The credit is available to all investors, whether they are business entities or individual taxpayers. Further, the credit is available to investors who are company founders, including nonresidents, as long as he or she owned less than 80% of the company before investment. Qualified investments include non-refundable transfers of cash made directly to the eligible New Jersey emerging technology business in exchange for one of the following:
To be considered an eligible New Jersey emerging technology business, the business must meet the following requirements:
The credit is 10% of the qualified investment, up to a maximum allowable credit of $500,000 for each qualified investment. The credit may be treated as an overpayment and refunded (after the application against corporation business or gross income taxes), and it may be claimed in the tax year applicable to the effective date of approval. For corporate taxpayers, the credit may be carried forward for a maximum of 15 tax years. The Program allows for up to $25 million in tax credits to be issued in a calendar year.
For all investments made prior to January 1, 2017, applications for credit must be submitted to the EDA within one year of the date of the investment. In order to be considered for approval for the 2016 tax credit certificate, the application and required documentation must be submitted by November 15, 2016.
For investments made on or after January 1, 2017, applications must be submitted to the EDA within six months of the date of investment.