NJ S1026

Creates a manufacturing reinvestment account program allowing qualified small manufacturers (50 or fewer employees) to deposit up to $100,000 annually for five consecutive years into interest-bearing accounts at New Jersey financial institutions

Contributions to the account are fully deductible against income (gross income for individual taxpayers, entire net income for corporations), with a maximum $100,000 deduction per year

Account earnings are tax-deferred while funds remain in the account, and when withdrawn for qualified reinvestment expenditures, the earnings are taxed at half the normal rate

Qualified reinvestment expenditures include machinery or equipment purchases for New Jersey manufacturing facilities and workforce training, development, or expansion programs

Funds remaining in the account after the five-year period are automatically treated as distributed, with previously deferred earnings becoming fully taxable at regular rates