhouse gas emissions or supporting the use of clean energy.
Examples of green projects highlighted in the legislation include the manufacture or development of products or technologies or supply chain components primarily for renewable energy systems, vehicles that use non-hydrocarbon fuels and produce zero or near-zero emissions, heat pumps, energy efficiency, clean energy storage and other products that significantly reduce greenhouse gas emissions by minimizing the utilization of depletable resources or by improving industrial efficiency.
Businesses developing products or technologies that are primarily aimed at reducing greenhouse gas emissions or that support the use of clean energy should consider whether they are engaging in a “green project” and may potentially qualify for these expanded tax credits that are now part of the Excelsior Jobs Program, especially if they planning to create new jobs and/or make new investment in facilities located in the State. These tax credits coupled with additional available state and federal incentives can provide businesses with significant tax planning opportunities if they are expanding their current facilities or considering relocating their operations to New York State.
More information on the Excelsior Jobs Program, including eligibility criteria and project activity definitions, is available at Empire State Development (ny.gov) or by contacting the local ESD regional office.
For more information on this topic or other state tax programs, please contact Thomas E. Mazurek, Jr., CPA at Tronconi Segarra & Associates LLP, at tmazurek@tsacpa.com or 716.633.1373
