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Assemblyman Christopher P. DePhillips Increased Tax Credit for Angel Investors in N.J. Tech Goes to Governor

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the staff of the Ridgewood blog

Trenton NJ, Assemblyman Christopher P. DePhillips (40-R) is close to successfully increasing the angel investor tax credit once again after doubling it in 2019. His bill incentivizing financial support for technology startups passed both the full Assembly and Senate on Monday, sending it to the governor’s desk for a signature.

The legislation (A2365/S3189) increases the tax credit to 35% from 20% of an investor’s qualified investment in an emerging technology business. If the early-stage company is located in a low-income community, or is minority or women owned, the tax credit increases to 40% from 25%.

“In order to be a leader in research and development, artificial intelligence, the life sciences and state-of-the-art advancements that touch every part of this state, New Jersey needs to be more attractive to startups and their investors,” DePhillips (R-Bergen) said. “New Jersey’s venture capital funding currently lags behind neighboring states. An enhanced tax credit will further reduce the financial risks assumed by investors, which makes New Jersey more attractive.”

New Jersey ranks 13th nationally in venture capital dollars flowing into the state, behind New York, Pennsylvania and Virginia. The size of credits available to angel investors in New Jersey also fall short of regional competitors like Maryland, Massachusetts and Connecticut.

“The goal here is to further incentivize investment in New Jersey’s early stage startups, not just to grow the technology industry, but to support jobs and stimulate the economy. This legislation signals to the industry that New Jersey can not only compete nationally, but globally in the innovation economy,” DePhillips said.

From 2014 through 2023, the New Jersey Economic Development Authority awarded $113.7 million in angel investor tax credits, incentivizing $996.4 million in qualified investments during that time.

The tax credit program has a $25 million annual cap. To qualify, the businesses cannot have more than 149 employees.

 

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