The New Jersey R&D tax credit, explained
New Jersey's R&D credit is 10% of qualified research spending above a base amount, with a program letting unprofitable companies sell it for cash.
Last verified July 2026 against New Jersey Division of Taxation guidance.
The short answer
Yes. New Jersey offers a research and development credit modeled closely on the traditional federal credit method. It equals 10% of qualified research expenses above a base amount, plus 10% of basic research payments to outside research organizations.
How the New Jersey credit works
The base amount uses the same fixed-base-percentage approach the federal credit used before 2018, applied to New Jersey gross receipts and research spending. The credit only applies against the Corporation Business Tax, so it is available to C corporations and S corporations, not to individual pass-through owners on their personal returns.
The credit itself is nonrefundable and cannot reduce Corporation Business Tax below the statutory minimum. What makes New Jersey different is a separate program: the Technology Business Tax Certificate Transfer Program, run by the New Jersey Economic Development Authority, lets qualifying unprofitable technology and biotechnology companies sell their unused net operating losses and R&D credits to other companies for cash.
How it stacks with the federal credit
New Jersey's credit stacks with the federal R&D credit, worth roughly 6% to 10% of qualified spending. Startups under $5 million in revenue can apply up to $500,000 of the federal credit against payroll tax each year, and New Jersey's credit-sale program can add cash on top of that for qualifying small tech and biotech companies.
Picture a New Jersey biotech startup with 17 scientists and an average salary of $155,000, or about $2.635 million in wages. If qualified research spending comes to $2.4 million for the year, and the New Jersey base amount works out to $800,000, the incremental $1.6 million produces about $160,000 in New Jersey credit at 10%.
At a federal rate near 8%, the same spending could produce about $192,000 in federal credit, most of it usable against payroll tax right away. If the company is unprofitable and meets the technology-business-transfer program's requirements, including owning patents or copyrights and staying under the employee caps, it could also sell its unused New Jersey credit for cash, generally at not less than 80% of face value. This is an example, and actual figures depend on wages, base-period calculation, and approval into the transfer program.
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Eligibility and how to claim it
Any C corporation or S corporation subject to New Jersey's Corporation Business Tax that does qualified research in New Jersey can calculate the base credit. The research has to meet the same four-part federal test used everywhere else.
Companies claim the credit on Form 306, Research and Development Tax Credit, filed with Form CBT-100. Companies that want to sell an unused credit for cash instead have to separately qualify for the Technology Business Tax Certificate Transfer Program, which requires proprietary intellectual property, audited financials, and staying under program employee limits, and apply during that program's annual window.
Claimship prepares the research study behind Form 306. Your CPA is the one who files Form 306 with the New Jersey Division of Taxation, and who handles any application to the credit transfer program with the New Jersey Economic Development Authority.
Official source: New Jersey Division of Taxation.
Carryforward and deadlines
Form 306 is filed with the annual Corporation Business Tax return, due April 15 for calendar-year filers, with no separate application needed for the base credit.
Unused credit carries forward 7 years, or 15 years for research in fields like biotechnology, advanced computing, and medical device technology. The Technology Business Tax Certificate Transfer Program runs on its own annual application cycle with a capped pool of funding, so companies that want to sell a credit need to apply within that window rather than any time during the year.