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

Form IT-645, Recapture of START-UP NY Tax Benefits, is issued by the New York State Department of Taxation and Finance. It’s used by businesses that participated in the START-UP NY program but no longer qualify for the tax breaks they previously claimed. If your business received income tax benefits under START-UP NY and later fell out of compliance with the program’s requirements, this form is how New York claws back that value.

The START-UP NY program was created to encourage businesses to locate or expand near New York’s public and private universities. Participating companies can receive significant tax benefits, including exemptions from state and local income taxes, as long as they meet job creation and other program conditions. When a business exits the program early, fails to meet its job commitments, or otherwise violates the terms of its agreement with a sponsoring university, the state requires that some or all of the previously claimed tax benefits be repaid. That repayment process runs through Form IT-645.

Who Needs to File Form IT-645

You need this form if your business was approved to participate in START-UP NY and later became subject to recapture because of one of the following situations:

• The business voluntarily left the START-UN NY program before its benefit period ended.
• The sponsoring university revoked the business’s eligibility.
• The business failed to meet net new job requirements outlined in its agreement.
• The business relocated outside the approved tax-free area.

This applies to corporations, partnerships, and individual owners of pass-through entities that benefited from START-UP NY tax exemptions. If you’re unsure whether your business triggered a recapture event, your program agreement with the sponsoring university will typically spell out the specific conditions that require repayment.

When Form IT-645 Is Used

Form IT-645 is filed with your New York State income tax return for the tax year in which the recapture event occurred. For tax year 2025 filings, that means attaching this form to your corporate franchise tax return, personal income tax return, or partnership return, depending on how your business is structured. The form calculates the amount of previously exempted tax that now must be added back to your taxable income or included as an addition to tax.

Timing matters here. The recapture isn’t retroactive to every year you participated in START-UP NY — it’s tied to the specific tax year when you stopped qualifying. If your business exited the program partway through 2025, you’ll use this form when filing your 2025 New York return, even if you filed as a START-UP NY participant in prior years without issue.

How to Get and Complete the Form

Form IT-645 is a fillable PDF (AcroForm), meaning you can type your information directly into the fields on your computer before printing or submitting it as an attachment to your electronic filing. You’ll need details from your original START-UP NY approval documents, including the tax benefit period, the specific benefits claimed in prior years, and documentation showing why and when the recapture event occurred.

The form walks through calculating the recapture amount based on the benefits you received and the portion of the benefit period that has elapsed. Businesses with more complex situations — multiple benefit types, partial-year participation, or shared ownership structures — often work with a tax professional familiar with New York’s economic development programs to get these calculations right.

If your business also deals with depreciation schedules or elective pass-through entity taxes in other states, resources like the guide on California depreciation and amortization for LLCs or the explanation of the pass-through entity elective tax payment voucher can help you understand how similar recapture and add-back mechanisms work in other jurisdictions. And if penalties end up attached to a recapture situation, it’s worth reviewing how other states handle penalty relief, such as the process described for requesting relief from tax penalties in California.

Once completed, Form IT-645 gets submitted along with your applicable New York State tax return for the year the recapture applies. Keep copies of your original START-UP NY certification and any correspondence with your sponsoring university, since the Department of Taxation and Finance may request supporting documentation to verify the recapture calculation.