New Jersey Research and Development Tax Credit

Program Overview

New Jersey provides a research and development credit based largely on the federal Section 41 framework as applicable under New Jersey law. The state research credit is permanent and does not have a scheduled expiration. Separately, the Technology Business Tax Certificate Transfer Program allows qualifying emerging technology and biotechnology companies to transfer certain unused research credits and net operating losses to unrelated New Jersey taxpayers, subject to program requirements and approval by the New Jersey Economic Development Authority. The transfer program operates within an annual statewide allocation.

Eligibility

• Corporations subject to the New Jersey corporation business tax with qualified research expenses incurred in New Jersey may qualify for the research credit.
• Research activities and expenses must meet applicable New Jersey requirements based on the relevant federal Section 41 framework.
• Transfer of unused credits requires NJEDA approval and additional eligibility requirements.
• Businesses seeking to transfer credits must meet the applicable technology or biotechnology business requirements.

Benefits

• Non-refundable research credit applied against New Jersey corporation business tax liability.
• Qualifying technology and biotechnology companies may be eligible to transfer unused research credits through the Technology Business Tax Certificate Transfer Program.
• Eligible companies may also transfer qualifying net operating losses under the program, subject to applicable requirements.
• Transfers are subject to NJEDA approval and the program's annual allocation.