EDA approves rules for PPE manufacturing tax credit program (up to $500K per year)

New Jersey companies producing personal protective equipment can now earn up to $500,000 in tax credits, according to the recently approved rules of a new program by the New Jersey Economic Development Authority, the EDA announced Tuesday.

Those who have been producing PPE may qualify for past work, too.

Tax credits are available for entities that invested in PPE manufacturing and hired additional employees after March 9, 2020. This includes entities that started manufacturing PPE after this date or those that manufactured PPE before March 9, but increased manufacturing and hired additional employees after that date.

The credits, earned under the Personal Protection Equipment Manufacturing Tax Credit program, are meant to incentivize companies to make PPE in the state — a safeguard, should the need for massive amounts of PPE ever be reality again.

In order to receive tax credits, the project must:

  • Manufacture PPE, such as coveralls, face shields, gloves, gowns, masks, respirators, safeguard equipment and other equipment designed to protect the wearer from the spread of infection or illness;
  • Create a minimum number of new jobs;
  • Meet a minimum investment threshold for new construction or the improvement or fit-out of existing facilities;
  • Be located in an approved redevelopment or rehabilitation area, Smart Growth Area or a facility engaged in a research collaboration or an apprenticeship or preapprenticeship program with a New Jersey educational institution or in a large, long-vacant building.

A bonus credit may be awarded for PPE that is manufactured in facilities located in the seven South Jersey counties of Atlantic, Burlington, Cape May, Cumberland, Gloucester, Ocean and Salem.

Please note, projects that receive tax credits through the program must comply with the EDA’s labor and wage requirements, found here.

Comprehensive eligibility and bonus criteria can be found here.

“This program is designed to encourage PPE manufacturing here in New Jersey, which will help create new manufacturing jobs, protect New Jerseyans’ health, and increase economic benefits to the state by generating economic activity and providing more local sources of PPE goods,” EDA CEO Tim Sullivan said.

The PMTC Program provides per-job tax credits to PPE manufacturing projects in New Jersey that have made or make investments in 2020, 2021 or 2022. Projects can receive up to a maximum of $500,000 in tax credits per year in which they make qualified investments.

Since applications must be submitted after a project is complete, potential applicants must ensure they plan ahead and pay prevailing wage for all work done on the projects to maintain eligibility for the program, EDA official said. For projects that are already underway, the prevailing wage requirements will only apply to work done after the proposed rules are filed with the Office of Administrative Law.

Applications for the PMTC program will open in the coming months. For immediate questions and to sign up for notifications of the PMTC Program launch, email PPEmanufacturingtaxcredit@NJEDA.com.