Fillable Form It-223 - Innovation Hot Spot Deduction

IT-223 (2014) (back)

Instructions

Who must file

General information

Submit one Form IT-223 with your return. Complete Form IT-223

Qualified entities in innovation hot spots are eligible for the tax

if you are an individual, a fiduciary of an estate or trust, a partner

benefits listed below for five tax years beginning with the year

in a partnership, or a shareholder of an S corporation, and you

the entity became a tenant in or part of an innovation hot spot:

are a qualified entity or a member, partner, or shareholder of a

• Qualified entities taxable under Article 9-A located completely

qualified entity, or both. Include information for all of the entities

within the hot spot are liable only for the fixed dollar minimum

from which you are receiving income or gain attributable to an

tax.

innovation hot spot.

• Qualified entities located inside and outside the hot spot,

A partnership must submit Form IT-223 with Form IT-204,

and corporate partners of qualified entities, are allowed a

Partnership Return, showing the total income or gain attributable

deduction for the amount of income or gain attributable to

to the hot spot and provide the partners with their share of the

operations in the hot spot.

income or gain attributable to the hot spot.

• Individuals who are sole proprietors of a qualified entity, or

are partners in a partnership, limited liability company (LLC)

An S corporation does not file Form IT-223; it must file

members, or shareholders of a New York S corporation, that

Form CT-223, Innovation Hot Spot Deduction. If you are a

is a qualified entity, are allowed a deduction for the amount of

shareholder of an S corporation, obtain your share of the

income or gain attributable to operations at the hot spot.

S corporation’s income attributable to the hot spot from the

S corporation, and follow the instructions on this form for

• Qualified entities are also eligible for a credit or refund of sales

claiming your modification on Form IT-225, New York State

and use tax imposed on the retail sale of tangible personal

Modifications.

property or services.

Taxpayers claiming the above tax benefits are not eligible for

Column instructions

any other New York State exemptions, deductions, credits, or

See the instructions for your tax return for the Privacy notification

refunds to the extent the exemption, deduction, credit, or refund

or if you need help contacting the Tax Department.

is attributable to the business operations in the innovation

hot spot. Claiming any such benefit represents an irrevocable

Column A – Enter the innovation hot spot name from your

election.

certificate.

Qualified entity means a business enterprise that is:

Column B – Enter the hot spot identification code from your

• in the formative stages of development, and

certificate.

• located in New York State, and

Column C – Enter the business participation number from your

• certified by a New York State innovation hot spot as being

certificate.

approved to locate in, or be part of, a virtual incubation

Column D – Enter the employer identification number (EIN)

program operated by that innovation hot spot, and

of the business certified in the hot spot. If you are receiving

• either A or B below:

the income from another entity (partnership, New York

A. any corporation, except a corporation which:

S corporation, estate or trust) enter the EIN of the qualified entity

• over 50% of the number of shares of stock entitling

certified in the hot spot.

the holders thereof to vote for the election of directors

Column E – Make only one entry (1, 2, 3, 4, or 5) to indicate

or trustees is owned or controlled, either directly or

which tax year you are claiming this deduction.

indirectly, by a taxpayer subject to tax under Tax

Law Article 9, sections 183, 184, or 185; Article 9-A;

Column F – Enter the amount of income or gain attributable to

Article 32; or Article 33; or

the hot spot that was included in your federal adjusted gross

• is substantially similar in operation and in ownership

income.

to a business entity (or entities) taxable or previously

In addition to any record keeping requirement imposed by

taxable under Tax Law Article 9, sections 183, 184, 185,

Empire State Development, a qualified entity that is located

or former section 186; Article 9-A; Article 32; Article 33;

inside and outside a New York innovation hot spot must keep

former Article 23; or would have been subject to tax

books and records to disclose, to the satisfaction of the Tax

under Article 23 (as it was in effect on January 1, 1980);

Department, the amount of items of income, gain, loss, and

or the income (or losses) of which is (or was) includable

deduction attributable to operations at (or as part of) the

under Article 22.

innovation hot spot.

B. a sole proprietorship, partnership, limited partnership,

LLC, or New York S corporation that is not substantially

similar in operation and in ownership to a business entity

(or entities) taxable, or previously taxable, under Tax Law

Article 9, sections 183, 184, 185, or former section 186;

Article 9-A; Article 32; Article 33; former Article 23; or

would have been subject to tax under Article 23 (as it was

in effect on January 1, 1980); or the income (or losses) of

which is (or was) includable under Article 22.

For more information about the New York Innovation Hot Spot

Program, visit

223002140094

Form It-223 - Innovation Hot Spot Deduction - 2014 Page 2

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