Form IT-604: Claim for QEZE Tax Reduction Credit (Tax Year 2025)

Form IT-604 is how businesses located in a New York State Empire Zone claim the Qualified Empire Zone Enterprise (QEZE) Tax Reduction Credit. This credit reduces the tax burden on companies that met certain employment and investment benchmarks while operating in a designated zone, and it applies against corporate franchise tax, personal income tax, or other business taxes depending on how the taxpayer is structured. The New York State Department of Taxation and Finance issues this form each year, and the version for tax year 2025 reflects the current benefit percentages and eligibility rules still in effect for QEZEs whose certification periods haven’t expired.

The QEZE program itself is a legacy incentive tied to New York’s now-closed Empire Zones initiative. Businesses that were certified as Empire Zone enterprises before the program’s designation periods ended can still claim benefits for a set number of years, provided they continue meeting the employment test outlined by the Department of Economic Development. Form IT-604 is the mechanism for translating that certification into an actual tax reduction on your return.

Who Needs to File Form IT-604

You need this form if your business was certified as a QEZE and you’re still within your benefit period, which generally runs for a set number of consecutive tax years starting from your certification date. This includes C corporations, S corporations, partnerships, and sole proprietors who operated within a designated Empire Zone and satisfied the employment number test for the tax year in question. If your business never received QEZE certification, or if your benefit period has already expired, this form doesn’t apply to you.

Businesses that also claimed related zone-based incentives, such as the credit covered in our guide to Form IT-602 for the EZ Capital Tax Credit, should note that IT-604 is a separate claim with its own calculation and eligibility requirements. Some companies end up filing both if they qualify for multiple zone-related credits in the same tax year, so it’s worth reviewing each form’s instructions carefully to avoid mixing up the benefit periods or employment test years.

When and How the Credit Is Used

The QEZE Tax Reduction Credit is calculated based on a benefit percentage that decreases over time as your certification period progresses. Early years in the program typically allow for a higher percentage reduction, while later years scale down according to a fixed schedule set by the state. You’ll need to determine your applicable benefit period year before completing the calculation section of the form, since using the wrong year’s percentage is one of the most common errors taxpayers make with this credit.

Form IT-604 requires you to report your tax factor, the employment number test results, and the resulting credit amount that flows through to your main tax return. Corporations attach it to their franchise tax return, while individuals and pass-through entity owners attach it to their personal income tax filing. The form also asks for identifying details about your zone certification, so keep your Empire Zone certification paperwork on hand when you sit down to complete it.

Because this credit intersects with other tax attributes, some filers also cross-reference forms dealing with passive activity limitations or retirement account distributions when their overall tax picture is more complex. If you’re juggling multiple credit and deduction forms this season, resources like our breakdown of Form FTB 3801 for passive activity loss limitations or the guide to Form FTB 3805P for additional taxes on qualified plans can help you understand how different credits and taxes interact, even though those are California forms and won’t apply directly to your New York filing.

The official PDF is a fillable AcroForm, meaning you can type your entries directly into the document using standard PDF software before printing or attaching it to your electronic return. Double-check your employment test figures against your certification records before submitting, since the Department of Taxation and Finance routinely verifies these numbers against Empire Zone program records.