jest.config.js

// jest.config.js
const nextJest = require('next/jest');

const createJestConfig = nextJest({
	// Provide the path to your Next.js app to load next.config.js and .env files in your test environment
	dir: './',
});

// Add any custom config to be passed to Jest
const customJestConfig = {
  setupFilesAfterEnv: ['<rootDir>/jest.setup.js'],
  // if using TypeScript with a baseUrl set to the root directory then you need the below for alias' to work
  moduleDirectories: ['node_modules', '<rootDir>/'],
  testEnvironment: "jest-environment-jsdom",
  // Automatically clear mock calls and instances between every test
  clearMocks: true,
  moduleNameMapper: {
    '\\.(css|less|scss|sss|styl)$': '<rootDir>/node_modules/jest-css-modules',
  },
  transform: {
    // Use babel-jest to transpile tests with the next/babel preset
    // https://jestjs.io/docs/configuration#transform-objectstring-pathtotransformer--pathtotransformer-object
    '^.+\\.(js|jsx|ts|tsx)$': ['babel-jest', { presets: ['next/babel'] }],
  },
};

// createJestConfig is exported this way to ensure that next/jest can load the Next.js config which is async
module.exports = createJestConfig(customJestConfig);