ANGEL INVESTOR TAX CREDIT PROGRAM
Please note that we have recently migrated to a new application system. If you are a new user to this system, you will need to create a new login the first time you use it. Information from the old system does not carry over.
The New Jersey Angel Investor Tax Credit Program establishes tax credits against corporation business or gross income taxes based on a qualified investment in a New Jersey emerging technology businesses for the purposes of stimulating investment.
The Economic Recovery Act signed by Governor Murphy in January, 2021 has increased the annual program cap to $35 million from $25 million in tax credits.
DOLLAR AMOUNT
20% of the qualified investment made in a NJ emerging technology business, with potential increase to 25% if the business is certified M/WBE or located in an Opportunity Zone or New Markets Tax Credit Census Tract.
BENEFITS
Credits against corporation business or gross income taxes
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Stimulates investment in NJ emerging technology businesses.
ELIGIBILITY
NJ emerging technology business must employ fewer than 225 employees, at least 75% of whom work in New Jersey.
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See more detailed eligibility criteria below
All investors that invest in a qualifying NJ emerging technology business may benefit from a tax credit through the Angel Investor Tax Credit Program.
APPLICATION
Applicants have six months from date of investment to submit an Angel Tax Credit application to the New Jersey Economic Development Authority. No exceptions can be made. Please note that this is a dual application consisting of an investor section and a section for the technology company representative to complete. An application is not considered submitted until both the investor and technology company representative have completed and submitted their respective sections, including payment of the non-refundable application fee by the investor. Investors are responsible for completing their portion and also following up with the technology business representative to ensure the company portion is completed and submitted prior to the deadline.
Please note that you will be required to upload certain documentation of your transaction in the application system. If you encounter any issues uploading files, please email angeltaxcredit@njeda.com for alternative methods to provide required documentation to the NJEDA.
All applicants (including out-of-state and overseas investors) must file a NJ tax return for the tax year for which their application is approved, even if they have no other tax nexus to NJ. The tax year is determined based on date of application, not investment or approval. Additional instructions will be provided after approval of your application.
PROGRAM DETAILS
Through calendar year 2020, the Authority may approve up to $25 million of Angel Investor Tax Credit annually. Starting in calendar year 2021, up to $35 million of Angel Investor Tax Credit may be approved per calendar year.
If the cumulative credits requested by taxpayers exceed the amount available each year, then, the credits will be applied starting on the first day of the succeeding calendar year, in which Angel Investor Tax Credits do not exceed the amount of credits available. These applications will be reviewed in the order in which they were received and fully complete.
ELIGIBILITY
- Employs fewer than 225 full-time employees, at least 75% of whom work in New Jersey
- The company must have at least one employee that meets the definition of “full‐time employee” in order to be eligible for the program.
- Does business, employs or owns capital or 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, Renewable Energy Technology, and Carbon Footprint Reduction Technology
- Has as its primary business an eligible technology (as listed above)
- Qualified investments include non-refundable transfers of cash made directly to the New Jersey emerging technology business in connection with at least one of the items listed below. To be considered non-refundable, these items must be held or not expire for at least 2 calendar years from the date of the transfer of cash, with an exception being made for initial public offerings (IPOs), mergers and acquisitions, damage awards for the business’s default of an agreement, or other return of initial cash outlay beyond the investor’s control.
- stock, interests in partnerships or joint ventures, licenses (exclusive or non-exclusive), rights to use technology, marketing rights, warrants, options, or any similar items, including but not limited to options or rights to acquire any of the listed purchase, production, or research agreement
FEES
- Application fee (non-refundable):
- $500 for investment amounts of $50,000 or less
- $2,500 for investment amounts over $50,000
- Approval fee for qualified investments over $500,000
- 5% of the amount of the tax credit or $2,500, whichever is greater. The application fee is credited toward the approval fee.
- A non-refundable fee of $150.00 shall be paid to the Authority for each request for reissuance per tax certificate previously issued pursuant to N.J.A.C. 19:31-19.6.
M/WBE CERTIFICATION
Early-stage businesses interested in becoming a certified M/WBE must complete an application with the New Jersey Department of the Treasury – Division of Revenue. There is a $100 application fee (non-refundable), and M/WBE certifications are valid for 3 years.
For more information on M/WBE certification, please call the Division’s Business Registration and Certification Office at (609) 292-2146.
OPPORTUNITY ZONES / NEW MARKETS TAX CREDIT CENSUS TRACTS
A bonus of 5% of the qualified investment amount is available, for qualified investments made after 1/1/2020, in New Jersey emerging technology businesses that are located in a New Jersey Opportunity Zone or New Markets Tax Credit Census Tract.
NEW JERSEY DIVISION OF TAXATION
A Tax Clearance Certificate is required for most entities in order to be approved for NJEDA assistance. These instructions are available to assist with the process of registering a business and obtaining a tax clearance from NJ Division of Taxation. SECURING YOUR TAX CLEARANCE CERTIFICATE
You can email businessassistancetc.taxation@treas.nj.gov any time for pins, to confirm the exact business name and/or for general assistance with this process.
Also, you can email taxation.angelinvestor@treas.nj.gov with any questions around taxation, filing returns, or claiming the credit.
Please be advised: New Jersey State law prohibits most cannabis license and certification holders from receiving or continuing to receive an economic incentive from the NJEDA. If the applicant, or any person who controls the applicant or owns or controls more than one percent of the stock of the applicant, has applied for or received a license or a certification from the New Jersey Cannabis Regulatory Commission (NJ-CRC), the applicant is ineligible for this program and should not proceed with an application. If an application is received from an applicant that meets this criteria, the application will be declined and the application fee will not be refunded.
PROGRAM GUIDE
Please check out the additional resources below for more information
QUESTIONS
To answer any questions you may have, please first consult with the program videos and links provided above, including the “Frequently Asked Questions”. If this does not answer your questions, please email your questions and contact information to innovation@njeda.gov.