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It’s that time of year again—New Jersey NOL and R&D Credit Application Deadline!

If your company is technology- or biotech-based and you are considering applying for sale of New Jersey NOLs and/or R&D credits through the NJ Economic Development Authority, please note the application is due on June 28, 2013.

Part of the filing requirements include corporate tax returns along with financial statements. Last year about 60 companies shared in $60 million from this program.

Below we have listed some of the requirements for the 2013 application along with the changes from 2012.

2013 REQUIREMENTS: 

  1. Company must have less than 225 full-time employees (including parent, subsidiaries, affiliates located within the United States). (Full-time NJ employee is an NJ resident who works 35 hours a week in the office or 4 out of 5 days, and is offered health benefits; the employee may choose to opt out.)
  2. Employment is as follows: FROM EARLIEST DATE OF INCORPORATION:
    • 1 > 3 years in business--1 FULL-TIME NJ EMPLOYEE
    • 3 > 5 years in business--5 FULL-TIME NJ EMPLOYEES
    • 5 years and on--10 FULL-TIME NJ EMPLOYEES
     
  3. Companies must show proof of health insurance coverage, and opt out forms must be filled out and submitted for any employee that opted out.
  4. Application MUST include most recent 2 years financial statements for applicant prepared by an outside CPA, and compilations with footnotes according to GAAP. 10Ks are acceptable for public companies
  5. Application MUST include Patents, Patents Pending, Copyright registered with the Library of Congress, Pending Copyright registration.
  6. Company MUST file all tax returns for the years the company is applying for by no later than June 28, 2013 (NO EXTENSIONS). 
  7. Company MUST meet the definition of a biotechnology or technology company as defined by NJEDA.
  8. Non-refundable application fee made payable to NJEDA for $2,500 is due at time of application cut off which is June 28, 2013, 2 p.m. 


CHANGES FROM 2012 TO 2013 REQUIREMENTS: 

  • Any company, tech or biotech, MUST be able to describe -- in a few sentences -- what they do,  what their Intellectual Property is, and how the Intellectual Property is part of the company's primary CORE business.  Two rule clarifications were approved by the NJEDA Board at its March 2013 Board Meeting, effective for the 2013 application cycle, as follows:
    1.  To qualify as a full-time employee, the individual must be an employee hired on a permanent basis or indefinite basis; or employed under a formal written agreement with an institution of higher education, if employed by the technology or biotechnology business on a permanent basis within a single position in which all of the other requirements of full-time employee are met; and the individual cannot be an intern, part-time employee, or in a temporary position.
    2.   In order to be considered Protected Proprietary Intellectual Property, the patented or exclusively licensed technology must be the technology of the applicant’s primary business and also be the technology that enables the applicant to meet the Biotechnology or Technology Business definition.

Below is a link to NJ EDA’s website for the program detail, application, frequently ask questions and recent webinar:
http://www.njeda.com/web/Aspx_pg/Templates/Npic_Text.aspx?Doc_Id=1138&men 

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