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NET OPERATING LOSS (NOL) PROGRAM ERA-UPDATE


The expanded Net Operating Loss (NOL) Program enables tech and life sciences companies to sell their New Jersey net operating losses and/or research and development (R&D) tax credits for cash. Buyers can purchase tax credits at a discount and apply them to reduce taxable income.   

ELIGIBILITY

In order to participate in the NOL Program, a company must:

  • Have protected and proprietary intellectual property (PPIP that is exclusive to the applicant company).
  • Employ up to 225 full-time employees that live and work in the United States and who receive health care coverage. At least a portion of these employees must live and work in New Jersey.
  • Have net operating loss carryover and/or R&D tax credits in New Jersey.
  • Have NO positive net operating income for the last two years.
  • File Corporate Business Tax returns in New Jersey.

AWARD SIZE

The NJEDA works in conjunction with the NJ Division of Taxation to determine awards given through the NOL Program. The program is subject to an annual cap of $75 million. Companies participating in the program are subject to a lifetime cap of $20 million.

Applicants are encouraged to contact an NJEDA officer to get a better understanding how to calculate their potential award.  

  

The statute creating the NOL Program is available here: Statutes

The NOL Administrative Code is available here: Administrative Code

The NOL Program was updated as part of the NJ Economic Recovery Act of 2020. The full statutory update can be found in sections 113-114.

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