Form IT-603: Claim for EZ Investment Tax Credit and EZ Employment Incentive Credit (Tax Year 2025)

Form IT-603 is how New York State businesses operating inside an Empire Zone claim two related tax breaks: the EZ Investment Tax Credit and the EZ Employment Incentive Credit. It’s issued by the New York State Department of Taxation and Finance, and it applies to corporations, partnerships, and individual business owners who have made qualifying investments in property or equipment used within a designated Empire Zone.

The form is really doing two jobs at once. The first part calculates the investment credit itself, which rewards businesses for putting money into tangible property — buildings, machinery, equipment — that’s principally used in manufacturing, production, or certain other qualifying activities within the zone. The second part, the employment incentive credit, is only available if you claimed the investment credit (or its EZ predecessor) in a prior year and your average employment number has grown since then. In other words, the incentive credit is a reward layered on top of the investment credit for businesses that keep adding jobs, not just capital.

Who Actually Needs This Form

You’ll need Form IT-603 if your business is certified under New York’s Empire Zone program (or is grandfathered into it from an earlier designation) and you placed qualifying property in service during the tax year. This includes manufacturers expanding a facility, businesses upgrading production equipment, and companies that have maintained or grown their zone-based workforce after already claiming an EZ credit in a previous filing.

It’s worth noting that the Empire Zone program itself has largely sunset for new certifications, so most filers using IT-603 today are businesses with existing certifications continuing to claim credits tied to property placed in service years ago, or recapture situations where previously claimed credits need to be adjusted because property was disposed of early or no longer qualifies.

When to File It

Form IT-603 gets attached to your regular New York State income tax return for the year you’re claiming the credit — whether that’s a corporate franchise tax return, a personal income tax return, or a partnership return. There’s no separate filing deadline; it simply rides along with whatever return you’re already required to submit for that tax year. If your business is part of a partnership or S corporation, the credit typically flows through to individual owners, who then need their own copy of the form to claim their share.

If you’re also filing for the related QEZE Tax Reduction Credit on Form IT-604, keep in mind these are separate incentives with their own eligibility rules, even though both stem from Empire Zone participation. Some businesses qualify for one but not the other, depending on certification dates and the specific benefits tied to their zone designation.

How to Get and Complete the Form

The form is a fillable PDF (AcroForm), meaning you can type your entries directly into the document using standard PDF software before printing or attaching it to your e-filed return. You’ll need your Empire Zone certification number, details on the qualifying property (cost, date placed in service, useful life), and — if claiming the employment incentive portion — employment figures from the base year and the current year to show the required increase.

Because the calculations involve depreciation schedules and multi-year comparisons, it helps to have your prior years’ filings on hand, especially if you’re carrying forward unused credit or dealing with a recapture situation. Businesses that also deal with passive activity limitations on other investments might find it useful to compare how federal treatment differs from state credits — a distinction covered from the federal side in guides like the Passive Activity Loss Limitations guide for Form FTB 3801, though that’s a California form and not directly interchangeable with New York rules.

Once completed, IT-603 doesn’t get filed on its own — it’s submitted alongside your main New York return, and the credit amount calculated on the form transfers to the appropriate credit line on that return. If you’re unsure whether your zone certification is still active or whether specific property qualifies, checking with the Department of Taxation and Finance directly before filing can save you from a rejected credit claim later.