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S CORPORATION STATUS

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.

Last Updated: Wednesday, 07/30/14


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