NJEDA Approves New Tax Credit Program

On May 12th, 2021, the New Jersey Economic Development Authority (NJEDA) Board announced the approval of the newly created Emerge Job Creation Tax Credit Program. This tax credit program, which will be available for both small and large businesses was proposed under the Economic Recovery Act of 2020.

Under the new Emerge Program, businesses will have the opportunity to apply for this tax credit to help support new projects that meet certain minimum capital investment, as well as with job creation and retention.

To be eligible for the tax credit under the Emerge Program, businesses/projects must meet the following requirements:

• Invest private capital into an eligible incentive location within New Jersey and create good-paying jobs to its employees.
• Be within the technology, life science, clean energy, manufacturing, food and beverage, financial and professional services, or transportation spaces.
• Projects must create at least 35 new, full-time jobs (this requirement could be lower if the company is within certain targeted industries or can qualify as a small business).
• 80% or more of incented employees’ work time must be spent in the state of New Jersey and 80% of withholdings must be subject to NJ Income Tax.
• Business must commit to staying in New Jersey for at least 1.5 times the duration of the tax credit period.
• Demonstrate that the award of the tax credit is a material factor in the decision to create or retain at least the minimum number of fulltime jobs.

Once an application is approved by the NJEDA, projects may receive tax credits from anywhere between $500 to $4,000 per job, per year. Projects may also be eligible for bonuses of up to a maximum of $8,000 per job, depending on where the project is located, the industry in which the project takes place, and other criteria.

Authors: Gianluca Panarelli, CPA, MST | [email protected], Aubrey Wolfrum | [email protected]