Key Takeaways
- Uncover overlooked savings: Many New York businesses miss out on state tax credits that can reduce costs and boost cash flow.
- Credits span multiple sectors: From job creation and tech innovation to film production and property redevelopment, opportunities exist across industries.
- Plan early to maximize benefits: Pre-approval, accurate recordkeeping, and strategic stacking with federal programs can increase your total savings.
New York Business Tax Credits
Do you run a business in New York City? The opportunity for growth in this competitive market is huge, but rising operating costs and a complex regulatory landscape can mean companies leave thousands of dollars on the table.
How? By overlooking state tax credits.
Why? Because they often fly under the radar.
As multi-state tax CPAs, we’re here to bring them into focus. State tax credits reduce your overall tax bill, freeing up cash you can reinvest into your business. They work in addition to federal credits, and they’re not just for large corporations — small firms and manufacturers can benefit too. When used strategically, these credits put more money in your pocket and can be a powerful lever for growth.
Below, we’ll highlight NYC credits businesses often overlook and the steps to help you claim them.
Overlooked New York Business Tax Credits
1. Excelsior Jobs Program
Does your business create jobs in New York state? This program rewards investment in New York’s strategic industries, including technology, clean energy, manufacturing, life sciences, scientific R&D, software development, agriculture, and more.
- Who qualifies: Businesses that create net new jobs in an eligible industry, meeting minimum thresholds that range from 5 to 150 jobs, depending on the sector. Some companies can also qualify by retaining jobs while making significant capital investments.
- Benefit: Refundable tax credits tied to wages for new jobs (up to 6.85% of gross wages), with potential extra credits for qualifying investments, R&D, and green initiatives.
- What to note: You must receive a Certificate of Eligibility from Empire State Development before counting expenses, and you’ll need to meet annual performance targets to keep the credits.
2. Investment Tax Credit (ITC)
If you’re placing manufacturing equipment (or other qualifying property) into service in New York, your business may be entitled to claim a credit worth a percentage of that investment’s cost.
- Who qualifies: Businesses acquiring and placing qualified property into service during the tax year. Certain eligible farmers can claim a 20% credit on qualifying property and may be eligible for refunds on unused credits. New businesses can also qualify for refundable credits.
- Benefit: Reduces your tax liability and, in some cases, provides a cash refund.
- What to note: Keep detailed records to substantiate your claim in the event of an audit.
3. Qualified Emerging Technology Company (QETC) Credits
You don’t have to run a major enterprise to get money back. This credit supports smaller, innovation-driven companies. To qualify as a QETC, you must be located in New York, have $10 million or less in annual product sales, and either operate in an emerging technology field or meet specific R&D spending ratios set by the state.
- QETC Employment Credit: Refundable credit of $1,000 per net new full-time employee, available for up to three consecutive years, if your average New York workforce grows above your base year employment level.
- QETC Capital Tax Credit: Credit for investments in QETCs, available to investors (including individuals and corporations) who invest in a QETC’s equity or debt, such as by purchasing qualifying shares.
These help innovative companies offset hiring costs and encourages outside investment to fuel growth.
4. Film & Television Production Credit
Working in the production sector? You could qualify for a refundable credit covering 30% of qualified expenses, including wages, set construction, props, equipment, and other costs directly tied to filming. The program is designed to keep productions, and the jobs they create, in New York.
- Who qualifies: Production companies filming a substantial portion of a qualified film or TV project in New York and meeting the state’s budget thresholds.
- Benefit: 30% credit on qualified costs, plus extra incentives for:
- Filming in certain upstate counties (outside NYC and nearby suburbs).
- Recording your music score in New York with at least five musicians.
- Relocating an existing TV series to New York for future seasons.
- What to note: Apply before filming starts, meet facility-use requirements, and follow the state’s eligibility rules.
5. Brownfield Cleanup Program (BCP)
Offers tax credits to businesses that clean up and redevelop contaminated properties, turning unused land into productive sites.
- Who qualifies: Businesses accepted into the Brownfield Cleanup Program by the state’s Department of Environmental Conservation.
- Benefit: Credits for both cleanup and redevelopment (tangible property) costs, with higher rates for projects that achieve stricter cleanup levels, are located in designated Environmental Zones (EN-Zones) or Brownfield Opportunity Areas, or serve certain end uses.
- What to note: NYC redevelopment credits are capped, and eligibility requires formal acceptance into the program before work begins.
6. Real Property Tax Abatement Programs (ICAP / 421-a)
Property improvements in New York City often mean higher tax bills because the city reassesses the property at a higher value after construction or major renovations. Certain programs can reduce or phase in those increases.
- ICAP: Offers abatements on property taxes for certain eligible industrial and commercial renovations or new construction.
- 421-a: Provides a partial property tax exemption for qualifying new residential construction, substantial rehabilitation, or certain conversions in designated NYC areas that require a set percentage of affordable housing units.
- Benefit: Reduced or phased-in property tax increases for a set number of years, depending on the program and project type.
Maximizing Your Eligibility
To get the most out of these credits, build them into your planning from day one.
- Track everything. Keep clear, organized records of expenses and activities tied to your credit claim.
- Apply before you start. Some programs won’t count costs unless you’ve been pre-approved, so get that green light first.
- Stack your wins. Many state credits can be combined with federal programs for an even bigger boost.
- Check in once a year. Your eligibility can change as your business grows or shifts focus.
- Bring in the pros. A multi-state tax expert can help you find opportunities you didn’t even know you qualified for.
Frequently Asked Questions
1. Can I claim both New York State and federal tax credits?
Yes. Many state credits can be layered with federal incentives, which can significantly increase your total savings. The key is to plan ahead so your activities qualify for both programs.
2. Do I need pre-approval to claim New York State tax credits?
Some programs (like the Excelsior Jobs Program and the Film & Television Production Credit) require pre-approval before you begin work or incur expenses. Always check the specific program’s requirements before starting.
3. What kind of records do I need to keep for tax credit claims?
Detailed documentation is essential. Keep invoices, payroll records, contracts, and proof of qualifying activities or investments. These will be critical if your claim is audited.
At Fusion, our CPAs help New York businesses secure approvals and maximize benefits so you can reinvest your hard-earned capital where it matters most. Contact us today!
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This blog does not provide legal, accounting, tax, or other professional advice. We base articles on current or proposed tax rules at the time of writing and do not update older posts for tax rule changes. We expressly disclaim all liability regarding actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.