New Jersey continues to strengthen its innovation ecosystem with incentives, such as the Angel Investor Tax Credit, designed to attract early-stage capital for emerging technology businesses. For digital health companies—where innovation and R&D drive growth—this program offers a compelling advantage for both investors and entrepreneurs.
What Is the NJ Angel Investor Tax Credit?
The credit is available to investors (individuals and corporations) who make qualified investments in New Jersey emerging technology businesses.
Qualified businesses must:
- Be an emerging technology business.
- Have fewer than 150 employees, with at least 75% of them located in New Jersey.
- Conduct pilot-scale manufacturing, commercialization of technology, or qualified research in NJ.
Qualified investments must:
- Be a non-refundable cash investment (e.g., stock, options, licenses)
- Remain invested for a minimum of two calendar years.
Credit Amounts
- Base credit is 35% of your qualified investment.
- Bonus credit up to 5% if the business is a certified minority or women-owned business or located in an Opportunity Zone.
- Can be applied against gross income taxes or corporation business taxes
- Credit refundable to individuals
- Option to carry the credit forward for individuals and businesses
Key Changes Effective January 1, 2026
- The maximum number of employees decreased from 225 to 150.
- Base credit increased from 20% of the investment to 35%.
Angel Investors in the Digital Health Space
Digital Health companies are often categorized as emerging technology businesses under NJEDA guidelines because they leverage IT, life sciences, and medical device innovation. These companies typically conduct significant research and development (R&D) activities, making them eligible for the program.
Early-stage funding is critical for scaling telehealth platforms, AI diagnostics, and patient engagement tools—areas where New Jersey is seeing rapid growth. Programs like NJ’s Angel Investor Tax Credit complement these trends by incentivizing local investment and supporting startups in this space. Investors and founders should explore how this credit can accelerate growth in NJ’s digital health sector.
Author: Lissett Villar | [email protected]
Contact Us
For guidance on leveraging tax incentives and structuring investments, please connect with our Digital Health Services Team.
