Recent Regulations and Resources

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Emerge Tax Credit Program

Updated:
May 12, 2021

Program Applications Are Not Yet Open

The Emerge program is a new jobs-based tax credit program. The Emerge program will drive economic development in New Jersey by making tax credits available to projects that invest private capital into the State and create good-paying jobs, with a focus on the State’s priority sectors such as technology and life science. Applications for the Emerge program will be available soon.

The complete Emerge program rules are available at http://www.njeda.com/emerge.

Tax Credits

Through the Emerge program, small and large businesses, as well as non-profits, can apply for tax credits to support projects that meet minimum capital investment and minimum job creation or retention requirements. Most projects will receive tax credits over a seven year eligibility period, starting after the New Jersey Economic Development Authority (NJEDA) confirms the applicant has completed its investment and hired workers.

Base tax credits will range from $500 to $4,000 per job, per year depending on location and other aspects of the project. Bonuses are also available based on project location, industry, and alignment with other policy objectives. These bonuses can increase annual per-job credits to a maximum of $8,000 per job. Jobs that are covered by a labor harmony agreement are eligible for an additional $1,000 bonus over the capped amounts.

Projects with significant numbers of retained jobs (either 500 or 1,000 jobs depending on the project’s location) can receive tax credits for retained jobs, however the Economic Recovery Act (ERA) sets the amount of tax credits for each retained job at half the amount that would be awarded for equivalent new jobs.

Eligibility

To be eligible for tax credits under the Emerge program, projects must create at least 35 new, full-time jobs. This job creation requirement is lower if a business is primarily engaged in a targeted industry or if a business meets the definition of a “small business” in the program rules. Additionally, at least 80 percent of incented employees’ work time must be spent in New Jersey, and the business must commit to stay in the incented location for at least 1.5 times the length of time the project will receive tax credits. Projects may make an equivalent donation to a local Recovery Infrastructure Fund in place of investing in their project’s facility. Some requirements are relaxed for small businesses.

All projects that receive tax credits under the Emerge program must meet minimum environmental standards, meet prevailing wage obligations for all construction workers and building service workers, and provide health care for employees. Projects that have a total cost of $10 million or more are also required to enter into a Community Benefits Agreement with the NJEDA and the municipality or county in which the project is located. These agreements will create a Community Advisory Committee to monitor compliance with the respective agreement.

To ensure a strong return on investment for New Jersey taxpayers, projects that receive tax credits under the Emerge program must yield a minimum net positive economic benefit to the state of 200 to 400 percent depending on project location and awards will be limited to the amount the NJEDA determines is necessary to induce the project to locate in New Jersey. The NJEDA will also review detailed financial information about the project to verify the award of tax credits is a “material factor” in the decision to create or retain jobs in New Jersey.

Program Cap

The Emerge program is capped with the Aspire program – a separate ERA program designed to catalyze community redevelopment – at $1.1 billion over six years. Any remaining tax credits left after those six years will be available in a seventh year. To ensure the benefits of the program are distributed equitably throughout the state, the Emerge and Aspire program cap is split between northern and southern counties for the first three years of the program.

Applications

The new Emerge program application will be available soon. Potential applicants can complete an expression of interest form on the NJEDA's program page.

The new Emerge program application is expected to be available in late May 2021 and early June, respectively. If you are a potential applicant that may want to apply in the first few months of these programs, complete an expression of interest form on the New Jersey Economic Development Authority's (NJEDA) program page.

Emerge is part of the suite of programs created under the Economic Recovery Act of 2020, run by the NJEDA.

Source:

NJEDA