NJEDA Board Approves Rules for Emerge Job Creation Tax Credit Program 

On May 12, 2021

The New Jersey Economic Development Authority (NJEDA) Board today approved the creation of the Emerge program, a new jobs-based tax credit program created under the  Economic Recovery Act (ERA) of 2020.

The program is available to projects that invest private capital into the state and create good-paying jobs, with a focus on the state’s priority sectors, which include: technology; life sciences, offshore wind, clean energy, advanced manufacturing, food & beverage (non-retail), financial and professional services, and transportation and logistics.

During the public comment period on the draft EDA rules, NJBIA Vice President of Government Affairs Christopher Emigholz called Emerge a “transformational tool for economic growth in New Jersey.”  In a memo to NJEDA CEO Tim Sullivan, Emigholz outlined NJBIA’s support of the program and provided a series of recommendations to improve the law in the rule-making process.

Through the Emerge program, small and large businesses, as well as nonprofits, 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 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.

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 ERA sets the amount of tax credits for each retained job at half the amount that would be awarded for equivalent new jobs.  Jobs that are covered by a labor harmony agreement are eligible for an additional $1,000 bonus over the capped amounts.

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% 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 duration of the tax credit period. 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.

“Creating good jobs for New Jerseyans is central to my administration’s efforts to build a stronger, fairer New Jersey. It is even more important as we begin our recovery from the economic devastation of the COVID-19 pandemic,” said Gov. Phil Murphy. “The Emerge program is a well-crafted, targeted tax incentive program that will drive job creation and equitable economic growth throughout New Jersey.”

“The Emerge program rules approved today will open the door to exciting new economic development projects that will drive growth in communities across New Jersey while also remaining true to our commitments to equity, transparency, and accountability,” said NJEDA’s Sullivan.  “This is an important step forward that will set New Jersey on the path to long-term, sustainable, and fair economic success.”

The complete rules for the Emerge program, including eligibility, award sizes, and other information, are available at  https://www.njeda.com/emerge.

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