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.

life-sciences-tax-credit-nol-nj-program-fifty

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.

Related Insights

View All Insights

Microscope focusing on glowing data filled vials on a smart lab interface, conveying precision medicine, automated research, and pharmaceutical innovation powered by analytics.

Life Sciences and the R&D Tax Credit: Why Documentation Matters

The life sciences industry, encompassing biotechnology, pharmaceuticals, medical devices and diagnostics, is uniquely positioned to benefit from the federal Research & Development (R&D) tax credit under IRC §41. This incentive rewards companies that invest in innovation, particularly where activities involve scientific uncertainty, experimentation and technological advancement. However, while many life sciences companies perform work that…

Hand holding laboratory pipette with glowing digital network connections representing scientific research and biotechnology innovation in modern lab setting.

Maximizing Innovation Incentives: How the Orphan Drug Credit Can Outperform the R&D Tax Credit

The Orphan Drug Credit (ODC) is a powerful federal tax incentive designed to encourage the development of treatments for rare diseases, generally defined as conditions affecting fewer than 200,000 individuals in the United States. For biotechnology and pharmaceutical companies advancing therapies through clinical trials, the ODC can deliver a significantly enhanced tax benefit compared to…

Tax Planning Concept: Businessman Arranging Wooden Blocks with Financial Icons and TAX Text Representing Corporate Finance and Growth Strategy

Why Global Structuring and Transfer Pricing Matter for Life Sciences Companies

The life sciences industry is characterized by high-value intellectual property (“IP”), extensive research and development (R&D), complex regulatory environments, and global supply chains. Life sciences companies are increasingly global from day one where R&D is performed in one country, clinical trials in others, IP held centrally, and manufacturing and commercialization is performed elsewhere. These unique attributes create opportunity, but it also creates tax risk if global structuring and transfer pricing are not…