Form IT-251: New York Credit for Employment of Persons with Disabilities (Tax Year 2025)

Form IT-251 is a New York State tax form that lets eligible employers claim a credit for hiring individuals with disabilities. It’s issued by the New York State Department of Taxation and Finance and applies to businesses, sole proprietors, partnerships, and certain corporations that meet the state’s employment criteria for this credit during the tax year.

The credit is designed to offset a portion of wages paid to qualifying employees with disabilities, encouraging businesses across New York to hire from this workforce pool. It’s separate from the federal Work Opportunity Tax Credit, though some employers end up qualifying for both, so it’s worth checking your eligibility for each program independently rather than assuming one excludes the other.

Who Needs Form IT-251

You need this form if you’re a New York taxpayer who employed one or more qualified individuals with disabilities during 2025 and paid wages that meet the state’s threshold requirements. This typically includes small business owners, LLC members, S corporation shareholders, and partners in partnerships that hired eligible employees. The employee generally needs to have a certified disability recognized under the program guidelines, and the employer must have retained them for a minimum period specified in the instructions.

Corporations claim this credit differently than individuals, so if your business is structured as a C corporation, you’ll want to confirm which specific tax return and schedule applies to your situation before assuming IT-251 is the correct form. Sole proprietors and pass-through entity owners are the most common filers of this particular form.

When to Use IT-251

You file Form IT-251 along with your New York State personal income tax return for the year in which you paid the qualifying wages. For tax year 2025, that means submitting it with your 2025 state return during the regular filing season. If you’re claiming the credit as a partner or shareholder in a pass-through entity, you’ll need documentation showing your share of the credit as calculated at the entity level before you can complete your individual portion of the form.

Keep in mind that tax credits like this one usually require supporting documentation, including proof of the employee’s certified disability status and payroll records showing wages paid during the qualifying period. The Department of Taxation and Finance can request this documentation later, so hold onto it even after you’ve filed.

How to Fill Out and File the Form

Form IT-251 is available as a fillable PDF directly from the New York State Department of Taxation and Finance website. Since it includes AcroForm fields, you can complete it digitally on your computer before printing it for submission or attaching it to an electronically filed return, depending on your filing method.

The form asks for basic identifying information, the number of qualifying employees, wage calculations, and the resulting credit amount. Double-check the wage caps and calculation percentages listed in the instructions each year, since these figures are occasionally adjusted and using outdated numbers from a prior year’s form can lead to an incorrect credit claim.

Once completed, attach IT-251 to your New York State income tax return rather than filing it separately. If you’re also managing filings in other states, resources like our breakdown of California’s fiduciary income tax return or the guide to California LLC return of income can help if you have business operations spanning multiple jurisdictions.

Employers who plan to claim this credit every year should build a habit of collecting the required disability certification paperwork at the time of hire, rather than scrambling for it at tax season. This saves time and reduces the risk of a delayed or denied credit due to missing documentation. If your household also files under different filing statuses in other states, it can help to compare rate tables such as the one covered in our California 2EZ table for Head of Household filers to understand how credits and deductions interact differently state by state.

Because this credit is state-specific and tied to New York’s own definitions of qualifying disability and employment terms, always refer to the current year’s instructions published alongside the form rather than relying on prior-year figures or assumptions carried over from federal credit programs.