Form IT-645 Instructions: Recapture of START-UP NY Tax Benefits (Tax Year 2025)

Form IT-645, Recapture of START-UP NY Tax Benefits, is a New York State tax form used by businesses that participated in the START-UP NY program but no longer qualify for the tax benefits they previously claimed. The instructions document IT645I explains how to calculate and report this recapture on your New York State tax return for tax year 2025.

The START-UP NY program allows businesses located within designated tax-free areas, usually affiliated with a college or university, to claim significant tax breaks including exemptions from income tax, sales tax, and other business taxes. In exchange, participating businesses agree to meet specific requirements tied to job creation, business location, and continued operation within the tax-free area. When a business fails to meet these conditions, or when it exits the program before fulfilling its commitments, New York State requires it to pay back some or all of the tax benefits it received. That’s exactly what Form IT-645 addresses.

Who Needs to File Form IT-645

You need this form if your business previously participated in START-UP NY and one of the following situations applies to you during the 2025 tax year:

• Your business relocated outside the designated tax-free area before the end of your benefit period.
• You failed to meet the job creation or retention requirements outlined in your business agreement with the sponsoring university or college.
• Your business was decertified from the START-UP NY program by Empire State Development or another authorized body.
• You otherwise became ineligible for the tax benefits you had been claiming under the program.

If none of these situations apply and your business remains in good standing with the program, you won’t need to file this recapture form. It only comes into play when benefits previously granted must be reversed.

When Form IT-645 Is Used

Form IT-645 is filed alongside your annual New York State tax return for the year in which the recapture event occurred. If your business lost eligibility partway through 2025, you’ll use these instructions to determine how much of the tax benefit needs to be recaptured and how to report that amount properly on your return. The recapture is generally calculated based on the specific tax benefits claimed in prior years and the portion of the benefit period during which the business remained noncompliant or ineligible.

Because the calculations can involve multiple tax types, including personal income tax and corporation franchise tax depending on your business structure, it’s worth reviewing the instructions carefully before starting. The form walks through each recapture scenario separately, so you’ll want to identify which situation applies to your business before filling out the corresponding sections.

How to Get and Complete Form IT-645

Form IT645I is available directly from the New York State Department of Taxation and Finance. This particular instructions document does not have fillable digital fields, so you’ll need to print it out and complete it by hand once you’ve reviewed the applicable sections. The same applies to the corresponding IT-645 form itself, which should be printed and filled in manually before attaching it to your paper return or including it with your electronic filing package as required.

When completing the form, gather your prior START-UP NY certification documents, the tax benefit amounts you claimed in previous years, and any correspondence from Empire State Development regarding your program status. These records will help you accurately calculate the recapture amount required for each affected tax year.

Businesses navigating other START-UP NY related credits may also find it useful to review the instructions for the START-UP NY Telecommunication Services Excise Tax Credit, since businesses in the program often deal with multiple related forms simultaneously. Similarly, if your business also claimed the Employee Training Incentive Program credit, the Form IT-646 instructions cover a separate but related area of New York’s economic development tax incentives. And for businesses that also dealt with recovery-related credits, the Form IT-651 instructions offer additional context on how New York structures its recapture and credit recovery rules.

Given the complexity of recapture calculations and the potential for multiple tax years to be affected, many businesses choose to work with a tax professional familiar with START-UP NY compliance when completing this form.