Income/Franchise:
New Jersey Division of Taxation Says Some S Corps Must Submit Proof of Federal S Corp Status with CBT Return
Answers to Frequently Asked Questions P.L. 2022, c. 133, New Jersey S Corporation Procedural Changes (A supplemental FAQ to support TB-105 (R)), N.J. Div. of Tax. (rev. 3/7/24). The New Jersey Division of Taxation posted updated guidance on state law that generally eliminates the requirement to affirmatively elect New Jersey S corporation status for privilege periods beginning on or after December 22, 2022 [see A.B. 4295 (2022) and State Tax Matters, Issue 2023-1, for more details on this state law]. According to the updated guidance, a corporation that historically filed as a C corporation for New Jersey purposes, and which recently acquired S corporation status for federal tax purposes, must submit its “Shareholder Jurisdictional Consent” (Schedule SJC) and proof of federal S corporation status (i.e., a copy of the federal acceptance letter) as part of its New Jersey CBT-100S, assuming the federal acceptance letter is dated on or after December 22, 2022. If such business wants to submit the information in advance of filing its tax return (i.e., in order to make a pass-through business alternative income tax (PTE/BAIT) election), it may use the New Jersey Division of Revenue and Enterprise Services S Corporation Election website to do so. Please contact us with any questions.
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