In an effort to stimulate investments in emerging technology businesses based in New Jersey, a tax benefit program has been established allowing credits against corporation business or gross income taxes.
If you have invested in a qualifying emerging technology business in New Jersey in 2012 or after, you may have a beneficial tax credit available to you. A qualifying investor can be an entity of any kind or an individual. Also, if you are an out of state investor you can simply file a zero income tax return with New Jersey and submit your return to the New Jersey Economic Development Authority to obtain a refund.
The New Jersey Angel Tax Credit allows an eligible investor to apply for a tax credit against the New Jersey corporation business or gross income tax. In fact, 10% of your qualified investment, up to a maximum allowed credit of $500,000 for each qualified investment, can be credited.
There are four criteria that must be met for the New Jersey emerging technology business to be qualified:
The business employs less than 225 employees, at least 75% of whom work in New Jersey
The entity must conduct business, employ or own capital or property, or maintain an office in New Jersey
The business conducts at least one of the following activities in New Jersey
Incurs qualified research expenses in the State.
Conducts pilot scale manufacturing in the State.
Commercializes one or more of the following eligible technologies in the State: Advanced Computing, Advanced Materials, Biotechnology, Electronic Devices, Information Technology, Life Sciences, Medical Devices, Mobile Communications, and Renewable Energy Technology.
Has an eligible technology (as listed above) as its primary business
Non-refundable transfers (must be held or not expire for at least 2 calendar years) of funds made directly to the New Jersey emerging technology business can be qualified investments. For example, purchasing stock, interests in partnerships, licenses, marketing rights, rights to use technology or a purchase, production or research agreement are considered transfers.
The tax credits may be refunded as an overpayment, but no interest on the overpayment will be paid.
A non-refundable application fee in the amount of $500 applies for investment amounts of $50,000 or less, and $1,000 for investment amounts exceeding $50,000. There is also an approval fee for qualified investments over $50,000, which is 5% of the amount of the tax credit or $2,500, whichever is greater. Your application fee can be credited toward payment of the approval fee.
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
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!
