306: Research and Development Tax Credit and Instructions (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
Form 306 calculates the 2025 New Jersey Corporation Business Tax Research and Development Tax Credit. It reports qualifying research expenses and payments, credits carried forward or received from partnerships, and the allowable credit and carryforward.
Who files this form
Corporations claiming the credit for increasing research activities must complete Form 306 and include it with their tax return. Only research performed in New Jersey qualifies.
- Include the appropriate credit form for the year the credit was earned, even if you are not claiming the credit on that year's return.
- A New Jersey S corporation may claim the credit up to its New Jersey Corporation Business Tax liability. It cannot pass the credit through to shareholders.
- Partnerships must complete the applicable parts of Form 306 to report the credit to corporate partners. The partnership cannot use the credit itself.
- Corporate partners must complete Form 306 to claim their share of a partnership's credit.
- For a combined return, the member that earned or purchased the credit must complete a separate Form 306.
What you'll need
Have these forms and records available, as applicable:
- Federal Form 6765 as filed with the IRS. Attach a copy. Cannabis licensees should follow the special calculation and detailed-rider requirements.
- Research expense information: qualified wages, supplies, computer rental or lease costs, contract research expenses, basic research payments, and amounts paid or incurred to energy consortia in New Jersey.
- Prior-year information: credit carryforwards and the research expense or gross receipt information required by your calculation method.
- Schedule NJK-1: corporate partners must attach the NJK-1 showing their share of the credit.
- Transfer certificate: attach a copy if claiming credits purchased through the Economic Development Authority's Technology Business Tax Certificate Transfer Program.
- Tax return information: tax liability, required minimum tax, and other credits already applied.
How to file
Include the completed Form 306 with your CBT-100, CBT-100S, or CBT-100U return to validate the claim. The supplied text does not give a mailing address or e-file directions.
- Complete Parts I and II as applicable. Use Part III for the regular credit method or Part IV for the alternative simplified credit method. Use the same method used for federal purposes, subject to the special rules for cannabis licensees.
- Complete Part V to calculate the total available credit, including carryforwards and credits received from partnerships.
- CBT-100 and CBT-100S filers complete Part VI. Report the allowable credit on Schedule A-3, Part I.
- CBT-100U filers complete Part VII, Section A, and check the combined-return box. Members not sharing their credit must also complete Section B and fill in the nonsharing oval. Report the allowable credit in the member's column of Schedule A-3, Part I.
Partnerships: Complete Parts I, II, either III or IV, and V. Attach Form 306 to NJ-CBT-1065. Include each corporate partner's share of qualifying activities and the credit in Schedule NJK-1, Part IV, Supplemental Information. Do not complete Parts VI or VII.
Common mistakes
- Using the wrong year's form or recalculating old credits. Use the version for the tax period you are filing. Report prior-year carryforwards on line 29 without recomputing them.
- Counting the same expenses toward prohibited credits. Amounts used for this credit cannot also be used for the Recycling Equipment, Manufacturing Equipment and Employment Investment, New Jobs Investment, or Angel Investor tax credits.
- Including excluded federal-credit expenses. Do not include wages used for the Federal Jobs Credit or expenses and payments used for the federal Orphan Drug Credit.
- Using the credit against the Corporate Transit Fee. This is not allowed.
- Completing Part VI for a combined return. Combined return filers must use Part VII instead.
- Leaving out other credits already applied. List them where required so the allowable credit is calculated correctly.
Questions people ask
What is the New Jersey research credit rate?
The credit rate is fixed at 10%, regardless of which credit calculation method applies. The amount you can use is subject to tax liability limits.
Can unused credit be carried forward?
Generally, unused credit can be carried forward for seven accounting years following the year it arose. Qualifying research in advanced computing, advanced materials, biotechnology, electronic device technology, environmental technology, and medical device technology may qualify for a 15-year carryforward.
Must a combined-group member share its credit?
No. A member may choose not to share. It must still complete Part VII, Section A, as well as Section B, and fill in the nonsharing oval at the top of the form.
Can a cannabis licensee claim the credit?
A registered cannabis licensee that deducts a qualified research expense on its New Jersey Corporation Business Tax return may also claim that expense for this credit, even if it was disallowed for the federal research credit. The licensee must include a detailed rider explaining the calculations and complete Part III or IV based on the method it would have used.