New Jersey Launches Tax Incentives For Businesses
A recent bill passed in the State of New Jersey has created incentives for companies to reassign employees to a New Jersey location. The bill established a nonrefundable gross income tax credit of $2,000 for resident individuals who get permanently reassigned from an out-of-state location to a New Jersey location. The bill caps the tax credits awarded to qualified taxpayers at $10 million per state fiscal year on a first come, first serve basis.
The bill also enacted a $35 million per year pilot program that will provide grants to out-of-state businesses that reassign New Jersey resident employees from an out-of-state location into a New Jersey location. Companies approved for the grant will enter into an agreement with New Jersey establishing certain provisions, including the amount of the grant and the employees that the company will need to reassign. Businesses can receive disbursements equal to the New Jersey Gross Income Tax withholdings, up to a maximum of $500,000, of resident employees reassigned by the business to a New Jersey location. Clawback provisions apply for misleading statements or non-compliance with the agreement.
To be eligible to apply for a grant, a business:
In awarding the grants, the NJ EDA could require eligible businesses to make certain capital investments or provide compensation increases to the reassigned employees.
Companies that are potentially eligible may want to consider whether the incentives would benefit their business and New Jersey resident employees.
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