New York R&D Tax Credit Summary

 

New York has a State R&D Tax credit based on qualified research expenses that mirror the Federal Research Tax credit, they offer several other credits associated with R&D activity, job creation, and investment as well. The Excelsior Jobs Program has been created in the State of New York to provide several refundable credits including the Research and Development Tax Credit.  

The Excelsior Jobs Program provides job creation and investment incentives to firms in such targeted industries such as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to apply for up to four new tax credits. The Program encourages businesses to expand in and relocate to New York while maintaining strict accountability standards to guarantee that businesses deliver on job and investment commitments. Program costs are capped at $500 million annually to maintain fiscal affordability and ensure that New Yorkers realize a positive return on their investment.

Firms in the Excelsior Jobs Program may qualify for four fully REFUNDABLE tax credits.  Businesses claim the credits over a benefit period of up to 10 years.  To earn credits, firms must first meet and maintain established job and investment thresholds outlined.

Program Credits:

  • Excelsior Jobs Tax Credit:  A credit of 6.85% of wages per net new job.

  • Excelsior Investment Tax Credit:  Valued at 2% of qualified investments.

  • Excelsior Research and Development Tax Credit:  A credit of 50% of the Federal Research and Development credit up to 3% of research expenditures in New York State (NYS).

  • Excelsior Real Property Tax Credit: Available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds (Regionally Significant Project).

Program Eligibility:

  • The Program is limited to firms making a substantial commitment to growth – either in employment or through investing significant capital in a New York facility.

  • The Job Growth Track comprises 75% of the Program and includes all firms in targeted industries creating new jobs in New York. Twenty-five percent is set aside for the Investment

  • Track firms who meet the minimum job retention criteria and make significant new capital investments in a New York facility and which meet a benefit-cost threshold of at least $10 of investment and new wages for every $1 of tax credit.

  • Only certain categories of firms are eligible to also apply for the Real Property Tax Credit. Participation in the Program and the amount of credits authorized is at the discretion of the Commissioner. Benefits will be provided if a firm meets the eligibility criteria.

Eligibility:

The following strategic businesses located in or planning to locate in New York State that will create  or retain jobs and make significant capital investments.  

  • Scientific Research and Development firms creating at least 5 net new jobs

  • Software Development firms creating at least 5 net new jobs

  • Financial services (customer service) back office operations creating at least 25 net new jobs

  • Agriculture firms creating at least 5 new new jobs

  • Manufacturing firms creating at least 5 net new jobs

  • Back office firms creating at least 25 net new jobs

  • Distribution firms creating at least 50 net new jobs

  • Music Production firms creating at least 5 net new jobs

  • Entertainment Companies creating at least 100 net new jobs

  • Life Sciences Companies creating at least 5 net new jobs

  • Other firms creating at least 150 net new jobs and investing at least $3 million

  • Firms in strategic industries that make significant capital investment that have at least 25 employees; manufacturing firms who retain at least 5 employees are also eligible to apply for participation in the Program

If unable to meet the job-creation requirement, a potential applicant may seek classification as a “regionally significant project.” This requires even more jobs to be created and the participant must make a “significant capital investment” in the state. However, regionally significant projects do not appear to be limited to specific industries. A business may qualify by meeting an investment threshold without having to also meet the jobs thresholds.

Eligible project types:

  • Job creation

  • Job retention and significant capital investment

Application Process: Applicants must complete a consolidated funding application (CFA) that will be submitted to the local ESD regional office. The CFA can be accessed at http://nyworks.ny.gov . If the application is approved, then within the available credits each year, ESD will enter into a formal agreement with the firm that clearly states the tax credits as well as the job and investment requirements for each year. Firms that meet the eligibility criteria will be issued a certificate allowing them to claim eligible tax credits.

Accountability and Transparency: Program costs are capped at a predetermined amount ranging from $50 million to $250 million in a given year, to maintain fiscal affordability and insure that New Yorkers realize a positive return on their investment. The Program’s total lifetime value is $2.25 billion. A firm may only claim tax credits after demonstrating that it meets the minimum eligibility criteria. ESD will post online quarterly reports providing information both on program statistics and individual participant performance.
 

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