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Corporations may elect to
register in New Jersey as a Sub-Chapter S corporation. Since the S
corporation status for federal purposes does not automatically flow
through for New Jersey state purposes, you must apply for S corporation
status in this state and receive approval of the election. Without
this filing and approval, your filings in New Jersey will be considered
as those of a standard C corporation with all the rates that apply
to that designation.
The steps
to apply for S Corp status in New Jersey are as follows:
- Apply
for S corporation status with the
Internal Revenue Service
- Be
fully registered with the NJ Division of Revenue and have a
Certificate of Incorporation or a Certificate of Authority to do
business in this State.
- File
a New Jersey S Corporation Election Form
CBT-2553. Out-of-state corporations who have not received authorization
to do business in New Jersey must also attach the S Corporation
Certification with their filing.
For the election to be
in effect for the current tax year, the New Jersey S Corporation Election
must be filed within 3 ½ months from the beginning of the fiscal year.
For example, filing of the election for a fiscal period beginning
July 1 must be done by October 15. The postmark date is used as the
filing date. To ensure proper proof of filing, we suggest that the
S Corporation election documents be sent by registered mail or courier
service.
Every
shareholder of the corporation must consent to this election. Out-of-state
corporations must be authorized to do business in New Jersey. Within
30 days after filing, the Division of Revenue will notify you whether
or not your election is accepted.
Once an election is made
and accepted, a corporation may remain a New Jersey S corporation
as long as it is a Federal S corporation. To revoke an election, a
letter of revocation must be filed with the NJ Division of Revenue,
Client Registration-S Corp, PO Box 252, Trenton, NJ 08646-0252. The
letter must be signed by all shareholders holding more than 50% of
the outstanding shares of stock on the day of the revocation and filed
with a copy of the original election form. The filing deadline for
a letter of revocation is on or before the last day of the first tax
year of the election.
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