The R&D Tax Credit is back! Find out how the Big Beautiful Bill Act can fund your R&D. Learn More
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New Jersey offers a strong Research and Development Tax Credit program that rewards companies performing qualified research activities in the state. The credit is available to both C-corporations and S-corporations subject to New Jersey Corporation Business Tax, and it can be claimed alongside the federal R&D credit.
The New Jersey credit equals 10% of qualified research expenses (QREs) that exceed a base amount, plus an additional 10% of basic research payments made to qualified institutions within the state. QREs follow the federal IRC §41 rules but apply only to activities conducted in New Jersey, such as:
To claim the credit, corporations file Form CBT-100 or BFC-1 along with Schedule A-3, Research and Development Credit. Unused credits may be carried forward for up to 15 years, but they are not refundable. However, certain technology and biotech companies may benefit from the New Jersey Technology Business Tax Certificate Transfer (NOL) Program, which allows the sale of unused R&D credits and net operating losses for cash.
📄 New Jersey Division of Taxation – R&D Credit Overview
📄 Schedule A-3 Instructions (PDF)
It’s important to note that New Jersey’s program is especially valuable for high-growth technology, biotech, and life sciences companies, since the ability to monetize unused credits through the NOL Transfer Program is unique among states. Strategic planning ensures you capture both immediate savings and long-term carryforwards. Our team helps companies document, model, and file their claims to maximize every available benefit.
Starting in tax year 2025, businesses can now immediately deduct domestic R&D expenses in the year they occur instead of spreading deductions over five years. The bill also offers refund opportunities for small businesses and faster deduction schedules for larger companies.
If your business has $31 million or less in annual gross receipts, you may be able to:
File amended returns for 2022–2024 to get cash refunds for previously capitalized R&D costs
Deduct remaining unamortized R&D expenses faster starting in 2025
Apply your R&D credit against payroll taxes—up to $500,000 per year for qualifying startups
Yes. Eligible small businesses can retroactively deduct R&D costs from 2022–2024 and claim refunds. Even larger companies can accelerate the deduction of past R&D costs over one or two years starting in 2025.
No. The 15-year amortization rule for foreign R&D remains in place. The new immediate expensing option only applies to U.S.-based research and development.
Savings vary, but many businesses may recover hundreds of thousands of dollars through a combination of:
Full expensing of domestic R&D costs
Retroactive refunds for 2022–2024
Annual R&D tax credits (often worth 5–10% of qualifying expenses)
Startups with less than $5 million in annual revenue can use the R&D credit to offset payroll taxes—up to $500,000 per year—resulting in quarterly cash refunds, even without taxable income.
Work with our expert team at TaxTaker. We help innovative companies like yours identify, document, and claim the maximum R&D tax credit available—while ensuring you stay fully compliant with IRS requirements. Our team specializes in both federal and state R&D tax credits, and we know how to uncover hidden value by reviewing past filings for potential refund opportunities. With the new 2025 rules in place, we’ll build a tailored strategy that maximizes your savings now and in the years ahead. That’s why businesses across the country trust TaxTaker to deliver results they can count on.
Working with TaxTaker is risk free. TaxTaker collects a success fee only if you qualify for a tax credit.
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