![]() Expiration of COVID-related extension effective as of December 22, 2022. ![]() Effective: New requirements for partnerships are effective immediately and apply to any adjustments on or after January 1, 2020.The entity may opt out at any time during the tax year or at any time on or before the due date or extended due date of the S corporation return.Īny S corporation doing business, having or exercising its franchise, deriving receipts, engaging in contracts, or employing or owning capital or property, or registered to do business in New Jersey that does not elect to opt out will be taxed as a New Jersey S corporation. To opt out, 100 percent of the shareholders must consent. Federal S corporations will be automatically recognized as an S corporation by New Jersey unless the corporation opts out. The law eliminates the requirement for recognized federal S corporations to make a separate S corporation election with New Jersey. The law ends COVID-19 related extensions for the Division to pay interest on refunds, and the statute of limitations to assess taxes.Įlimination of the New Jersey S Corporation Elections The Division will use available resources to access unreported IRS audit adjustments, and the taxpayer must claim all State refunds, credits, or extensions as a result of the IRS audit within one year of the date of the adjustment report. Partnership members are still subject to additional taxes and interest due if the partnership fails to report the IRS audit adjustments. During a pending IRS audit report, all required estimated tax payments must be reported to the Division prior to the due date of the Federal Adjustments Report. The partnership can elect to pay the Gross Income Tax on behalf of the individual partners or members. ![]() Individual partners or members will be taxed on their portion of partnership income or gain. Partnerships will not be collectively subject to the tax imposed by the Gross Income Tax Act based on the federal audit adjustments. This law requires partnerships to report any IRS audit adjustments to the Division of Taxation. ![]()
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