Form IT-602: Claim for EZ Capital Tax Credit (Tax Year 2025)

Form IT-602 is used by businesses operating in a New York State Empire Zone (EZ) to claim the EZ Capital Tax Credit. This credit rewards companies that make qualifying investments in property, buildings, or contributions to community development projects within a designated Empire Zone. If your business has invested capital into an EZ-certified project during the 2025 tax year, this form is how you translate that investment into a reduction of your New York State tax liability.

The New York State Department of Taxation and Finance administers this credit as part of a broader set of incentives designed to encourage economic development in specific zones across the state. The Empire Zone program, while phased out for new certifications in most areas, still allows businesses with existing certifications and qualifying investments to claim credits tied to prior commitments. Form IT-602 specifically covers three types of qualifying investments: contributions to community development projects, investments in certified EZ businesses, and direct investments in qualified property located within the zone.

Who Needs to File Form IT-602

This form applies to corporations, partnerships, and individual taxpayers who hold an interest in a business certified under the Empire Zone program and who made a qualifying capital investment during the tax year. If you’re a shareholder in an S corporation or a partner in a partnership that made these investments, you’ll typically receive documentation from the entity showing your allocated share of the credit, which you then report on your own IT-602.

Businesses without EZ certification, or those whose zone certification has expired without a qualifying investment made during the certification period, generally cannot use this form. It’s worth checking your zone certification status with the Department of Taxation and Finance before assuming eligibility, since certification rules and deadlines vary by zone and by the year the business was originally certified.

When This Form Comes Into Play

Form IT-602 is filed alongside your annual New York State income or corporation tax return for the year in which you made the qualifying investment. You cannot file it as a standalone document — it needs to be attached to your primary return, whether that’s a personal income tax return, a partnership return, or a corporate franchise tax return. The credit calculated on this form then flows through to the appropriate credit line on your main tax form.

Businesses that have claimed this credit in prior years but disposed of the qualifying property before the required holding period may also need to file this form to calculate a recapture amount, which increases tax liability rather than reducing it. This is an important detail many filers overlook, since the form serves both purposes depending on your situation.

How to Get and Complete the Form

Form IT-602 is available as a fillable PDF directly from the New York State Department of Taxation and Finance website. Because it’s built as an AcroForm, you can type your information directly into the fields on your computer before printing or saving the completed version, which cuts down on errors compared to filling it out by hand.

To complete it accurately, you’ll need documentation of your qualifying investment — including the certification number for the Empire Zone business, the date and amount of the investment, and any prior-year credit claims if you’re calculating a carryover. The form walks through separate schedules depending on whether your investment falls under the community development project category, the certified EZ business category, or direct qualified investments. Each schedule has its own calculation for determining the allowable credit percentage.

If your business also claims wage-based incentives tied to zone employment, you may be filing this form in the same return cycle as Form IT-601, which covers the EZ Wage Tax Credit and ZEA Wage Tax Credit. These credits often apply to the same certified businesses, just tied to different qualifying activities. Some filers dealing with deferred credit situations from earlier tax years might also want to review Form IT-501, which addresses temporary deferral payout credits that can interact with other business credit claims.

Given the complexity of Empire Zone certifications and the recapture rules attached to this credit, it’s a good idea to keep thorough records of your investment documentation for several years after filing, in case the state requests verification or you need to calculate a recapture amount down the line.