Tax Alert: New Jersey Angel Investor Tax Credit Act

To encourage investment and growth in New Jersey's emerging technology businesses, the New Jersey Angel Investor Tax Credit Act was enacted into law on January 31, 2013.   If all of the requirements are met, business and individual investors will be able to take a credit against their corporate or gross income tax of up to 10% of their investment.

Some of the requirements include:

  • The investment must be a "qualified" investment, which is a non-refundable transfer of cash to a New Jersey emerging technology business or a qualified investment as follows:
    • A transaction in exchange for stock
    • Interest in partnerships or joint ventures
    • Licenses (exclusive or non-exclusive)Rights to use technology
    • Marketing rights
    • Warrants or options
    • Purchase, production or research agreement
  • The investment must be made in a "New Jersey emerging technology business" which is defined as a business which:
    • Has fewer than 225 employees of whom at least 75 percent are in a position located in New Jersey; and
    • Will operate in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology; and
    • Will incur qualified research expenses in New Jersey or will conduct pilot scale manufacturing or technology commercialization in New Jersey.
  • The credit is subject to a maximum limitation of $500,000 per year for each qualified investment.
  • The total benefits available under this program are subject to an overall limitation of $25,000,000 per year for all participants.
  • The tax credit determination will be administered by the New Jersey Economic Development Authority (NJ EDA). Procedures to claim the credit have not yet been released by the NJ EDA.
  • The credit is effective for investments made on or after January 1, 2012.  

For more information please contact your advisor at Wilkin & Guttenplan PC or contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. or 732 846 3000.

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