New York Biotechnology and Life Sciences R&D Tax Credits: Key Opportunities and Deadlines

There are two lucrative and refundable NY programs with deadlines approaching. NYC’s biotech credit has a January 15 deadline and may offer up to $250,000. And New York State Life Science R&D credit with $500,000 potentially available and awarded on a first-come, first-served basis.  

New York City Biotechnology Tax Credit 

The NYC Biotechnology Tax Credit is designed to encourage early-stage biotechnology companies to locate and grow within New York City. Each eligible company is entitled to a refundable credit of up to $250,000 per year, with a total of $3,000,000 available annually. The New York City Council Department of Finance will determine how to allocate the aggregate amount of the Credit among eligible companies. The application deadline to claim the Credit for the 2025 calendar year is January 15, 2026. 

Eligibility Requirements 

To qualify as a Qualified Emerging Technology Company (QETC), a company must meet all of the following:  

1. Be engaged in biotechnology 
   – Involves scientific manipulation of living organisms or related activities improving health, life sciences, diagnostics, therapeutics, biological processes, etc 
   
   
2. Meet one of these innovation standards: 
   a. Have an R&D-to-net-sales ratio equal to or exceeding the national average (as measured by the National Science Foundation), or 
   b. Have primary products or services classified as emerging technologies.  
   
   
3. Employee size and location: 
   a. 100 or fewer full-time employees, with at least 75% based in NYC.  
   
   
4. R&D Intensity: 
   a. R&D expenses must be at least 6% of net sales.  
   
   
5. Revenue limits: 
   a. Annual product sales not more than $10 million.  
   b. Gross revenues (including affiliates) not more than $20 million in the prior year.  

What Costs Qualify & How the Credit Is Calculated 

The credit is based on three categories of qualifying costs:  

1. R&D Property: 
   – 18% of the cost of R&D property purchased and placed in service during the year.  
2. Qualified Research Expenses: 
   – 9% of qualified R&D expenses paid or incurred in the calendar year.  
3. Employee High-Tech Training: 
   – 100% of training costs for eligible high-tech biotech courses (up to $4,000 per employee annually).  

Maximum Credit & Refundability 

• Per taxpayer limit: Up to $250,000 per year for each QETC.  
• Refundable: If the credit exceeds your current year’s NYC tax liability, the excess can be refunded or carried to the next year.  
• Annual cap on program: NYC allocates a total of up to $3 million in biotech credits each year. If applications exceed this amount, credits are allocated proportionally among eligible taxpayers. 

Deadlines & Filing Windows 

• Application Deadline: Submit the biotech credit application by January 15 following the calendar year for which the credit is claimed.  
  
  • For example, applications for the 2024 tax year must be filed by January 15, 2025.  
• Taxable Year Validity: The credit is available for tax years with taxable periods beginning January 1, 2023, through December 31, 2025, and can be claimed for a maximum of three consecutive tax years.  

New York State Life Sciences R&D Tax Credit  

The New York State Life Sciences R&D Tax Credit is a refundable state tax credit of up to $500,000 per year per qualified company designed to support new life sciences companies that perform qualified research and development within New York State. It is administered by Empire State Development (ESD) and claimed on state tax returns once certified.  

Eligibility Criteria 

To qualify, a business must: 

1. Be a “new business” — generally meaning it has not been a qualified life sciences company in NYS for more than five years and is not substantially similar in ownership/operations to an existing company. 
2. Be certified by ESD as a qualified life sciences company before claiming the credit. 
3. Incur qualified R&D expenses in New York State during the tax year. 
4. Receive a certificate of tax credit from ESD specifying the credit amount and tax year.  

“Life sciences” includes sectors such as: 

• biopharmaceuticals 
• medical diagnostics and devices 
• genomics and proteomics 
• biomedical engineering 
• stem cell research 
• regenerative medicine 
• biological sciences and related fields.  

Credit Amounts and Refundability 

The credit is tied to qualified research and development expenditures (QREs) incurred within New York State: 

• 15% of NY R&D expenditures for companies with 10 or more employees in the tax year 
• 20% of NY R&D expenditures for companies with fewer than 10 employees in the tax year 
  This provides a generous refundable credit for qualifying life sciences entities.  

Annual and Lifetime Limits 

• Up to $500,000 per year per qualified company 
• Total credit claimable may be limited to three consecutive years — once the company first meets eligibility and is certified by ESD.  

Refundable Benefit 

• The credit is fully refundable if it exceeds your NYS tax liability — meaning eligible companies can receive a cash refund rather than just a reduction of tax owed. 
• A certificate of tax credit from ESD is required before claiming on your tax return.  

Timing and Application Process - Application to ESD 

• You must apply to Empire State Development to be certified as a qualified life sciences company for the Life Sciences R&D Tax Credit Program. 
• Applications must include documentation showing you meet the eligibility requirements and have qualified R&D activity in New York State. 

Credits are allocated on a first-come, first-served basis as long as funds are available.