IT-604: Claim for QEZE Tax Reduction Credit (2024)
New York · NY DTF · Used for tax years 2024
Form IT-604 is used to claim New York’s qualified empire zone enterprise (QEZE) tax reduction credit. It reports employment numbers and calculates the factors used to determine the credit available and the amount used for the current tax year.
Who files this form
Use Form IT-604 to claim the qualified empire zone enterprise (QEZE) tax reduction credit. The form includes claims by partners in partnerships, shareholders of New York S corporations, and beneficiaries of estates or trusts.
Complete the section that matches the QEZE’s first certification date:
- Section 1: First certified before April 1, 2005.
- Section 2: First certified on or after April 1, 2005.
The form includes employment tests. If you answer “No” to either employment test in your section, the form says to stop because you are not eligible for the credit.
What you'll need
Have these documents and details ready:
- Copies of all certificates of eligibility and EZ retention certificates, which must be submitted with the form.
- The QEZE’s first certification date, business name, employer identification number (EIN), and empire zone name.
- Full-time employee counts for the current year, applicable base period, and test year. The employment tables use March 31, June 30, September 30, and December 31 counts.
- Property values and employee wages and other compensation for the EZ and New York State.
- Applicable tax return figures, including tax, QEZE income allocated within New York State, New York adjusted gross income, and credits applied before this credit.
- Names and EINs of related business entities.
- For the beneficiary and fiduciary schedules, beneficiary names, identifying numbers, and shares of QEZE income.
If a QEZE first certified before August 1, 2002, claims it was formed for a valid business purpose, submit a notarized statement explaining in detail how it meets that test.
How to file
Submit Form IT-604 with Form IT-201, IT-203, IT-204, or IT-205.
Complete the information above Section 1 on page 1, then complete either Section 1 or Section 2 based on the QEZE’s first certification date. Do not complete both sections.
Submit all eight pages with your return, along with copies of all certificates of eligibility and EZ retention certificates.
Common mistakes
- Leaving out unused pages: The form requires all pages, 1 through 8, with your return.
- Completing both sections: Complete only Section 1 or Section 2, plus the information above Section 1 on page 1.
- Omitting employees in other empire zones: The all-EZ employment calculations include employees in all EZs, even zones where you are not certified.
- Rounding employment numbers: Do not round the current-year and base-period employment numbers marked “do not round.”
- Continuing after a failed employment test: A “No” answer on line 3, 6, 36, or 39 means you must stop and are not eligible for the credit.
- Forgetting certificate copies: Submit copies of all certificates of eligibility and EZ retention certificates.
Questions people ask
Which section should I complete?
Complete Section 1 if the QEZE was first certified before April 1, 2005. Complete Section 2 if it was first certified on or after that date. Do not complete both.
Do I need to submit all eight pages?
Yes. The form requires all eight pages with your return, even though you complete only one of the two sections.
Can I claim the credit as a partner, shareholder, or beneficiary?
The form provides a checkbox for claims by partners in partnerships, shareholders of New York S corporations, and beneficiaries of estates or trusts. Mark that box if it applies.
How do the employment tests differ between sections?
Section 1 uses a five-year base period and asks whether current-year employment equals or exceeds base-period employment, both within all EZs and within New York State outside all EZs. Section 2 uses a four-year base period and asks whether current-year employment exceeds base-period employment, both within all EZs and in New York State. Each test refers you to the instructions.
How is the credit calculated on the form?
The form multiplies the benefit period factor, employment increase factor, zone allocation factor, and tax factor. It then separately asks for tax due, credits applied before this credit, and the credit used for the current tax year.