Form 304 - New Jobs Investment Tax Credit - 2011 (Page 3 of 4) in pdf

Form 304-A

Instructions for Form 304

(1-12, R-18)

New Jobs Investment Tax Credit

FOR TAXABLE PERIODS BEGINNING ON AND AFTER JANUARY 1, 2011

The New Jobs Investment Tax Credit is available for investment in new or expanded business facilities that create

new jobs in New Jersey. Investments which qualify for this tax credit must be placed in service or use during tax years

beginning after July 7, 1993. The investment must create at least 5 new jobs (50 new jobs for large businesses) with a

median annual compensation of the threshold amount established for the particular tax year. Also, in order to claim this

tax credit, the average book value of all real and tangible personal property in New Jersey must have increased over the

prior year.

The New Jobs Investment Tax Credit is taken in five equal annual installments. The annual credit cannot exceed 50%

of that portion of the Corporation Business Tax liability which is attributable to and the direct result of the taxpayer’s

qualified investment and shall not reduce the tax liability below the statutory minimum. Although there is no carryover

provision for this tax credit, the amount of the unused annual credit may be refunded to the taxpayer subject to certain

limitations. Part III of Form 304 is used to determine the allowable credit amount as well as any potential refund amount.

1. Expanded Business Facility means any business facility, other

tax years beginning after July 7, 1993;

than a new business facility, resulting from acquisition, construction,

2. Tangible personal property with respect to which depreciation

reconstruction, installation or erection of improvements or additions

with a recovery period of three or more years is allowable;

to existing property if such improvements or additions are

3. Tangible personal property moved by the taxpayer into New

purchased during tax years beginning after July 7, 1993, but only to

Jersey provided that the property has a remaining recovery

the extent of a taxpayer’s qualified investment in such

period of three or more years.

improvements or additions.

Examples of qualified investments may not include:

2. New Business Facility means a business facility which:

1. Property with respect to which the taxpayer’s only activity is to

lease it to another person;

a) is employed by a taxpayer in the conduct of a business which is

subject to the New Jersey Corporation Business Tax Act,

2. Repair costs, including materials used in the repair, unless for

N.J.S.A. 54:10A-1 et seq. A business facility does not qualify if

federal income tax purposes, the cost of the repair must be

the taxpayer’s only activity with respect to such facility is to lease

capitalized and not expensed;

it to another person.

3. Airplanes;

b) is purchased and placed in service or use during tax years

4. Property primarily used outside New Jersey;

beginning after July 7, 1993;

5. Property which is acquired incident to the purchase of the stock

or assets of the seller;

c) was not purchased by a taxpayer from a related person;

6. Property for which the cost or consideration cannot be quantified

d) was not in service or use during the 90 day period immediately

with any reasonable degree of accuracy at the time such

prior to transfer of the title to the facility.

property is placed in service or use.

3. New Employee means a New Jersey resident, hired to fill a regular,

5. Small or Mid-sized Business Taxpayer means a taxpayer that

permanent position which did not exist prior to the qualified

has the following annual payroll and annual gross receipts amounts:

investment, and would not exist but for the qualified investment.

Tax Year

The employee must be unrelated to the taxpayer and must not have

Beginning In

Payroll

Gross Receipts

been in its employ during the six months prior to the date that the

qualified investment is placed in service or use. Temporary or

2006

$5,582,200 or less

$11,164,400 or less

seasonal employees are not considered new employees for the

2007

$5,679,550 or less

$11,359,100 or less

purposes of this tax credit. The position held by the employee may

2008

$5,836,700 or less

$11,673,400 or less

be full-time or part-time. Full-time means employment for at least

140 hours per month at a wage not less than the State or Federal

2009

$6,153,000 or less

$12,306,050 or less

minimum wage.

Part-time means customarily performing such

2010

$6,049,550 or less

$12,099,150 or less

duties at least 20 hours per week for at least six months during the

tax year. The hours of part-time employees shall be aggregated to

2011

$6,134,950 or less

$12,269,950 or less

determine the number of full-time equivalent jobs for the purposes

6. Aggregate Annual Credit

of determining the number of eligible new jobs to be used in the

The aggregate annual credit allowed for a tax year is the sum of:

computation of the new jobs factor.

1) one-fifth of the annual credit amount calculated for prior tax

The taxpayer cannot claim a credit for the number of new

years plus

employees that exceeds either the increase in the taxpayer’s

average employment in New Jersey for the tax year, or one half of

2) one-fifth of the annual credit amount calculated for the current

the taxpayer’s average employment in New Jersey for the tax year.

tax year.

Also, individuals included in the determination of the Urban

This amount is calculated in Part II of Form 304.

Enterprise Zone Employees Tax Credit or the Redevelopment

Authority Project Tax Credit must be excluded in the determination

7. Tax Credit Limitations

of this tax credit.

The New Jobs Investment Tax Credit is allowed as a credit against

that portion of the taxpayer’s Corporation Business Tax liability for

4. Qualified Investments are those real and tangible personal

the tax year which is attributable to and the direct result of the

property investments purchased for business relocation or

taxpayer’s qualified investment and shall not reduce the tax liability

expansion in New Jersey. Such investments shall include only:

for the tax year to an amount less than the required statutory

1. Improvements to real property placed in service or use during

minimum.

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Form 304 - New Jobs Investment Tax Credit - 2011 Page 3

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