Applications for the 2024 NYC Biotech Tax Credit Are Due by January 15

At a glance

• The main takeaway: The deadline to apply for the NYC Biotech Tax Credit is rapidly approaching, with final applications due to the New York City Council Department of Finance by January 15, 2025.
• Impact on your business: Qualifying biotech companies can receive an annual refundable credit of up to $250,000, so it’s important to assess your eligibility and file your application as soon as possible.
• Next steps: Don’t leave money on the table. Contact Aprio’s Technology Team for help with filing your application before the deadline.

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The full story:

The clock is ticking for New York City-based companies in the biotechnology sector to take advantage of a major tax provision, which could potentially result in more than $200,000 in savings per year.

The NYC Biotech Tax Credit was reinstated by Mayor Eric Adams last December, after it lapsed in 2019. The credit was first introduced as part of a larger package of economic programs, designed to bolster the growth of small life-science companies by alleviating the burden of substantial startup expenses — such as those tied to research, incubator facilities, and clinical trials. Importantly, the credit promotes job expansion in New York City and stimulates growth in connected sectors.

Under the provision, eligible companies can receive an annual tax credit of up to $250,000, with a total pool of $3 million distributed by the New York City Council Department of Finance each year. The Department will decide how to distribute the overall credit amount among qualifying businesses.

What are the eligibility requirements?

There are six specific requirements all organizations must fulfill to be eligible for the Biotech Tax Credit. Your business must:

1. Operate in the biotechnology sector.
2. Meet at least one of the following criteria:
   1. Maintain a research and development (R&D) expenditure to net sales ratio that meets or surpasses the average reported by the National Science Foundation.
   1. Focus on developing products or services categorized as emerging technologies.
3. Employ no more than 100 full-time staff members, with a minimum of 75% of employees located in New York City.
4. Ensure R&D spending equals or exceeds 6% of net sales.
5. Generate annual product sales of $10 million or less.
6. Report gross revenues (including those generated by affiliates and associated entities) not exceeding $20 million for the previous year.

How do businesses apply for the NYC Biotech Tax Credit?

All applications for the credit are due to the New York City Council Department of Finance by January 15, 2025. Eligible expenses under the credit provisions include the purchase of property, research, and employee training costs. If your company meets the requirements listed above, you can start the application process here.  

Please note that you must register to file a business tax return first before you can fill out and complete your application for the Biotech Tax Credit. If your business is a subsidiary of a consolidated group, each entity can file for the credit separately if they qualify and must register under their own EIN.

Final takeaways

The NYC Biotech Tax Credit applies to taxable years spanning from January 1, 2023, to December 31, 2025. If your business meets the eligibility criteria, you can claim the credit for up to three consecutive tax years.

Moreover, if the credit surpasses your tax owed for the current year, you can either refund the credit or carry it forward to offset taxes in the following year. For more information on what classifies as eligible expenses and emerging technologies under the credit, refer to the FAQ section on the Department of Finance’s website.

The bottom line

The NYC Biotech Tax Credit presents local businesses with extra funding to fuel growth, emerging technologies, and products that will benefit the community for generations to come. Aprio’s Technology Team supports companies at the forefront of biotech innovation, providing the technical knowledge, guidance, and strategic advice they need to reach the next level of their growth journey.

If you want to learn more about the Biotech Tax Credit or need help filing your application before the January 15 deadline, please contact our team today.

Related Resources

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