State R&D Tax Credits

New York

Credit Name: No R&D Credit per se, but QETC facilities, operations, and training credit is similar.

Expiration Date: 1/21/2012

Does it apply to C corps and pass-through entities?: Yes, however to claim this credit the corporation, individual, sole proprietorship, partnership, or S corporation must:

  • be a QETC as defined in section 3102‑e of the Public Authorities Law (PAL);
  • have 100 full-time employees or less, with at least 75% of those employees employed in New York State;
  • have a ratio of research and development funds to net sales which equals or exceeds six percent (6%) during its tax year; and
  • have gross revenues, along with the gross revenues of its affiliates and related members, that did not exceed twenty million dollars for the immediately preceding tax year.

Credit Carry forward: N/A

Description: The amount of credit is the sum of the following amounts (or pro rata share of the sum, in the case of a partnership):

  • 18% of research and development property, costs, and fees incurred in connection with emerging technology activities;
  • 9% of qualified research expenses paid or incurred by the taxpayer during the tax year; and
  • 100% of qualified high-technology training expenses paid or incurred by the taxpayer, limited to $4,000 per employee per year.

Qualified research expenses mean expenses associated with in-house research and processes, and costs associated with the dissemination of the results of the products that directly result from such research and development activities. Such costs do not include advertising or promotion through media.

For purposes of the qualified research expenses component, include costs associated with the preparation of patent applications, patent application filing fees, patent research fees, patent examination fees, patent post allowance fees, patent maintenance fees, and grant application expenses and fees.

Do not include any expenses for litigation or the challenge of another entity’s intellectual property rights, or for contract expenses involving outside paid consultants.

Other Notes: The total amount of credit allowable to a taxpayer cannot be more than $250,000 per year.

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