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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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