Under what circumstances will NJ State grant "Retro-Active New Jersey S Corporation Election?"
According to New Jersey, "in order to provide uniform relief for corporations who have inadvertently failed to make a timely valid New Jersey S Corporation election, the Division of Taxation has adopted a retro-active S Corporation election procedure.
Regulation 18:7-20.3, which was recently promulgated details the procedure that can enable a corporation and its shareholder(s) to cure a defective New Jersey S Corporation election.
Taxpayers requesting a retroactive election will need to file form CBT-2553-R and remit the required fee. Taxpayers should take care to ensure that they qualify for the new procedure, since the required fee is not refundable if the retro-active election is denied.
A retro-active election will only be granted providing all of the following criteria are satisfied:
1) A completed form CBT-2553-R is submitted containing the signature of all shareholders along with a non-refundable administrative fee equal to $100.00 for each year being impacted by the back dating.
2) The Corporation is authorized to do business in New Jersey and registered with the Division of Taxation.
3) All appropriate Corporation Business Tax returns have been timely filed and taxes timely paid as if the New Jersey S Corporation election request had been previously approved.
4) The New Jersey S Corporation retro-active request is received prior to a final assessment for a year covered by the requested becoming final.
5) The Division has not issued a notice denying a previous late filed New Jersey S election request, and the taxpayer has not protested the denial within ninety (90) days.
6) All shareholders have filed appropriate tax returns and paid the tax in full when due as if the New Jersey S Corporation election request had been previously approved, and the taxpayers have reported the appropriate S Corporation income on those returns."