Unlike most states, New York doesn’t offer a single, broadly available R&D tax credit. Instead, research intensive businesses can access two distinct, targeted programs, one built into the state’s flagship business incentive program and one designed specifically for the life sciences industry. Both are administered by Empire State Development and both require certification before a business can claim them.
The Excelsior Research and Development Tax Credit
The Excelsior Jobs Program is New York’s primary economic development incentive, offering five fully refundable tax credits to businesses that commit to job creation and investment in targeted industries, including scientific research and development, software development, life sciences, manufacturing, and agriculture, among others. One of those five credits is built specifically for research spending.
The Excelsior R&D credit equals 50% of the portion of a company’s federal R&D credit attributable to New York expenditures, capped at 6% of research expenditures conducted in the state. Qualified semiconductor supply chain projects can access a higher cap of 7%, and qualified green projects or Green CHIPS projects can reach 8%. Businesses claim Excelsior credits over a benefit period of up to 10 years, with Green CHIPS projects eligible for up to 20 years, but only after meeting job creation and investment thresholds specific to their industry and receiving certification from Empire State Development.
The Life Sciences Research and Development Tax Credit
For new life sciences companies specifically, New York offers a separate, fully refundable credit administered jointly by Empire State Development and the Department of Taxation and Finance. To qualify, a business must be certified as a new qualified life sciences company, must have paid or incurred qualified research expenses in New York, and must receive a certificate of tax credit from ESD before claiming it.
The credit equals 15% of New York research and development expenditures for companies with 10 or more employees, or 20% for companies with fewer than 10 employees. It’s available for up to three consecutive years and is capped at 500,000 dollars per year.
Certification Comes First
Both programs share a common thread: neither credit can simply be claimed on a tax return. Businesses must apply, demonstrate eligibility, and receive a certificate of tax credit from Empire State Development before the credit becomes usable. This makes early engagement with ESD an essential first step, not an afterthought.
Who’s Claiming It
Given the structure of these two programs, claimants cluster around a defined set of industries:
- Life sciences, including biopharmaceuticals, genomics, medical devices, and stem cell research, with particularly strong utilization in New York City’s biotech corridor
- Scientific research and development firms
- Software development
- Clean technology and green project developers
- Semiconductor supply chain manufacturing
- Manufacturing and agriculture
What This Means for Your Business
Because New York’s R&D incentives are tied to certification and, in the Excelsior program’s case, to job and investment commitments, businesses need to think about these credits as part of a broader growth or relocation strategy rather than a simple year end tax calculation. Life sciences companies in particular should evaluate the life sciences credit early, given its three year limit and its separate application path through ESD.
CSSI is committed to assisting businesses identify and defend tax savings through detailed, engineering based studies. If you’d like to know whether your New York operations qualify, request a free analysis to get started.
FAQ: New York R&D Tax Credit
Does New York have a general R&D tax credit like most states?
Not a single broad credit. Instead, New York offers the Excelsior Research and Development Tax Credit within its Excelsior Jobs Program, and a separate Life Sciences Research and Development Tax Credit for new life sciences companies.
How much is the Excelsior R&D credit worth?
50% of the New York portion of a company’s federal R&D credit, capped at 6% of in state research expenditures, with higher caps of 7% for semiconductor supply chain projects and 8% for qualified green or Green CHIPS projects.
Do I need to meet job creation requirements to get the Excelsior R&D credit?
Yes. The Excelsior Jobs Program requires businesses to meet job and investment thresholds specific to their industry before earning any of its five credits, including the R&D credit.
How much is the Life Sciences R&D credit worth?
15% of New York research expenditures for companies with 10 or more employees, or 20% for companies with fewer than 10 employees, capped at 500,000 dollars per year for up to three years.
Can I claim either credit directly on my tax return without applying first?
No. Both credits require certification from Empire State Development before they can be claimed.
Which industries typically claim these credits?
Life sciences, especially in New York City’s biotech corridor, along with scientific research and development, software development, clean technology, semiconductor manufacturing, and traditional manufacturing and agriculture.
How do I know if my business qualifies?
The best way to find out is through a professional analysis of your research activities alongside a review of Empire State Development’s certification requirements. CSSI offers a free analysis to help determine eligibility and estimate potential savings.
