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NJEDA Angel Investor Tax Credit Program

The New Jersey Economic Development Authority recently announced that during the first 6 months of 2018, investors infused nearly $39 million into New Jersey’s innovation economy through the State’s Angel Investor Tax Credit Program. Gov. Phil Murphy has made the development of New Jersey’s innovation economy a focus of his and this is one of the many opportunities currently available under the EDA.

What is the Angel Investor Tax Credit Program?

The Angel Investor Tax Credit Program was set up to stimulate New Jersey emerging growth companies. Taxpayers (does not have to be a NJ resident) who make investments in qualified New Jersey emerging growth life science and technology companies can receive a credit of 10% of their investment made. If you make an investment $500,000 in a qualified company, you are eligible to receive a tax credit of $50,000! Each calendar year $25 million of Angel Investor Tax Credits may be approved and distributed to taxpayers.

Does the Company you make investments in qualify?

Below are the requirements to be an eligible New Jersey emerging growth life science and technology company:

  • Employ fewer than 225 full-time employees, at least 75% of whom work in New Jersey
  • Does business, employs or owns capital/property, or maintains an office in New Jersey
  • 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 as its primary business as an eligible technology (see above)

Investing taxpayers have six months from the date of investment to submit an application to the New Jersey Economic Development Authority and then must comply with all provisions of the Program.

If you have questions regarding the above-mentioned EDA tax incentive or any related subject, please do not hesitate to contact Withum’s Life Science practice leader Taryn Bostjancic, and Chris DeMayo practice leader of our Technology group, or, fill out the form.

Author: Alex Dundara, CPA | adundara@withum.com

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