NJEDA Received Record-Breaking 700+ Angel Investor Tax Credit Program Applications in 2020
TRENTON, NJ (February 11, 2021) – The New Jersey Economic Development Authority (NJEDA) announced today that interest in its Angel Investor Tax Credit Program saw record levels in 2020, as investors submitted more than 700 applications, nearly three times the average of previous program years. Applications also hit the legislative cap of $25 million in late October, marking the first time the program cap had ever been reached.
The Angel Investor Tax Credit Program offers investors refundable tax credits against qualified investments for New Jersey businesses. The program supports technology businesses with a physical presence in New Jersey that conduct research, manufacturing, or technology commercialization in the state. Seen as a means to not only invest in emerging companies but also attract capital into the New Jersey, the Angel Investor Tax Credit Program is open to investors throughout the world, not just those located in the Garden State. Investors have six months from the time of investment to apply to the program.
2020 was the first year that investors could benefit from the program’s expansion, which was signed into law by Governor Phil Murphy in the summer of 2019. Under enhancements to the program, which took effect January 1, 2020, investors can receive an increase in the tax credit from 10 percent to 20 percent on a qualified investment. The expansion also added a five-percent bonus for investments in businesses located in a qualified opportunity zone, low-income community, or a business that is certified by the State as minority- or women-owned.
Today’s announcement comes a month after Governor Murphy signed the New Jersey Economic Recovery Act of 2020, part of which increases the legislative cap on this program from $25 million to $35 million for the 2021 program year and going forward.
“The expanded Angel Investor Tax Credit Program has been heralded throughout New Jersey’s innovation community as an enormous asset to our state,” said NJEDA Chief Executive Officer Tim Sullivan. “The combination of increased funding allocation and program enhancements, including adding a bonus to encourage investment in women- and minority-owned businesses, has a double benefit to the entire ecosystem. These tools help emerging companies attract capital, which will fuel their growth, and encourage new businesses to establish themselves in our state. We thank Governor Murphy and the legislature for bolstering this critical resource.”
The NJEDA approved 142 applications through the Angel Investor Tax Credit Program in 2020, representing an injection of $35.8 million into 21 New Jersey companies and support of 348 jobs in total. The $35.8 million figure is a $2.7 million increase from 2019.
Sullivan noted that NJEDA staff is continuing to review applications and that applications submitted to the NJEDA up to November 1, 2020 (up to the $25 million program cap), will be considered for the 2020 Program Year. Applications that were submitted after that date will be considered for the 2021 Program Year.
In the fourth quarter of 2020 alone, the NJEDA approved 72 Angel Tax Credit Program applications. This represents nearly $18.4 in private investments into 14 unique technology and life science companies, employing more than 265 full-time personnel.
The Angel Investor Tax Credit Program had one first-time participant in the fourth quarter of 2020. Bionex Pharmaceuticals benefited from a $200,000 investment in October and the investor qualified to receive the additional five-percent bonus for investing in a certified woman owned business. Bionex is a tenant at the NJEDA’s Bioscience Center – Step-Out Labs in North Brunswick. The Step-Out Labs is an intermediate space designed for Incubator graduates or other life sciences companies that have outgrown their incubation space.
The Angel Investor Tax Credit Program is administered by the NJEDA, with the assistance of the Department of the Treasury’s Division of Taxation.
About the New Jersey Economic Development Authority
The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.
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