Can Companies Claim
R&D Tax Credits in New York?
Yes. New York offers the Excelsior Jobs Program, which includes several refundable credits, such as the Research and Development (R&D) Tax Credit.
Key Features of the New York R&D Credit
Businesses can claim up to 50% of the federal R&D credit for expenditures incurred in New York.
Credit is capped at 6% of qualified research expenditures (QREs) or 8% for green projects.
QREs follow the federal Section 41 definition, but expenses must be incurred in New York.
Businesses not participating in Excelsior may qualify for the Life Sciences R&D Tax Credit Program.
Excess credit is refundable and can only be claimed over a 10-year period after receiving the certificate.
Claims must be filed on a timely tax return
Certain industries, such as medical or veterinary lab testing, are not eligible.
New York R&D Tax Credit Case Study
A New York pharmaceutical company claimed the R&D credit for the first time for a multi-year project covering 2021–2024.
The company qualified for $361,666 in federal R&D credits and $42,000 in New York state credits.
FEDERAL | NEW YORK | |||
Year | Total QREs | Credit | Total QREs | Credit |
2024 | $1,400,000 | $141,166 | $1,400,000 | $42,000 |
2023 | $1,000,000 | $98,000 | NA | NA |
2022 | $750,000 | $73,500 | NA | NA |
2021 | $500,000 | $49,000 | NA | NA |
Total | $3,650,000 | $361,666 | $1,400,000 | $42,000 |
Federal R&D Tax Credit Summary
| Year | Total QREs | Federal Credit |
|---|---|---|
| 2024 | $1,400,000 | $141,166 |
| 2023 | $1,000,000 | $98,000 |
| 2022 | $750,000 | $73,500 |
| 2021 | $500,000 | $49,000 |
| Total | $3,650,000 | $361,666 |
New York R&D Tax Credit Summary
| Year | New York Credit |
|---|---|
| 2024 | $42,000 |
| 2023 | NA |
| 2022 | NA |
| 2021 | NA |
| Total | $42,000 |
Criteria for Qualifying Research Activities
The four-part test below defines what counts as qualified research activities
Purpose of the Research
The activity should develop or improve a business component, such as a product, process, software, formula, technique, or invention, by enhancing functionality, performance, reliability, or quality.
Resolving Uncertainty
The work must address technical uncertainties, such as determining the optimal design, method, or approach to achieve the desired outcome. The results should not be known in advance.
Systematic Experimentation
Eligible research must follow a structured experimentation process, including trial and error, modeling, simulation, or testing alternatives to reach the intended improvement.
Technological Basis
The activity must rely on hard sciences such as engineering, physical or biological sciences, or computer science. Artistic, social science, or routine data collection work does not qualify.
Why the R&D Tax Credit Matters ?
Since 1981, the R&D Tax Credit has helped businesses save billions in federal and state taxes. The credit enables companies to hire more staff, expand R&D, invest in facilities, and drive innovation. Thousands of businesses across multiple industries take advantage of this benefit each year.