Farm employer overtime credit (Articles 9-A and 22)

A new refundable credit is available for taxpayers who are:

a farm employer (or owners of a farm employer); and

paying eligible farm employees for eligible overtime.

The credit is allowed for the hours worked by eligible farm employees exceeding the overtime work threshold set by the commissioner of labor, not including hours in excess of 60 hours. This threshold is scheduled to be reduced below 60 hours starting January 1, 2024. Therefore, tax year 2024 will be the first year that taxpayers will be eligible for this credit.

The amount of the credit is equal to 118% of the product of:

eligible overtime worked by an eligible farm employee; and

overtime rate paid by the farm employer less employee’s regular rate of pay.

If more than 50% of federal gross income from farming is from the sale of cider or wine, then an eligible farm employee can only be included if they are employed on qualified agricultural property.

The farm employer can request an advance payment of the portion of credit allowed from January 1 to July 31 by submitting a properly completed application to the Department of Agriculture and Markets (Ag and Markets) no later than September 30 of that tax year. Ag and Markets will issue a certificate of advance payment that specifies the exact amount that may be claimed as an advanced payment.

Upon receipt of an Ag and Markets certificate of advance payment, the business owners must apply for the advanced payment with the tax department no later than November 1 of the taxable year for which the advanced payment is being applied. If a taxpayer receives an advanced payment and does not qualify as an eligible farmer, they must add back as tax the amount of the advanced payment.

[Part B, Subpart C of Chapter 59 of the Laws of 2022; Tax Law §§ 42-a, 210-B(58), and 606(nnn)]