Taxpayers filing a short-period return for accounting periods that begin on or after January 1, 2018, and end before July 31, 2018, would normally complete a 2017 Form CBT-100 to report the 2018 income. However, P.L. 2018, c. 48 and P.L. 2018, c. 131, significantly changed the New Jersey Corporation Business Tax Act and using the 2017 form will not account for any of those changes.
These changes include:
- The dividend exclusion percentage has been reduced and a tiered dividend exclusion has been added.
- There is surtax on the allocated taxable net income.
- The law permits the taxpayer to use the amount of its federal I.R.C. § 250(a) deduction against its Global Intangible Low Taxed Income (GILTI) and Foreign Derived Intangible Income (FDII) if the income was included in the taxpayer’s entire net income for New Jersey Corporation Business Tax purposes.
- The treaty exceptions for the related party addbacks of interest and intangible expenses were changed.
- A method for applying the I.R.C. § 163(j) limitation has been added.
- The New Jersey Research and Development Credit (R&D Credit) recoupled with the federal provisions in I.R.C. § 41.
- Taxpayers must addback all income that is exempt under any law of the United States to their entire net income.
- A required adjustment to the depreciable basis of assets for certain utility companies is required.
To account for these changes, a short period return, Form CBT-100-R, has been developed. Businesses should use the new form rather than the 2017 Form CBT-100. If a return has already been submitted, the business must amend their 2017 Form CBT-100 by filing Form CBT-100-R
. Forms are due on or before April 15, 2019. Penalties and interest will not be imposed on the underpayment of tax resulting from any retroactive changes.
: Form BFC-1 filers who need to amend a short-period return that covers accounting period that begins on or after January 1, 2018, and ends before July 31, 2018, must use a 2018 Form BFC-1 and write “AMENDED RETURN” clearly on the front page of the form.