New Jersey Credit Regulations Amended

New Jersey adopted amendments to income tax regulations governing the:

  • Economic Redevelopment and Growth Program;
  • Grow New Jersey Assistance Program; and
  • Angel Investor Tax Credit Program.

In addition, all regulations governing New Jersey Economic Development Authority assistance programs were readopted. This includes the regulations that were amended.

Economic Redevelopment and Growth Program

Tax credits are available for certain residential or university infrastructure projects or certain mixed-use parking projects. Among other things, the regulatory amendments revised several program definitions.

The definition of “qualified residential project” reflects the extended the deadline for submitting a temporary certificate of occupancy from July 28, 2018, to July 28, 2019.

In addition, the definition of “qualifying economic redevelopment and growth grant incentive area” or “incentive area” allows existing rural development areas zoned for industrial use to be eligible under the program.

Grow New Jersey Assistance Program

Tax credits are available for the creation or retention of jobs in the state. Among other things, the regulatory amendments:

  • revise the definition of “qualified incentive area” to allow existing rural development areas zoned for industrial use to be eligible for the program;
  • amend the definition of “withholdings” to delete a provision on the calculation of withholdings for certain out-of-state employees, so that the definition reflects actual withholdings pursuant to the New Jersey and Pennsylvania reciprocal personal income tax agreement;
  • create new definitions for purposes of the increased tax credit amounts for certain businesses that have collaborative research relationships with colleges or universities;
  • clarify that fees for changes, additions, or modifications to the tax credit apply for projects with total tax credits of $5 million or less;
  • establish the base amount of the tax credit as $5,000 per year for each new or retained full-time job for a facility located in a Garden State Create Zone and used in a targeted industry to conduct a collaborative research relationship with a doctoral university in the zone;
  • authorize an increase in the tax credit for each new or retained full-time job at certain research facilities on or near a college or university campus;
  • limit the tax credit for each new or retained full-time job at certain facilities in a Garden State Create Zone to $12,000 per year; and
  • limit the annual amount of tax credits in a Garden State Create Zone to $10 million.

Angel Investor Tax Credit Program

Tax credits are available for qualified investments in an emerging technology business or holding company. Among other things, the regulatory amendments:

  • refer to New Jersey emerging technology business holding companies;
  • add or modify various definitions;
  • clarify that an investor must make a qualified investment in a New Jersey emerging technology business or a New Jersey emerging technology business holding company;
  • provide that the program applies to investments for carbon footprint reduction technology effective May 1, 2017;
  • set a deadline of December 31, 2017, for applicants who made investments in emerging technology business holding companies in tax years before May 1, 2017;
  • require the verified transfer of funds to be supported by certain documentation;
  • add application submission requirements for emerging technology business holding company information;
  • clarify that a taxpayer is allowed a 10% credit for investments in an emerging technology business or holding company that transfers funds to a New Jersey emerging technology business; and
  • provide that an S corporation shareholder is allowed a proportionate share of the S corporation’s credit.

Effective and Expiration Dates

The amendments are effective June 4, 2018. The readoption of all regulations governing New Jersey Economic Development Authority assistance programs is effective May 8, 2018.

All regulations governing New Jersey Economic Development Authority assistance programs expire May 8, 2025.

N.J.A.C. 19:31, New Jersey Economic Development Authority, effective as noted

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CCHTaxGroup

All stories by: CCHTaxGroup