Form DTF-621: Claim for QETC Employment Credit (2026)

Q: How much income can be excluded on IT-221?

You may exclude up to <b>$5,000 ($10,000 for joint filers)</b> of qualifying disability income, reduced by any NY pension or annuity exclusion previously claimed.

Q: Are HSA contributions deductible for New York tax?

No—unlike the federal system, New York does <b>not</b> allow an HSA deduction.

Last reviewed: 2025-10-29

Use the New York Tax Form Calculator Form DTF-621 — Claim for Qualified Emerging Technology Company (QETC) Employment Credit as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 New York state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Form DTF-621 allows certified Qualified Emerging Technology Companies (QETCs) to claim a New York State employment credit for creating new full-time jobs within the state. The credit encourages the growth of technology-focused firms by offsetting tax liabilities when expanding local employment. This credit can be claimed for up to three consecutive years once eligibility is established.

Eligible businesses must first obtain certification as a QETC using Form DTF-620. Once certified, they use DTF-621 to compute and report the employment credit. Partners, S corporation shareholders, and beneficiaries claim their distributive share on their individual returns.

Eligibility: Available to entities located in New York State with annual product sales of $10 million or less whose primary activity involves emerging technologies or that meet the required R&D-to-net-sales ratio. Certification under DTF-620 is required before claiming the credit.
Employment growth requirement: The average number of full-time employees in New York State for the current tax year must be at least 101% of the average number for the three-year base period immediately preceding the first year the credit is claimed.
Credit computation: The credit equals $1,000 per new full-time employee over the base-year average. The credit can be claimed for three consecutive years, provided the employment threshold continues to be met.
Filing requirement: The credit is claimed on DTF-621 and attached to your business or personal income tax return. Pass-through entities distribute the credit to partners, shareholders, or beneficiaries using Form IT-204 or IT-205 as applicable.
Recordkeeping: Maintain documentation including QETC certification, employee rosters, payroll records, and proof that employment was physically located in New York. This is essential for audit defense and renewal eligibility.

Claim for QETC Employment Credit
File this form with corporate franchise tax return Form CT-3, CT-3-A, or CT-3-S, or with income tax return Form IT-201, IT-203, IT-204, or IT-205.
Mark with an X the tax year for which you are claiming the qualified emerging technology company (QETC) employment credit on this return: 1st 2nd 3rd
A	Partner in a partnership, S corporation shareholder, or a beneficiary of an estate or trust: enter your share of the QETC employment credit (see instructions, Form DTF-621-I)						A
Business name of the partnership, S corporation, estate, or trust					Taxpayer identification number
Schedule A – Eligibility requirements (All the questions in Schedule A pertain to the tax year for which you are claiming the credit.)
Part 1 – Location and sales (mark X in the appropriate boxes)
1	Is the company located in New York State?							Yes No
2	Are the total annual product sales of the company $ or less?							Yes No
If you answered Yes to questions 1 and 2, continue with Part 2. If you answered No to either question 1 or 2, you do not qualify for a QETC employment credit for the current tax year.
Part 2 – QETC business activities
Research and development (R&D) activities (see instructions)
3	Does the company have R&D activities in New York State? If No, skip lines 4 through 7 and continue with question 8. If Yes, continue with line 4							Yes No
4	Enter the amount of R&D funds						4
5	Enter the amount of net sales (if you have any amount of R&D funds but zero net sales, you are a QETC; skip line 6 and mark the Yes box on line 7)						5
6	R&D funds percentage (divide line 4 by line 5; enter the result as a percentage)						6	%
7	Does the percentage on line 6 equal or exceed %? If Yes, you are a QETC; continue with Part 3. If No, continue with question 8.							Yes No
Primary products and services
8	Does the company develop or create products or services that are classified as emerging technologies?							Yes No
	If Yes, enter in the box below a description of the company’s emerging technology products or services, and continue with line 9. If you answered No to lines 3 and 8 or lines 7 and 8, you cannot claim this credit
9	Enter the gross receipts or sales from the company’s emerging technology products or services described on line 8 that were included on your federal return						9
10	Enter from your federal return the gross receipts or sales from all the company’s products or services If line 10 is zero, skip lines 11 and 12 and continue with line 13. If line 10 is greater than zero, continue with line 11.						10
11	Divide line 9 by line 10 (enter the result as a percentage)						11
12								Is the percentage on line 11 greater than %? Yes No If Yes, continue with Part 3. If No, you cannot claim this credit.
B	If you are claiming this credit as a corporate partner, mark an X in the box
13	Enter the total expenditures attributable to the development or creation of emerging technology products or services included on your federal return						13
14	Enter the total expenditures included on your federal return						14
15	Divide line 13 by line 14 (enter the result as a percentage)						15
16	Is the percentage on line 15 greater than %? If Yes, continue with Part 3. If No, stop. You cannot claim this credit.							Yes No
Part 3 – Computation of average number of full-time employees in New York State for the current tax year and three-year base period
Current tax year		March 31	June 30	Sept. 30	Dec. 31	Total
Number of full-time employees in New York State
17	Average number of full-time employees in New York State for the current tax year (see instructions)						17
Number of full-time employees in New York State for three-year base period		March 31	June 30	Sept. 30	Dec. 31	Total
First year
Second year
Third year
Total number of full-time employees in New York State for the three-year base period
18	Average number of full-time employees in New York State for the three-year base period (see instructions)						18
19	Percentage of employment for full-time employees in New York State (divide line 17 by line 18; enter the result as a percentage; see instructions)						19
If your percentage of employment for full-time employees in New York State on line 19 is less than %, do not complete Schedule B; see instructions. If your percentage of employment is at least %, continue with Schedule B
Schedule B – Computation of credit for the current tax year
20	Enter amount from line 17 (include only those employees listed on page 3)						20
21	Enter amount from line 18						21
22	Subtract line 21 from line 20						22
23	Credit per employee						23
24	Credit computed for the current tax year (multiply line 22 by line 23; see instructions)						24
Additional information for Schedule B – Employee listing
List below each employee used to compute the average number of full-time employees on line 17.
Employee’s name		Social security number		Employee’s name		Social security number






















