Articles May 1, 2026 3 min read

New Jersey’s 2026 NOL Program: Turn Unused Tax Attributes Into Working Capital

R&D Tax Credits

Tax Credits

Life Sciences

The New Jersey Economic Development Authority (NJEDA) will open the application window for the 2026 Technology Business Tax Certificate Transfer Program (the “NOL Program”) on May 1, 2026, with submissions due no later than June 30, 2026. For emerging and growth stage technology and biotechnology companies, this long standing incentive continues to be one of the most valuable sources for companies looking to monetize unused tax attributes.

The NOL Program allows qualified companies to sell a portion of their net operating losses (NOLs) and unused R&D tax credits to unrelated, profitable New Jersey corporations. This program enables businesses that are often pre revenue or pre profit to convert tax assets into immediate working capital to support R&D, hiring, and expansion.

With more than $75 million available annually, including $15 million set aside for companies located in Innovation Zones, Opportunity Zones, or certified as minority or woman owned, the program remains a cornerstone of New Jersey’s strategy to strengthen its innovation economy.

White microscope objective lens scanning laboratory glass slide with glowing hexagonal chemical bonds representing bioinformatics data analysis.

Key Benefits

Approved applicants may sell their NOLs and R&D tax credits for at least 80% of their value and are eligible to receive up to $20 million in lifetime benefits. This funding can be used for:

Working capital
Research and development activities
Equipment purchases
Facility build out or expansion
Other eligible operational expenditures

Eligibility Criteria

To participate in the NOL Program, companies must meet several statutory and administrative requirements. Key criteria include:

Industry Requirement: The business must be a technology or biotechnology company whose primary activity involves a scientific process, product, or service.
Intellectual Property: Applicants must own, have filed for, or be licensed to use protected proprietary intellectual property (patents or registered copyrights).

Financial Position: The company must have no positive net operating income in either of its two most recent full year GAAP financial statements. This requirement also applies to parent companies and consolidated groups.
Employee Thresholds:
- 1–224 total U.S. employees (including subsidiaries)
- Minimum New Jersey full time employees based on company age:
  - 1 employee if <3 years old
  - 5 employees if 3–5 years old
  - 10 employees if >5 years old
Financial Statements: The two most recent full year financial statements must be compiled, reviewed, or audited by an independent CPA firm.
Ongoing Compliance: Eligibility must be maintained both at application and at benefit closing.

Fees

Companies should plan for the following non-refundable program fees:

Application Fee: $1,000
Approval Fee: 1% of the tax benefit award (capped at $20,000). The application fee is credited toward this amount.

Application Timeline and Process

The 2026 application cycle will run as follows:

Opening Date: May 1, 2026
Submission Deadline: June 30, 2026

Takeaway

For New Jersey based technology and biotechnology companies, the NOL Program remains a powerful tool for transforming tax attributes into immediate, non dilutive capital. With the 2026 application window opening on May 1, now is the time for companies to evaluate eligibility, prepare financial documentation, and consider how NOL monetization can support their growth and innovation plans.

Have Questions or Need Guidance?

For more information on this topic, please contact a member of our team.

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