The state rolled out its expansion to the Angel Investor Tax Credit program on New Year’s Day – an incentive aimed at enticing financiers to make investments into otherwise potentially risky New Jersey startups.

The New Jersey Economic Development Authority, which oversees the incentive, began accepting applications for the credits on its website on Jan. 1.

Proponents argue the program will help investors recoup some of the financial loss they might incur while contributing to technology startups.

Under the program, which was expanded to $25 million on Jan. 1, an investor can sell their tax credit for up to 20 percent of what they put into certain technology startups in the state, or 25 percent for investments into low-income communities, federal opportunity zones or businesses owned by women or people of color.

In both cases, the total amount is capped at $500,000, and the money they receive for selling the tax break is a guaranteed amount they will recoup in the event the investment fails or yields lackluster returns.

With the Angel Investor tax credit, the investment must be made into a company with no more than 225 employees.

The state announced in mid-December that it maxed out the number of applicants on the similarly-natured Net-Operating Loss credit program, which helps many of those same startup companies offset financial losses that come with research and development. Under NOL, technology and life sciences businesses can acquire R&D tax breaks, which can be sold for at least 80 percent of their value, capped at $15 million per business.

The $60 million allocated to the program this year will be spread among 46 companies, 12 of which are taking part in the NOL program for the first time, according to the EDA.

Proponents of the NOL program contend the incentive helps prop up budding companies hoping to develop new technologies in the state and finance their research. With much of that research unprofitable, many of those companies might lack the ability to expand their operations, or could even go out of business, without the added state support, proponents argue.

“With the enhancements to our Angel Investor Tax Credit signed into law by Gov. [Phil] Murphy, New Jersey now has one of the most progressive and potent tools of any state to encourage investment in early-stage innovative companies,” NJEDA Chief Executive Officer Tim Sullivan said in a statement released Friday. “With this tool in the toolkit, we will be able to attract and grow more of the growing companies that will inject new vitality into the Garden State economy.”