On June 30, 2016, Governor Christie signed to law Senate Bill 2376/Assembly Bill 4002, which modifies the tax credit payment schedule for Business Employment Incentive Program (“BEIP”) Grant recipients converting their cash grants to tax credits.
The Legislature and Governor enacted a law in January allowing businesses to convert outstanding BEIP Grants into tax credits. The law provided that BEIP Grants accrued but not paid during years 2008-2013 were to be redeemable as tax credits over a five-year period starting in the 2017 tax accounting or privilege period of the business.
S-2376/A-4002 revises the tax payment credit schedule so that only 5 percent of the tax credit is redeemable in 2017. Twenty percent would be redeemable in 2018, with 25 percent redeemable in years 2019, 2020, and 2021. The change was required due to the projected budgetary shortfall in Fiscal Year 2017, which the State Treasurer announced on May 18, 2016.
If your business is still considering a BEIP conversion, the deadline to opt-in is the close of business on July 11, 2016. Gibbons can assist your company with the process of evaluating and implementing a conversion.