New York State Digital Game Development Program

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Objective

Built on its legacy strengths in advanced technology, creative arts, and entertainment, New York State is one of the nation’s leaders in the digital game development industry, offering a comprehensive and supportive ecosystem for digital game studios to thrive.

Intended to attract and support the growth of the digital game development industry across New York State, the New York State Digital Game Development Program is designed to accelerate economic development by offsetting some development costs (wages and salaries) associated with producing digital games in New York State. Economic benefits of this program include increased digital game investment, increased number of jobs and studios, and a bolstering of the existing digital game development industry in New York State.

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Overview

Qualified digital game development studios are required to submit their initial applications for qualified digital game projects to New York State before incurring qualified wages.  

Once the project is completed and the final application is reviewed, applicants can receive tax credits on credit eligible costs of 25% for work in the Metropolitan Commuter Transit District and 35% for work outside of the New York City metropolitan commuter transportation district (MCTD). The MCTD is New York City (counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, and Richmond (Staten Island)), and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.

To create and maintain digital game development industry jobs, tax credits of up to $5 million per year will be allocated to support companies producing qualified digital project in New York State. 

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Eligibility

A qualified digital project includes but is not limited to:

  • Video or interactive games, including extensions of video games provided their content is new and playable for an end-user; or
  • Simulation software; or
  • Interactive educational or training products; or
  • Software applications that provide connectivity and communications between mobile devices and digital gaming media production web platforms. 

A qualified digital project does not include a website, video, interactive game, or software that is used predominantly for electronic commerce (retail or wholesale purposes other than the sale of video interactive games); gambling (including activities regulated by a New York gaming agency); political advocacy purposes and/or any website, video, interactive game, or software that depicts obscene material as defined in section 235 of the penal law.

To be eligible, the entity must be engaged in a qualified digital project and must have:

  • A minimum of $50,000 total development costs.
  • Qualified development costs incurred and paid in New York State must be at least 51% of total development costs.
    • Development costs are wages and salaries paid to individuals directly and predominantly related to the development, design, production, editing, and compositing of a qualified digital gaming media production and not related to actors, writers, and track composers.
    • Development costs may not include:
      • Wages for actors, writers, or track composers.
      • Costs (including wages) incurred for the distribution, marketing, promotion, advertising content, or business and financial management.
      • For companies larger than 10 employees: the salaries of executive staff are not eligible.
      • For individuals who hold an ownership interest: income for royalties, licenses or other nonwage distributions are not eligible.
      • Bonuses or lump sum payments.
      • Non labor costs.
      • Travel costs (per diems, housing, travel).
      • Costs used by the taxpayer as a basis of the calculation of any other tax credit.

Applicants can apply for a complete project or select an optional project type that meets the minimum spend requirement, including: 

  • Playable Concept (i.e., a prototype, minimum viable product, or vertical slice)
  • Development Build (expanding to a full interactive experience)
  • Launch & Post Content (developing its final iteration for public launch or intended users)

All qualified digital project applications must include interactive elements.

Maximum credit eligible costs of $5,000,000 per project may be used in the calculation of the Digital Game Development Tax Credit. No single taxpayer can receive more than $1,500,000 in tax credits per year. Up to $200,000 in wages and salaries paid to each individual employed in the creation of the project may be used in the calculation of this credit.

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How to Apply

Application Process

Initial applications must be submitted prior to the commencement of production but no more than 90 days before the start of production. The Department will review the initial application and determine whether the applicant meets the eligibility criteria. The applicant will be notified if the initial application is incomplete or if any revisions are needed. 

Initial Application Materials: 

  • Project Summary
    • Project Schedule (in Project Summary)
    • Diversity Plan (in Project Summary)
  • Project Budget
  • Content Document

Once the initial application is approved, the Department will notify the applicant of eligibility. When the project is complete, the applicant files a complete final application based on actual costs. The Department reviews the final application and determines if it meets all the program requirements. The Certificate of Tax Credit is issued for the tax year that a complete final application is submitted.

Final Application Materials:

During the review of the final application, the Department will request supporting documentation including proofs of payment, payroll reports (if applicable), invoices (if applicable), and timesheets documenting development costs.

Further Resources

If you are interested in more details or have specific questions about the Program, please contact the Digital Game Tax Credit Program at (212) 803-2328 or via email at [email protected].