New Job and Income Tax Credits

Qualifying projects that invest private capital into the state and create a minimum of 35 full-time jobs.

Provides per-job tax credits ranging from $500-$8,000 per-job per year, based on project location, bonuses, and the net benefit to the state. Tax credits may directly offset tax liability or may be transferred or surrendered for 85-90% of their value.

Emerge provides tax credits to encourage economic development, job creation, and the retention of significant numbers of jobs in imminent danger of leaving the state. The newly created program is designed to assist businesses that build, acquire, or lease space in the State with plans to create or retain full-time jobs.

Eligibility is subject to a number of provisions, including a requirement that the award of tax credits, the resulting capital investment, and the resulting job creation or retention will yield a net positive benefit to the State ranging from at least 200%-400%, depending on location. Emerge also has minimum requirements and adjustments for the necessary capital investment based on the type of project, the size of the business, the types of jobs at stake, and other factors. The award requires NJEDA Board approval. The company’s CEO will also need to certify, under penalty of the law, each entry included in the application. Any construction contracts associated with the project must use prevailing wage labor rates and meet affirmative action requirements.

Projects under the Emerge and Aspire Programs are subject to a program cap of $1.1 billion per year for six years. Emerge Program awards are calculated on an annual per-job basis, with base credits for new jobs ranging between $500-$4,000 per job, depending on project location and other aspects of the project. Bonuses are also available based on project location, industry, and alignment with other policy objectives. These bonuses can increase annual per-job credits to a maximum of $8,000 per job. Jobs that are covered by a labor harmony agreement are eligible for an additional $1,000 bonus over the capped amounts. Tax credits awarded through Emerge can be used to offset Corporate Business Tax or Insurance Premiums Tax or can be transferred for no less than 85% of their value or surrendered to the New Jersey Division of Taxation for 90% of the value of the credits.

An award-size calculator can be found here.

Projects that invest in new or expanded business facilities that create new jobs in New Jersey.

Qualified companies can receive a maximum percentage of 20% of computed qualifying investment for small business taxpayers or 10% for other businesses.

The New Jobs Investment Tax Credit is given in five equal annual installments. The credit cannot exceed 50% of the portion of the Corporation Business Tax liability which is attributable to and the direct result of the taxpayer’s qualified investment and shall not reduce the tax liability below the statutory minimum. This tax credit is available for investment in new or expanded business facilities that create new jobs in New Jersey.

The investment must create at least five new jobs (50 for large businesses) and meet the median annual compensation requirement for the current tax year. New investment is not eligible for the credit unless the average value of all real and tangible personal property in the State has increased over the prior year. The facilities must have been purchased from an unrelated party during or after the taxpayer’s accounting period beginning on or after July 7, 1993, the effective date of this legislation. The taxpayer must employ the credit in a taxable activity and must not be used during the 90-day period prior to purchase. Investments that qualify for the Manufacturing Equipment and Employment Investment Tax Credit cannot also qualify for this credit.

The new employee must be a New Jersey resident, hired to fill a regular, permanent position in the State that did not exist prior to the qualified investment and would not exist but for the qualified investment. The employee must be unrelated to the taxpayer and must not have been employed by the taxpayer during the six months prior to the date the investment was placed in service or use. The taxpayer cannot claim a credit for a number of new employees that exceeds either the increase in the taxpayer’s average employment for the tax year or one-half of the taxpayer’s average employment for the year. Also, individuals counted in determining the New Jobs Factor must not be ones for whom the taxpayer is allowed an Urban Enterprise Zone or Urban Development Project Employees Tax Credit. A small or mid-sized business taxpayer must also meet the annual payroll and annual gross receipts requirements for the current tax year to qualify.   

Although there is no carryover provision for this tax credit, the amount of the unused annual credit may be refunded to the taxpayer subject to certain limitations. If any amount of the aggregate annual credit remains after the above limitations are applied, that amount may be refunded to the taxpayer. The amount of the refund cannot exceed 50% of the sum of the property taxes paid in the tax year and the implicit property taxes paid through rent or lease payments which are attributable to and the direct result of the taxpayer’s qualified investment.

Tax credit against corporation business tax liability for investments in certain manufacturing equipment and for certain increased employment.

Available from the New Jersey Division of Taxation, the Manufacturing Equipment and Employment Investment Tax Credit provides a credit against corporation business tax liability for investments in certain manufacturing equipment and for certain increased employment.

The manufacturing equipment portion of the credit is limited to 2% (4% for companies with 50 employees or less) of the net cost of qualified equipment up to a maximum allowed credit of $1 million. The employment investment portion of the credit is computed for each of the two succeeding years following the year a credit is allowed for the equipment investment. The tax credit in these years is limited to 3% of the net cost of qualified equipment, not to exceed $1,000 per job created directly related to the equipment.