Form IT-668: New York Semiconductor Research and Development Credit (Tax Year 2025) Explained

Form IT-668 is the New York State tax form businesses use to claim the Semiconductor Research and Development Credit. It’s issued by the New York State Department of Taxation and Finance and applies to Tax Year 2025. If your company invests in semiconductor research and development activities within the state, this credit can meaningfully reduce your New York tax liability.

The Semiconductor Research and Development Credit was created to encourage companies to conduct qualified R&D related to semiconductor technology in New York rather than elsewhere. New York has been pushing to build out its semiconductor manufacturing and innovation sector, and this credit is one of the financial incentives tied to that effort. Businesses that participate in qualifying research activities, whether independently or as part of a larger consortium or partnership, may be eligible to claim a percentage of their qualified R&D expenditures as a credit against their state tax bill.

Who Needs Form IT-668

This form is intended for corporations, partnerships, and other business entities that have incurred qualified research and development expenses tied to semiconductor technology within New York State during the 2025 tax year. This typically includes companies working on chip design, fabrication processes, materials research, or related engineering work that meets the state’s definition of qualified research.

If you’re a sole proprietor, partner, or shareholder in a business that qualifies, you may also need to complete this form to claim your share of the credit, depending on how the entity passes through tax benefits to its owners. Businesses that received certification or approval tied to a semiconductor development program in New York should pay close attention to this form, since eligibility is often connected to prior state designation or program participation.

When Is Form IT-668 Used

You’ll use Form IT-668 when filing your annual New York State tax return for the 2025 tax year, alongside your primary income tax or corporation franchise tax form. The credit doesn’t stand on its own — it needs to be attached to your regular filing so the state can apply it against your calculated tax liability. If your business is part of a partnership or S corporation, the entity will typically calculate the credit at the entity level and then pass the appropriate share to individual partners or shareholders, who report it on their own returns.

Timing matters here. The qualified research expenses need to fall within the tax year you’re filing for, and you should keep documentation showing how those expenses meet the state’s definition of qualified semiconductor R&D. If you’re unsure whether your specific project qualifies, it’s worth reviewing the instructions that accompany the form or consulting with a tax professional familiar with New York’s economic development credits.

How to Get and Complete Form IT-668

Form IT-668 is available as a fillable PDF directly from the New York State Department of Taxation and Finance website. Since it uses AcroForm fields, you can type your information directly into the PDF using standard software like Adobe Acrobat Reader before printing or submitting it electronically with your return.

When filling it out, you’ll generally need to provide identifying information about your business, a breakdown of qualified research and development expenditures related to semiconductor work, and the calculation that determines your credit amount. Double-check any figures against your internal R&D records, since the state may request supporting documentation if your return is reviewed.

This credit is one of several New York offers to businesses in emerging or targeted industries. If your company is also involved in other qualifying activities, it’s worth checking related credits like the Form IT-663 Commercial Security Credit or the Form IT-660 Empire State Digital Gaming Media Production Credit, both of which follow a similar structure for claiming state-specific tax incentives. Businesses that operate across state lines might also want to compare how other states handle similar filings, such as California’s approach discussed in our overview of California FTB Form 856.

Before submitting, review the instructions carefully to confirm you’ve calculated the credit percentage correctly and included all required attachments. Filing errors on credit forms are a common reason for processing delays, so it pays to go through the numbers twice before you send in your return.