UPDATES

A recently enacted law eliminates the requirement for recognized federal S corporations to make a separate S corporation election with New Jersey. Federal S corporations will be automatically recognized as S corporations by New Jersey unless the corporation opts out. To opt out, 100% of the shareholders must consent. The entity may opt out at any time during the tax year or at any time on or before the due date or extended due date of the S corporation return.

The Division of Taxation has published a technical bulletin and FAQ document to assist companies with the resulting procedural changes.