NY: START-UP NY FAQs
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START-UP NY FAQs | Empire State Development Skip to main content --> START-UP NY FAQs You've got questions. START-UP NY has answers. Below you'll find a list of frequently asked questions. If you don't find what you need, please contact us for additional help. General Program Questions Q: When do the START-UP NY Program benefit periods actually start? A: Businesses will receive an approval date from ESD when ESD accepts the business into the Program. No benefits can start earlier than this date. Businesses will receive a locate date when they physically locate and commence operations in the tax-free NY area (TFA). This date will be listed on the certificate of eligibility issued by the sponsor and marks the start of the 10-year benefit period for the tax credits and personal income tax wage exclusion benefit. Businesses may also have a separate start date for sales tax and real property transfer tax benefits. This date can occur on or after the approval date but before the date the business locates in the TFA. Form STR-1, which is completed by the TFA sponsor, contains the start date of these benefit periods as agreed to by the approved START-UP NY business. The end date of the period is 10 years after the date on the STR-1, provided no subsequent decertification occurs. For example, for a benefit period start date of October 17th, 2015, the corresponding end date would be October 16th, 2025. Q: The tax factor of the START-UP NY tax elimination credit excludes income from a line of business or intangible property, like a royalty, that was previously conducted, created or developed by the approved business or a related person before being accepted into the START-UP NY program. How does an approved START-UP NY business determine the amount of this income? A: The approved business must recompute its tax factor so that it reflects the tax on income from solely new activity. (Tax Law §40(d) (4)) The approved business may use any reasonable method to segregate its income between new and previously existing activity, provided, however, it maintains sufficient books and records to demonstrate how the income was categorized. Employees Q: Is an employee of an approved START-UP NY business entitled to a full 10-year benefit period for the personal income tax wage exclusion benefit? A: The 10-year benefit period is linked to the START-UP NY business, not individual employees. Therefore, an eligible employee will only receive 10 years of the wage exclusion benefit if he or she is hired prior to July 1st in the START-UP NY business’s first year of participation in the program and remains employed for the entire 10-year duration. Employees hired in subsequent years can receive the wage exclusion benefit only for the remainder of the business’s benefit period. Furthermore, the wage exclusion benefit for all eligible employees in years 6 through 10 of a business’s benefit period is capped at the first $200,000 in wages for a single fil