New York R&D Tax Credit Summary

New York R&D Tax Credit, R&D Tax Credit
New York State R&D Tax Credits

Although New York does not have a State R&D Tax credit based on qualified research expenses that mirror the Federal Research Tax credit, they offer several credits associated with R&D activity, job creation, and investment.

Download A Practical Guide to Identifying, Gathering, and Documenting A Sustainable Research Tax Credit Claim

New York State Investment Tax Credit (ITC)

Refundable Tax Credit – Yes*

In addition to the standard ITC, New York offers an optional ITC on R&D investments with the following parameters:

• An ITC equal to 9% of qualified investment in R&D buildings and tangible personal property
• Taken in place of the regular ITC
• Credit can reduce tax to the higher of the alternative minimum tax or fixed dollar minimum tax
• New businesses take a refund of unused credit*
• Unused credits can be carried forward for 15 years (10 years for personal income taxpayers)

How to obtain the credit?

No application or pre-certification required. Taxpayers calculate the credit using Form-CT-46.


New York Excelsior Jobs Program R&D Tax Credit

Refundable Tax Credit- Yes

As part of the Excelsior Jobs Program, qualified companies are entitled to refundable R&D Tax Credit of 50 percent of the Federal Research Tax Credit up to three percent of research expenses in New York State.

How to obtain the credit?

This is a discretionary program that must be applied for. The minimum job requirement for an application is five, but regionally significant projects will have a commitment to 20 jobs and $6 million of investment. Applicants must complete a consolidated funding application to the local ESD office.


New York Qualified Emerging Technology Companies (QETC)

Refundable Tax Credit- No

A QETC is a company located in New York State with total annual product sales of $10 million or less, and meets either of the following:

Primary products or services that include:
• Advanced materials and processing technologies
• Engineering, production, and defense
• Electronic and photonic devices and components
• Information and communications technologies
• Bio- and nano-technologies
• Re-manufacturing technologies
Or
• The company has research and development (R&D) activities in New York State, and its ratio of R&D funds to net sales equals or exceeds the average ratio for all surveyed companies, as determined by the National Science Foundation

A qualified QETC is entitled to a credit on their qualified investments as follows:
• 10% of qualified investments in certified QETCs with a useful life of four years
• 20% of qualified investments in certified QETCs with a useful life of nine years

Qualified investments do not include investments made by current owners of the QETC. Owner is defined as an entity that owns more than 10% interest in a QETC.

A qualified QETC is also entitled to an Employment Tax Credit of up to $1,000 per full-time employee. The credit is available for three consecutive tax years and has other limitations.

How to obtain the credit?

Certification by the New York State Department of Taxation and Finance is required before you can claim the credits. Companies must file form DTF-620 30 days prior to the beginning date of certification. The company will be notified about its certification within 30 days by New York.


New York City Biotechnology Tax Credit (Expires 12/31/2015)

Refundable Tax Credit- Yes

This NYC Biotechnology Tax Credit allows investors and owners of QETCs focused on biotechnology to claim a refundable tax credit against the General Corporation Tax and Unincorporated Business Tax for amounts paid or incurred for certain facilities, operations and employee training in New York City. To claim the Biotechnology Tax Credit, the QETC must be:

•located in NYC
•have total annual product sales of $10 million or less
•have either its primary products or services classified as emerging technologies, or it has R&D activities in NYC

Flow Through Entity

Policy options targeting small businesses include allowing a refund of unused ITC and subsequent years’ employment credit and extending the EIC to small businesses, such as S corporations, limited liability companies (LLCs), limited liability partnerships (LLPs), and partnerships, whose owners become taxable under the personal income tax. Extending the ITC refundability would provide small businesses with an immediate infusion of cash. It would ease cash flow problems that often cause many small businesses to fail. Extending the EIC to the personal income tax would ensure that owners of flow-through entities receive the same tax benefits as small businesses taxable under the general corporate franchise tax. These entities include S corporations, LLCs, LLPs, and partnerships.

How to obtain the credit?

Companies are required to submit an application by January 15th immediately following the year of the credit, and the Department of Finance will make a determination of the amount of biotechnology credit the taxpayer may claim and mail a certificate of eligibility to the taxpayer indicating that amount on or before February 15th.

Find out if you qualify for the R&D tax credit

 

SELL YOUR NOL’s AND R&D CREDITS

If your company hasn’t considered the R&D credit in the past because you have net operating losses (NOLs) and could not utilize the credit contact us today to find out which states allow you to sell your credits and losses for up to 95 cents on the dollar. Also, qualified start-up companies can now take a credit on their payroll taxes for their R&D credit, allowing your company to utilize the R&D credit immediately, even if your company does not have taxable income.
FIND OUT MORE TODAY

 

States Offering R&D Credit:

                             States Without R&D Credit

Alabama
District of Columbia
Missouri
Montana
Nevada
Oklahoma
South Dakota
Tennessee
Washington
West Virginia
Wyoming