On January 31, 2013 Governor Chris Christie signed the New Jersey Angel Investor Tax Credit Act. The Act will help to encourage early stage or “angel” investment in emerging technology companies in New Jersey by providing angel investors with tax credits. Corporate taxpayers or high net worth individuals who provide financial backing for small startups or entrepreneurs can use these tax credits to offset New Jersey corporation business or gross income taxes.
Under this new legislation, the angel investor will receive a tax credit equal to 10 percent of the qualified investment made by the taxpayer in a New Jersey emerging technology business. To qualify as a New Jersey emerging technology business, a company must have fewer than 225 employees, 75% of whom are filling a position in New Jersey. Additionally, the company must be in one of the following industries:
- Advanced computing
- Advanced materials
- Electronic device technology
- Information technology
- Life sciences
- Medical device technology
- Mobile communication technology
- Renewable energy technology
Under the new Act, New Jersey taxpayers can receive a maximum credit of up to $500,000 in any given year. Corporate taxpayers can choose to either receive a refund on the excess tax credit or carry over the tax credit for a maximum of 15 years. All tax credit applications will be approved by the New Jersey Economic Development Authority in consultation with the Director of the Division of Taxation.
To view a copy of the bill, please click here.