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...)