Is the New York State Life Sciences Research and Development Tax Credit Program Worth it for Startups? NO. Venture backed startups are not eligible for the New York State Life Sciences Research and Development Tax Credit Program because of their DE C-Corporation entity status; only an individual, a partnership, or an estate or trust can apply.
What is the New York State Life Sciences Research and Development Tax Credit Program?
The New York State Life Sciences Research and Development Tax Credit Program is designed to increase research and development activities within New York.
Is my startup eligible for the New York State Life Sciences Research and Development Tax Credit Program?
Your startup must be:
- A Sole Proprietorship, LLC, or S-Corporation
- Registered and approved for the credit by the Empire State Development (ESD).
- Newly incorporated (R&D happened in 2018 or later)
- Engage in life science R&D studies (biotechnology, pharmaceuticals, health robotics, genomics, etc)
What goes into the New York State Life Sciences Research and Development Tax Credit Program as a Qualified Research Expense (QRE)?
- Wages: but only for those people who engage in R&D activities within New York
- Supplies: direct supplies that were related to the R&D project and that weren’t classified as an asset, and were within New York
- Computer Leases/Rentals: within New York, such as AWS
Note that subcontractors are not included in this R&D credit, which differs from the Federal R&D tax credit.
Where Do I Apply for the New York State Life Sciences Research and Development Tax Credit Program?
First register for a certificate of tax credit by Empire State Development (ESD). Once approved, Apply for the New York State Life Sciences Research and Development Tax Credit Program on form IT 648, then file with your respective entity’s annual income tax return, eg Form 1065 for Partnerships.
How much credit will my startup receive from the New York State Life Sciences Research and Development Tax Credit Program?
Your startup will receive:
- 15% of qualifying research expenses conducted within NY, if your startup employs >10 employees
- 20% of qualifying research expenses conducted within NY, if your startup employs <10 employees
- Up to $500,000 per year for 3 consecutive years
How Does the New York State Life Sciences Research and Development Tax Credit Program Differ from the Federal Payroll R&D Tax Credit?
Like the Federal Payroll R&D Tax Credit, the New York State Life Sciences Research and Development Tax Credit Program does offer an instant gratification cash refund.
When Can I Expect to Receive My Startup’s New York State Life Sciences Research and Development Tax Credit Program?
The New York State Life Sciences Research and Development Tax Credits are disbursed on a first-come-first-serve, so it behooves you to file quickly every year.
Who Administers the New York State Life Sciences Research and Development Tax Credit Program?
The Empire State Development (ESD) board administers the New York State Life Sciences Research and Development Tax Credit Program.
Where Can I Find More Information on the New York State Life Sciences Research and Development Tax Credit Program?
If you are interested in more details or have specific questions about the New York State Life Sciences Research and Development Tax Credit Program, click here or please contact the Economic Incentives Department at (518) 292-5240 or via email at economicncentives@esd.ny.gov.
