Form IT-635: New York Youth Jobs Program Tax Credit (Tax Year 2025)

Form IT-635 is how New York State employers claim the Youth Jobs Program Tax Credit on their state tax return. This credit rewards businesses that hire eligible young people, particularly those facing barriers to employment, and it’s issued by the New York State Department of Taxation and Finance for tax year 2025. If your business took part in the Youth Jobs Program and received a certificate from the Department of Labor, this is the form that turns that certificate into an actual credit on your tax filing.

The Youth Jobs Program itself is run by the New York State Department of Labor, not the Tax Department. Employers apply through the Department of Labor to certify eligible employees, generally young people between 16 and 24 who meet certain criteria such as being unemployed, receiving public assistance, or facing other employment barriers. Once the Department of Labor approves an employer’s participation and issues a Certificate of Tax Credit, that certificate becomes the basis for what gets reported on Form IT-635.

Who needs this form? Any business, corporation, partnership, or individual taxpayer operating in New York State that hired a certified youth employee and received a certificate from the Department of Labor for tax year 2025. This includes C corporations, S corporation shareholders, partners in partnerships, and sole proprietors, since the credit can flow through to individual owners depending on the business structure. If you never went through the Department of Labor certification process, you can’t claim this credit, no certificate means no eligibility for the credit amount on this form.

The form is used when filing your annual New York State tax return for the year in which the credit was earned. The credit amount itself is determined by the certificate issued by the Department of Labor, which specifies the qualifying wages paid and the corresponding credit percentage based on factors like whether the employment was full-time or part-time and how long the employee worked. Form IT-635 asks you to transfer those certified figures onto your tax filing, calculate the total credit, and if applicable, carry forward any unused portion to future tax years.

Filling out the form requires having your Department of Labor certificate in hand before you start. The form itself has an AcroForm structure, meaning it’s digitally fillable, so you can type your information directly into the PDF fields rather than printing and writing by hand. You’ll need your certificate number, the employer identification information, the qualifying wage amounts listed on your certificate, and the credit calculation as specified by the Department of Labor’s documentation. Double-check that the figures you enter match exactly what’s on your certificate, since discrepancies are one of the most common reasons these credit claims get flagged during review.

This credit is one of several New York State workforce and economic development incentives available to employers, and it often gets confused with similar-sounding programs. If your business is also involved in facility redevelopment projects, you might want to look at Form IT-633 for the Economic Transformation and Facility Redevelopment Program Tax Credit, which serves a different set of businesses under a separate certification process. Employers focused on retaining jobs rather than creating new youth positions should instead check out Form IT-634 for the Empire State Jobs Retention Program Credit, which applies to businesses maintaining employment levels in specific circumstances.

Once you’ve completed Form IT-635, it gets attached to your main New York State tax return, whether that’s a corporate franchise tax return, a partnership return, or a personal income tax return depending on your business structure. Keep your Department of Labor certificate and any supporting payroll records on file, since the Tax Department can request documentation to verify the credit amount claimed. If you’re unsure whether your business structure allows the credit to pass through to individual owners, it’s worth reviewing the specific instructions that accompany the form or consulting with a tax professional familiar with New York’s employer credit programs before submitting your return.