TRENTON, N.J. — A new bill introduced in the New Jersey Senate would triple the state’s tax credit for investments in emerging technology startups, aiming to stimulate early-stage funding in smaller high-tech firms.
Bill S4255, sponsored by Senator Andrew Zwicker (D-16), raises the tax credit under the “New Jersey Angel Investor Tax Credit Act” from 20 percent to 60 percent for qualified investments. The bill also boosts the maximum credit from 25 percent to 65 percent for investors who meet additional criteria, such as supporting women- or minority-owned businesses or investing in designated opportunity zones.
“The bill would increase the amount of the tax credit provided to taxpayers that make qualified investments from 20 to 60 percent,” according to the legislative statement.
Key Points
- Proposed bill would raise angel investor tax credits from 20% to 60%.
- Credit could reach 65% for investments in minority, women-owned, or opportunity zone businesses.
- Eligibility for companies revised by lowering employee cap from 225 to 150.
To qualify, a business must now have 150 or fewer employees, down from the previous 225-employee limit. Additionally, 75 percent of those employees must be based in New Jersey. Qualified businesses must also operate in fields such as biotechnology, renewable energy, medical devices, or information technology.
Investments eligible for the credit include cash transferred to qualified New Jersey tech businesses or qualified venture funds that reinvest in the state. Taxpayers may receive up to $500,000 in credits per year, with unused credits eligible for carryforward or refund.
The bill applies to taxable years beginning on or after January 1 following enactment and retains the annual cap of $35 million in total credits issued by the New Jersey Economic Development Authority.
New Jersey bill could make the state one of the most generous in the nation for angel tech investment incentives.
