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NJ Tax Credit Program Expected to Launch July 1, 2013

The state's 10% angel investor tax credit program, a move intended to spur growth in emerging technology industries, is expected to launch July 1, 2013. 

The credit was authorized by the Angel Investor Tax Credit Act that was signed by Governor Chris Christie in January for tax periods beginning on or after January 1, 2012.

The program provides credits against the New Jersey corporation business tax or an individual’s gross income tax for 10% of a qualified investment in an emerging technology business with physical presence in New Jersey.  To qualify, the technology business must employ fewer than 225 employees, 75% of whom must work in New Jersey.  Businesses must also conduct at least one of the following eligible technologies in New Jersey: advanced computing, advanced materials, biotechnology, electronic devices, information technology (including film and TV production), life sciences, medical devices, mobile communications, and renewable energy.  (See EisnerAmper article on New Jersey 10% Angel Investor Tax Credit  from February 4, 2013.)

On June 12, 2013, the NJ Economic Development Authority Board announced the approval of the Angel Investor Tax Credit Program and the proposed regulations.  The application is expected to be available on July 1, 2013.  The application is a two part application requiring the taxpayer (i.e., investor) complete the first part.  The second part will require the emerging technology business to complete certain information prior to submission to the NJ Economic Development Authority (“Authority”).  If the applicant is a partnership, or taxed as a partnership, the percentage distribution to the ultimate taxpayers will be required.  Once the application is reviewed and deemed complete, the Authority Board will approve, wait out the gubernatorial veto period and then send a notice to the Division of Taxation to issue the tax credit summarizing the amount by the percentage distribution provided.

For more information on the Angel Investor Tax Credit Program, including FAQs as of June 11, 2013, visit www.njeda.com/angeltaxcredit.

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