Schedule C – Computation of QETC employment credit
25	Enter the amount from page 1, line A (Fiduciaries: see instructions.)						25
26	QETC employment credit computed for the current tax year (from Schedule B, line 24; see instr.)						26
27	QETC employment credit (add lines 25 and 26; see instructions)						27
Schedule D – Computation of QETC employment credit limitation (Article 9-A only)
28	Current year’s tax (see instructions)						28
29	Enter other credits used (see instructions)						29
30	Net tax (subtract line 29 from line 28)						30
31	Enter your fixed dollar minimum tax (see instructions)						31
32	Credit limitation. Subtract line 31 from line 30 (if less than zero, enter 0)						32
33	QETC employment credit to be used for the current tax year (see instructions)						33
34	Unused QETC employment credit (subtract line 33 from line 27)						34
35	Amount of unused credit on line 34 to be refunded (see instructions)						35
36	Amount of unused, nonrefunded credit to be applied as an overpayment to the next year’s tax return (subtract line 35 from line 34; see instructions)						36

Computation Example

Assume a QETC had an average of 45 full-time New York employees over the three-year base period. During the current year, the average increased to 55. The 10 additional employees qualify for the credit: 10 × $1,000 = $10,000. The company may continue claiming the credit for two more years if the employment threshold remains satisfied.

Partnerships and S corporations compute the credit on DTF-621 and distribute the amount to owners based on ownership percentage. Individuals report their allocated share on IT-201-ATT or IT-203-ATT under code 621.

Unused credit may be refunded or carried forward, depending on entity type. Article 9-A corporations cannot reduce their liability below the fixed-dollar minimum tax, and the credit does not apply against the MTA surcharge.

Ensure that base-year and current-year employment averages are calculated consistently across all reporting periods. Any discrepancy between DTF-620 certification records and DTF-621 filings may result in credit adjustment or denial.

Last reviewed: 2025-10-29: If you believe this form requires an update, please contact us.

Strategic Considerations and Compliance

Plan staffing schedules to ensure year-end averages meet or exceed the 101% threshold. Hiring within the first half of the year maximizes the effect on the average headcount and ensures full-year credit eligibility.

Maintain contemporaneous employment documentation, including payroll registers and New York State unemployment insurance filings, as the Department of Taxation and Finance routinely verifies headcounts during audit.

For long-term planning, combine the QETC Employment Credit with other incentives such as the QETC Capital Tax Credit (Form DTF-622) to optimize your overall tax benefit. When used strategically, these credits substantially reduce early-stage operating tax exposure while supporting in-state technology employment growth.

Quick Access Tools

Frequently Asked Questions

Does IT-203-ATT replace IT-112-R or IT-112-C?

No. Those forms calculate credits for taxes paid to other jurisdictions, and their totals are then entered onto IT-203-ATT where indicated.

How much income can be excluded on IT-221?

You may exclude up to $5,000 ($10,000 for joint filers) of qualifying disability income, reduced by any NY pension or annuity exclusion previously claimed.

Can part-owners of a property claim IT-119?

Yes — if the notice issued reflects the property key and entity ownership, each owner must enter their share of the underpayment on IT-119 and may attach separate forms as required.

Can I use IT-203-B to claim the NY College Tuition Deduction?

Yes. Part 2 of IT-203-B calculates the allowable college tuition itemized deduction or credit, depending on your AGI and tuition amounts paid.

Are HSA contributions deductible for New York tax?

No—unlike the federal system, New York does not allow an HSA deduction.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.