Fillable Form 304 - New Jobs Investment Tax Credit

Form 304-A

Instructions for Form 304

(07-15, R-23)

New Jobs Investment Tax Credit

FOR TAXABLE PERIODS BEGINNING ON AND AFTER JANUARY 1, 2014

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 than

or more years.

a new business facility, resulting from acquisition, construction,

Examples of qualified investments may not include:

reconstruction, installation or erection of improvements or additions to

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

existing property if such improvements or additions are purchased

lease it to another person;

during tax years beginning after July 7, 1993, but only to the extent of

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

a taxpayer’s qualified investment in such improvements or additions.

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

2. New Business Facility means a business facility which:

capitalized and not expensed;

3. Airplanes;

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

subject to the New Jersey Corporation Business Tax Act, N.J.S.A.

4. Property primarily used outside New Jersey;

54:10A-1 et seq.

A business facility does not qualify if the

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

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

assets of the seller;

another person.

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

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

with any reasonable degree of accuracy at the time such property

beginning after July 7, 1993;

is placed in service or use.

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

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

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

the following annual payroll and annual gross receipts amounts:

prior to transfer of the title to the facility.

Tax Year

Beginning In

Payroll

Gross Receipts

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

permanent position which did not exist prior to the qualified

2010

$6,049,550 or less

$12,099,150 or less

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

2011

$6,134,950 or less

$12,269,950 or less

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

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

2012

$6,403,500 or less

$12,807,100 or less

investment is placed in service or use.

Temporary or seasonal

2013

$6,532,200 or less

$13,064,500 or les

employees are not considered new employees for the purposes of this

2014

$6,599,500 or less

$13,199,150 or less

tax credit. The position held by the employee may be full-time or part-

time. Full-time means employment for at least 140 hours per month

2015

$6,701,750 or less

$13,403,650 or less

at a wage not less than the State or Federal minimum wage. Part-time

6. Aggregate Annual Credit

means customarily performing such duties at least 20 hours per week

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

for at least six months during the tax year. The hours of part-time

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

employees shall be aggregated to determine the number of full-time

plus

equivalent jobs for the purposes of determining the number of eligible

new jobs to be used in the computation of the new jobs factor.

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

The taxpayer cannot claim a credit for the number of new employees

year.

that exceeds either the increase in the taxpayer’s average

This amount is calculated in Part II of Form 304.

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

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

7. Tax Credit Limitations

individuals included in the determination of the Urban Enterprise Zone

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

Employees Tax Credit or the Redevelopment Authority Project Tax

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

Credit must be excluded in the determination of this tax credit.

tax year which is attributable to and the direct result of the taxpayer’s

qualified investment and shall not reduce the tax liability for the tax

4. Qualified Investments are those real and tangible personal property

year to an amount less than the required statutory minimum.

investments purchased for business relocation or expansion in New

If any amount of the aggregate annual credit remains after the above

Jersey. Such investments shall include only:

limitations are applied, that amount may be refunded to the taxpayer.

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

The amount of the refund cannot exceed 50% of the sum of the

years beginning after July 7, 1993;

property taxes paid in the tax year and the implicit property taxes paid

2. Tangible personal property with respect to which depreciation with

through rent or lease payments which are attributable to and the direct

a recovery period of three or more years is allowable;

result of the taxpayer’s qualified investment. If the taxpayer is unable

3. Tangible personal property moved by the taxpayer into New Jersey

to ascertain these amounts, the attributable property tax amounts shall

provided that the property has a remaining recovery period of three

be determined by multiplying the total New Jersey property taxes paid

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Form 304 - New Jobs Investment Tax Credit - 2015 Page 3

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