NJEDA Opens 2023 NOL Application

NJ Tech and Life Sciences Companies Can Now Apply to Sell Their Net Operating Losses & Unused Research & Development Tax Credits for Cash

The New Jersey Economic Development Authority (NJEDA) opened applications this week for its 2023 Technology Business Tax Certificate Transfer Program, commonly known as the Net Operating Loss (NOL) Program. The program enables early-stage technology and life sciences businesses in the Garden State to sell a percentage of their New Jersey net operating losses and unused research and development (R&D) tax credits to unrelated profitable corporations for cash.

The NOL Program is accepting applications through June 30, 2023, at njeda.com/nol. Participants can use the capital raised through the NOL Program to help cover allowable costs incurred in connection with operating their businesses such as salaries, R&D, and other working capital expenditures.

The New Jersey Economic Recovery Act of 2020 (ERA), which was signed into law by Governor Phil Murphy in 2021, increased the program’s annual cap from $60 million to $75 million. It also increased the lifetime cap for an individual applicant from $15 million to $20 million.

In line with Governor Murphy’s vision to create the most diverse and inclusive innovation ecosystem in the nation, $15 million of the $75 million program allocation will be reserved for the surrender of transferable tax benefits exclusively by eligible companies operating within the boundaries of the State’s three Innovation Zones of Newark, Camden, and the Greater New Brunswick area, companies located in Opportunity Zones, and/or women- or minority-owned businesses certified by the State of New Jersey. 

Since the program’s inception in the late 1990s, more than $1.17 billion in funding has been distributed to over 570 technology and life sciences companies. The average award for companies approved to sell their net operating losses through the program in 2022 was over $3.1 million.