Registering a Business in New Jersey
Depending on the type of business you operate, you may be required to register with several state agencies in the State of New Jersey. The New Jersey Department of the Treasury has a guide for registering your business found here.
S-Corporation Income Tax
New Jersey S corporations are subject to the “Corporation Business Tax”. The CBT applies to New Jersey S corporations that are subject to federal taxation (due, for example, to built-in gains, excess passive income, or passive investment income). In such cases, as long as the S corporation files the proper New Jersey S corporation election form (CBT 2553), the CBT is based on the S corporation’s New Jersey gross receipts, as follows:
gross receipts less than $100,000 = $375 tax
gross receipts at least $100,000 but less than $250,000 = $562 tax
gross receipts at least $250,000 but less than $500,000 = $750 tax
gross receipts at least $500,000 but less than $1,000,000 = $1,125 tax; and
gross receipts more than $1,000,000 = $1,500 tax.
S corporation shareholders will owe state tax on their share of the business’ net income on their personal New Jersey income tax return.
LLC/Partnership Income Tax
LLCs and partnerships are not required to pay income tax to New Jersey. Instead, income from the business is distributed to individual LLC members or partners, who then pay New Jersey income tax on that amount with their personal return.
Qualified nonresident individuals who are members of s corporations or partnerships in New Jersey may participate in a composite return. Composite returns are filed on Form NJ1080-C.
Individual Income Tax
Individual income tax varies by taxable income and filing status. Tax rate schedules are as follows.
Individual income tax is reported on Form NJ-1040.
S corporation, partnership, and individual income tax returns are due on the 15th day of the fourth month following the end of the tax year. For calendar year taxpayers, the due date is April 15th.
S corporations are required to make estimated payments based upon the amount that was due in the prior year. More information can be found in the CBT-100S instruction booklet.
Individuals who estimate that their tax due will be more than $400, are required to make estimated tax payments.
Filing an Extension
S corporations must file Form CBT-200-T in a timely manner to be granted an extension. Filing Form CBT-200-T will allow for a 6 month extension to file Form CBT-100S.
Partnerships that are granted a federal extension to file will receive an automatic 5 month extension on their New Jersey NJ-1065. Partnerships will need to include a copy of the federal extension when they file. In addition, New Jersey allows partnerships to use Form Part-200-T to request an extension.
Individuals can receive a 6 month extension by paying at least 80% of their tax liability by the due date and including one of the following upon filing their return:
- A copy of their federal extension; or
- Filing Form NJ-630 by the original due date of the return.
S corporation, partnership and individual income tax returns filed late will be subject to a 5% per month penalty, up to a maximum of 25% of the balance due.
If your business was formed or is located in another state, but generates income in New Jersey, it may be subject to New Jersey taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
New Jersey Department of the Treasury: