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Angel Investor Tax Credit Program

For the calendar year 2020, the Angel Investor Tax Credit Program will accept applications for review until 11:59 pm on November 1st, 2020 for consideration of an approval for the 2020 approval year.  Please note that submitted applications must be complete, with all required documentation including necessary tax clearances for the company and the investor.  Any applications received after November 1st, 2020 will be considered part of the 2021 Angel Tax Credit Program Year. 

To accommodate COVID-19 interruptions, applications submitted by Nov 1st, 2020 will be processed through the remainder of 2020 and into 2021 for the 2020 program year. Applicants continue to have six months from the date of investment to submit an application.


All investors that invest in a qualifying NJ emerging technology business may benefit from a tax credit through the Angel Investor Tax Credit Program.


  • 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

  • Uses

    Qualified investment in a NJ emerging technology business

  • Benefits

    Credits against corporation business or gross income taxes


    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


    See more detailed eligibility criteria below


APPLICATION DEADLINE:

Applicants have six months from date of investment to submit an application to the New Jersey Economic Development Authority.  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.


PROGRAM DETAILS:

Up to $25 million of Angel Investor Tax Credit may be approved per calendar year. If the cumulative credits claimed by taxpayers exceed the amount available in a given year, then credits will be applied in the order in which applications are received and complete, starting on the first day of the succeeding calendar year in which Angel Investor Tax Credits do not exceed the amount of credits available.

ELIGIBILITY:

To be eligible, the New Jersey emerging technology business must meet the following 4 criteria:

  • Employs fewer than 225 full-time employees, at least 75% of whom work in New Jersey
  • 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
    • a purchase, production, or research agreement.
  • Credits may be treated as an overpayment and refunded (but no interest on the overpayment will be paid.), For corporate taxpayers, the tax credits may be carried over up to 15 tax years following the tax year for which the credit was allowed.   Individuals cannot carryforward the tax credits.
  • Credits may not be carried forward in a tax year in which the taxpayer was a target for corporate acquisition or in which the taxpayer was party to a merger or consolidation unless the taxpayer can demonstrate to the New Jersey Division of Taxation the identity of the acquiring corporation.
  • Credits may be claimed on the taxpayer's New Jersey tax return in the tax year applicable to the effective date of approval.
  • Applications should be submitted by the angel investor entity, if applicable, or the individual angel investor.  The New Jersey emerging technology business also will need to fill out a section of the application and provide certain information with the submission, though the angel investor is responsible for all application information.

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.

Please click here for a link to the application for M/WBE certification.

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.

Please click here for the NJ Community Asset Mapping Tool for assistance with identifying eligible locations.

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.
   

* Any proposed amendments to the program rules can be found on the Proposed New Rules/Amendments page

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 AngelTaxCredit@njeda.com.