Effective as of January 1, 2020, investors can take advantage of New Jersey’s expanded Angel Investor Tax Credit Program…
Effective as of January 1, 2020, investors can take advantage of New Jersey’s expanded Angel Investor Tax Credit Program. The program, which provides a tax credit for a percentage of an angel investor’s investment in a qualifying emerging New Jersey technology or life science business, aims to help New Jersey startups and other early-stage companies attract capital.
“Increasing the benefit investors receive for injecting capital into young companies is an important step in positioning New Jersey as a leader in innovation,” Governor Phil Murphy said. “New Jersey’s most precious asset is its people, and encouraging investment in minority- and women-owned businesses will help to create the most diverse and inclusive innovation economy in the nation.”
Angel Investor Tax Credit Program
The New Jersey Angel Investor Tax Credit Program provides a refundable tax credit against New Jersey corporation business or gross income tax for qualified investments in an emerging technology or life sciences business with a physical presence in New Jersey that conducts research, manufacturing, or technology commercialization in the state. To be eligible for the program, businesses must have fewer than 225 employees, and at least three quarters of those employees must work in New Jersey.
An emerging business is defined as one that has qualified research expenses paid or incurred for research conducted in the state; conducts pilot scale manufacturing in the state; or conducts technology commercialization in the state in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology; electronic drive technology; information technology; life sciences; medical device technology; mobile communications technology; or renewable energy technology. Meanwhile, qualified investments include non-refundable transfers of cash made directly to the New Jersey emerging technology business in connection with at least one of the following:
Stock, interests in partnerships or joint ventures, licenses (exclusive or non-exclusive), rights to use technology, marketing rights, warrants, options, or any similar items, including but not limited to options or rights to acquire any of the listed; or
A purchase, production, or research agreement.
To be considered non-refundable, these items must be held or not expire for at least two calendar years from the date of the transfer of cash, with an exception being made for initial public offerings (IPOs), mergers and acquisitions, damage awards for the business’s default of an agreement, or other return of initial cash outlay beyond the investor’s control.
Greater Tax Benefits for Angel Investors
In June, Gov. Murphy signed legislation into law that expands the program to provide greater tax benefits. Specifically, the available tax credit increased from 10 percent to 20 percent of a qualified investment. There is also now an additional five percent bonus available for investments in a business located in a qualified opportunity zone, low-income community, or a business that is certified as minority- or women-owned by the State.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
