Qualified Emerging Technology Company Incentives

New York State, in an effort to stimulate the development of “next-gen” technology companies in the State, offers a number of tax incentives for companies conducting research and development in emerging technologies. The credits are available for firms who are certified as “qualified emerging technology companies” as well as for investors in such certified firms.

Awards are based on research and development expenses, jobs created, and overall expenses for facilities, operations and training. Qualifying expenses include expenditures on equipment and property used for R&D, R&D employee salaries, patent and IP protection costs (excluding litigation), travel related to R&D, and company overhead on R&D activities.

You could receive from nine to 18 percent of your total eligible expenses as a tax credit; if you pay no taxes you will receive a check directly from the State.

Do you qualify?

EFP Rotenberg has significant experience in determining QETC eligibility for clients, which is not always clear cut. We have found many instances where companies wrongly considered themselves “not qualified” and were missing out on the tax credits. In general, these tax credits are underutilized by New York State companies. Here are the general rules for eligibility. 

Small businesses:

• You must have annual revenues of less than $10 million.
• You can also have NO revenue, not unusual for a start-up company.

Investors:

• You must have made an investment in a qualified emerging technology firm.

In emerging technology industries:

At first glance, it would seem that only the most “space age” technologies would apply. But that’s not the case; a wide range of industries are eligible. Here are just some of them. Don’t count yourself out if you don’t see your industry on this list; contact us and we can check your specific eligibility.

• biotechnology
• new media
  
• electronics and photonics
  
• software development
  
• defense technology
  
• alternative energy technology
  
• advanced materials and processing technology
  
• “green” technology
  
• information and communication technology
  
• medical devices
  
• remanufacturing technology
  
• transportation technology
  

With R&D expenses:

The firm must spend at least 3.6 percent of its revenue within New York State on research and development (R&D) expenses.

The next step: understand what you might gain

We suggest a preliminary consultation with one of our experts on emerging technology companies. This meeting is free of charge and does not obligate you to anything. We’ll review your most recent federal and State returns with you, help you determine your eligibility and estimate the potential tax credits that can be pursued. We’ll provide you with an estimate of our time to prepare your initial qualification documents and the annual calculations and claim forms.

Don’t miss out

There are a number of different categories of tax credits—an employment credit, a capital credit, and a facilities, operations and training credit. They can overlap in application and be confusing as to what the law allows. In our experience, the forms and instructions provided by the State don’t always tell the whole story, and it’s easy for companies to miss an opportunity. We can help.

More tax experts, more tax expertise, more tax clients, and a passion for the future

We’ve assembled the largest team of dedicated tax experts among the region’s locally owned firms. That means you benefit from the talents of people who know the tax code through and through, at a rate that’s more Main Street than Wall Street

We have completed scores of QETC applications on behalf of clients; we cheer with them when they receive the checks or refunds that allow them to accelerate their R&D investments. We recognize that your company is the lifeblood of our community’s future, and we’re pleased to be a part of it.