New Jersey’s $35 million pilot program plans to keep tax dollars in the state

by Ricky Rillera

| Photo by Alex Kotliarskyi on Unsplash

TRENTON, NJ — The New Jersey Economic Development Authority (NJEDA) has created a $35 million new pilot program, New Jersey Reassigning In-State Employees (NJ RISE). This program will allow businesses principally located out of state to relocate their New Jersey residents to ensure residents’ income stays in New Jersey, which will help increase tax revenue.

“For far too long, other states have benefited [from] hardworking New Jerseyans, using their tax withholdings to fund budget priorities that grow other economies and fund out-of-state priorities,” said Governor Phil Murphy. “Through the NJ RISE program, we will be able to bring employee tax dollars back into our state to support initiatives that make New Jersey the best place to live, work, and raise a family.”

The grant is equal to the New Jersey Gross Income Tax withholdings of the reassigned resident employees during one tax year of the business, not to exceed $500,000 in the aggregate per business. The sum of all grants approved will not exceed $35 million per State fiscal year.

States such as Delaware, Nebraska, and New York use “convenience of employer,” where an employee who resides out of state is taxed based on the employer’s assigned location. For example, if a New Jersey resident works in a state with “convenience of employer” (State A) three days a week and from home the other two days, the employee will be taxed by State A for all five days because the work done from home in New Jersey was at the employer’s convenience.

“NJ RISE means more business within our borders, more in-state jobs for our residents, and more revenue to invest in our own downtowns and main streets. By launching these incentives, we’re driving innovation and keeping talent close to home,” said Senator Joe Lagana (D-Paramus). “This program ensures that NJ tax dollars stay here to serve as a catalyst for local advancement.”

For Senator Jon Bramnick (R-Westfield), “anytime we can bring tax dollars back to New Jersey from a competing state is a win in my book,” he said. The additional funding generated from NJ RISE will allow municipalities to support local projects and initiatives that benefit New Jerseyans, first and foremost.”

Eligible businesses must have 25 or more domestic full-time employees and be principally located in another state. Applications for the NJ RISE program are expected to open later this year. Potential applicants seeking more information on the program can send questions to njrise@njeda.gov.

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