New York Excelsior Jobs Program — R&D Tax Credit
Empire State Development (ESD)
50% of federal §41; 6% cap
NY's performance-based R&D incentive
New York's Excelsior Jobs Program awards a package of up to four fully refundable tax credits to businesses in nine strategic industries that commit to job creation or retention targets and negotiate a performance schedule with ESD. The R&D component — 50% of the portion of a company's federal §41 credit attributable to New York R&D expenditures, capped at 6% of those expenditures — is only available alongside the Jobs and Investment credits. Credits are claimed annually over up to 10 years once ESD issues a Preliminary Schedule of Benefits.
- Funding type
- Tax Credit
- Level
- State
- Amount
- R&D Tax Credit: the lesser of (a) 50% of the portion of the company's federal §41 research and development credit attributable to qualified New York R&D expenditures, or (b) 6% of those expenditures. Enhanced rates apply for semiconductor supply chain participants (up to 7%) and Green CHIPS projects (up to 8%). The R&D credit is one component of a four-part Excelsior package that also includes a Jobs Tax Credit (up to 6.85% of wages for net new jobs), an Investment Tax Credit (2% of qualified investment), and a Real Property Tax Credit (for distressed-area or regionally significant projects). All Excelsior credits are fully refundable. Benefit period: up to 10 years.
- Realistic amount
- A New York life-sciences company generating a $200,000 federal §41 credit on $500,000 of NY-located research wages would…
- Deadline
- Rolling — contact ESD Industry Director or submit via NY Consolidated Funding Application; no fixed annual deadline
- Status
- active
- States
- NY
- Payment model
- tax offset
Who qualifies
- Business must operate in one of nine Excelsior strategic industry categories: Scientific Research & Development, Software Development, Life Sciences, Financial Services (back-office operations), Agriculture, Manufacturing, Distribution, Music Production, or Entertainment
- Must create or retain a threshold number of net new full-time jobs: 5 for Scientific R&D / Software / Life Sciences / Agriculture / Manufacturing / Music Production; 25 for Financial Services back-office / general back-office operations; 50 for Distribution; 100 for Entertainment; 150+ with at least $3M investment for firms outside the listed strategic industries
- Retention-eligible alternative: manufacturing companies with 5+ existing employees making a significant capital investment, or strategic industries with 25+ employees facing documented economic distress, may qualify under the retention track
- Must be incorporated or otherwise organized as a legal business entity — sole proprietors typically do not qualify
- Must have or plan qualifying New York-located operations — research, manufacturing, or operations must occur within New York State
- Must claim the federal §41 R&D tax credit to access the Excelsior R&D component (the NY R&D credit is calculated as 50% of the federal §41 credit attributable to NY expenditures)
- Must maintain compliance with New York tax obligations and agree to submit annual performance reports to ESD
- Firms must agree to a negotiated Preliminary Schedule of Benefits that specifies job and investment targets — these become binding performance commitments
Hard requirements
- Must be incorporated
What it covers
Eligible expenses
- New York-located employee wages for qualified research activities meeting the federal §41 four-part test (technological uncertainty, process of experimentation, technological in nature, aimed at developing/improving a business component)
- New York-located employee wages for direct supervision and direct support of qualified research
- Supplies physically consumed or destroyed during qualified research conducted in New York
- Rental costs for equipment and computer usage for qualified research performed in New York State
- 65% of payments to New York-based contract research organizations for qualified research
- Basic research payments to New York universities or qualified research consortia (same as federal §41 basic research category)
- Qualified capital investment in property, plant, and equipment located in New York (for the Investment Tax Credit component — separate from R&D eligible expenses)
Ineligible expenses
- Research activities conducted outside of New York State — the R&D credit applies only to NY-located research expenditures
- Research funded by a third party (government contracts, client-reimbursed R&D — mirrors the federal §41 funded-research exclusion)
- Research in social sciences, humanities, arts, or market research
- Management and administrative overhead not directly tied to qualifying research activities
- Post-commercialization quality control testing and adaptation to customer specifications
- Capital equipment costs (only rental or usage costs qualify; depreciation and ownership costs do not)
- Wages of employees located out of state, even if working remotely for a New York employer
- Any expense already used to compute the R&D component for which ESD has not authorized the R&D credit in your Preliminary Schedule of Benefits — if ESD did not include R&D credit in your negotiated benefit package, no R&D credit can be claimed regardless of qualifying expenditures
How to apply
-
1
Confirm strategic industry eligibility and minimum job threshold
Verify your NAICS code maps to one of the nine Excelsior strategic industry categories and that your planned growth meets the applicable job-creation minimum (as low as 5 net new jobs for R&D, software, and life sciences companies). This pre-screen takes 30 minutes with the ESD industry classifications list. Businesses that do not fall into a strategic industry can still apply if they plan to create at least 150 net new jobs and invest a minimum of $3M — a much higher bar.
