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Old 07-24-2017, 02:20 PM
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Should I elect New Jersey S-corporation status for a New Jersey LLC for which Federal S-corporation status has been elected ?

I have elected Federal S-corporation status for a NJ LLC (IRS form 2553). However, NJ does not automatically recognize the Federal S-corporation election. Should I also elect S-corporation status in NJ (NJ form CBT-2553)?

Unlike Federal S-corp status, it seems NJ S-corp status confers no benefit over LLC status. However, I am concerned that if I do not elect S-corp status in NJ then NJ will tax the LLC as a C-corp because of the federal S-corp election (at least, that seems to be the worst-case scenario, although it would be perverse since NJ doesn't recognize the Federal S-corp election. That said, perversion and tax code often go hand-in-hand...)



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Old 07-25-2017, 06:01 AM
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Corps/LLCs may elect to register in NJ as a Sub-Chapter S corp. Since the S corp status for federal purposes does not automatically flow through for NJ state purposes, you must apply for S corp status in NJ and receive approval of the election. Without this filing and approval, your filings in NJ will be considered as those of a LLC with all the rates that apply to that designation. I guess the best way is to contact the dept of treasury of NJ for more accurate info ;



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