~1 hrs
-
2
Contact ESD Industry Director or submit via the CFA portal
Reach out to the ESD Industry Director for your sector or the ESD Regional Office covering your location, or complete the Consolidated Funding Application (CFA) at apps.cio.ny.gov/apps/cfa. The CFA submission initiates ESD's review. Have ready: business legal name and entity type, primary NAICS code, current NY employee count, planned net new jobs (count and projected wages), planned capital investment, and a description of R&D activities if claiming the R&D credit component. There is no application fee.
~8 hrs
-
3
ESD project review and benefit negotiation
ESD staff conduct a due-diligence review of the application and perform a benefit-cost analysis. If the project advances, ESD negotiates the Preliminary Schedule of Benefits — a year-by-year table specifying the maximum credit amounts for each of the four components over the benefit period (up to 10 years). The negotiation determines which credit components you are approved for, the job and investment targets you must hit each year, and the credit amounts you are eligible to claim if you meet those targets. This phase typically takes 2–4 months.
~20 hrs
-
4
Receive Certificate of Tax Credit and begin performance period
Upon approval, ESD issues a Certificate of Tax Credit and the finalized Preliminary Schedule of Benefits. This certificate does NOT guarantee you will receive the credits — it establishes your eligibility and maximum credit amounts conditional on performance. The performance period (up to 10 years) begins, during which you must create/retain the agreed jobs and make the agreed investments each year.
~2 hrs
-
5
File annual ESD Performance Report
Each year during the benefit period, file the ESD Performance Report Workbook documenting actual job counts, wages, and investment levels against the targets in your Preliminary Schedule of Benefits. ESD determines how much of the scheduled credit you have earned based on your actual performance. Partial credit is possible — if you hit 80% of your job target, you may receive approximately 80% of the year's scheduled credit. If you fall below threshold minimums, that year's credit may be withheld entirely.
~15 hrs
-
6
Claim earned credits on New York State tax return
After ESD validates performance, claim the earned Excelsior credits on your New York State tax return using Form CT-606 (corporations) or IT-606 (pass-throughs and individuals). Because the credits are fully refundable, they will generate a tax refund if they exceed your NY tax liability — no carryforward needed. For the R&D component, you must also have claimed (or simultaneously claim) the federal §41 credit on Form 6765 and be able to attribute a portion of that credit to NY-located research expenditures.
~6 hrs
Industry & certifications
NAICS codes: 541711, 541712, 541511, 541512, 325412, 332000, 311000, 522000, 512000, 512200, 423000
The Excelsior R&D credit is bundled — ESD won't approve it in isolation. You must first qualify for the Jobs Tax Credit (minimum 5 net new jobs for tech/life sciences); R&D is added only if you also have qualifying federal §41 research in NY. Refundability is a genuine advantage: unlike CA and federal credits, Excelsior generates actual cash refunds even for pre-profit companies. The Green CHIPS track offers up to 8% R&D credit but requires $3B investment — out of reach for most SMBs.
Deadline & timing
The Excelsior Jobs Program accepts applications on a rolling basis year-round. Businesses initiate contact with the appropriate ESD Industry Director (by sector) or an ESD Regional Office (by geography), or submit through New York's Consolidated Funding Application (CFA) portal at apps.cio.ny.gov/apps/cfa. There is no fixed application window — unlike many state incentive programs. After ESD review and negotiation, approved businesses receive a Certificate of Tax Credit and a Preliminary Schedule of Benefits specifying the credit amounts claimable in each year of the benefit period. Credits are then claimed annually on the company's New York State tax return using Form CT-606 (corporations) or IT-606 (individuals/pass-throughs).
Programs that stack well
Related programs
Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.