Current through Register Vol. 56, No. 18, September 16, 2024
(a) A general
partnership, a limited partnership, a limited liability partnership (LLP), a limited
liability company (LLC), a New Jersey electing S corporation, an estate, a trust, or
a professional athletic team (as defined in
18:35-5.1) doing business or
conducting activities in New Jersey, or having income derived from or connected with
sources within New Jersey may file a composite New Jersey Nonresident Gross Income
Tax Return (Form NJ-1080-C) on behalf of its qualified nonresident individual
partners, members, shareholders, or beneficiaries, as the case may be, who elect to
file such return.
1. Any entity which files a
composite return on behalf of its qualified nonresident individual members shall be
referred to as the filing entity.
(b) A "qualified nonresident individual" is one
who elects to participate in the composite return and satisfies all of the following
conditions:
1. The individual was a nonresident
for the entire taxable year;
2. The
individual did not maintain a permanent place of abode in New Jersey at any time
during the taxable year;
3. The
individual was not a fiscal year filer;
4. The individual did not have income derived from
or connected with New Jersey sources other than the income reported on this or any
other composite return;
5. The
individual waives the right to claim any New Jersey personal exemption, credit, or
deduction and agrees to have the tax calculated directly on such income at the
highest tax rate in effect for single taxpayers for the tax year; and
6. The individual elects to be included in a
composite return by completing and delivering to the filing entity a Form NJ-1080-E
(Election to Participate in a Composite Return), or a form substantially similar
thereto, prior to the filing of the composite return by the filing entity, in
accordance with the following:
i. Such election
shall be made annually;
ii. Such
election shall be binding on the participant's heirs, representatives, assigns,
successors, executors, and administrators;
iii. Such election shall be an express consent to
personal jurisdiction in New Jersey for New Jersey personal income tax purposes;
and
iv. A qualified electing nonresident
participant shall not revoke an election to be included in the composite return or
make an election to be included in the composite return after April 15 following the
close of the taxable year for which the election was made.
(c) Each filing entity shall retain the
completed and signed election forms (Form NJ-1080-E) submitted by the qualified
electing nonresident participants. Such forms shall be made available to the
Division of Taxation upon request.
(d)
An individual may participate in more than one New Jersey gross income tax composite
return, providing the requirements of (b)1 through 6 above are satisfied.
(e) Nonresident individuals who are not eligible
to participate in the composite return because they do not satisfy all of the
requirements of (b) above, or who do not wish to participate in the composite
return, shall file a Form NJ-1040NR reflecting their income from all sources, as
well as from New Jersey sources.
(f) The
composite return shall be due on the 15th day of the fourth month following the
close of the taxable year of the qualified electing nonresident participants. An
extension of time to file will be granted on a composite basis only and shall be
requested in accordance with
18:35-6.1. The request shall be made on
Form NJ-630 and shall be made under the filing entity's Federal identification
number.
(g) If the filing entity
previously filed a composite return and the amount which the filing entity estimates
to be the total income tax liability for the composite return for the current tax
year exceeds $ 100.00, the filing entity shall file a declaration of estimated tax
and shall make quarterly estimated tax payments in accordance with
54A:8-4 and
54A:8-5, using Form NJ-1040-ES. Credit
shall not be given on the composite return for individual estimated tax payments
made by, or on behalf of, any of the qualified electing nonresident
participants.
(h) The tax due shall be
calculated using the highest gross income tax rate in effect for single taxpayers
for the tax year for which the composite return is being filed, without benefit of
personal exemptions, deductions, or credits.
(i) A composite return shall be considered to be a
group of separate returns that meet the individual filing requirements for each
qualified electing nonresident participant as imposed by the Gross Income Tax Act.
54A:1-1 et seq.
1. Each qualified electing nonresident participant
shall be personally liable for the timely filing of returns and payment of such
individual's liability, including, but not limited to, any assessment resulting from
an audit of the composite return.
2.
Each qualified electing nonresident participant adopts the statements contained in
the filed composite return relating to the filing entity and to him or herself (but
not as to statements made on the composite return relating solely to other
participants), and shall take, under penalty of perjury, full responsibility for the
truth of the statements contained in the filed composite return.
3. Each qualified electing nonresident participant
adopts, as his or her own, any actions of the filing entity that may affect the
composite return, including, but not limited to, a waiver of the statute of
limitations for assessment or any decision to accept the results of an audit by the
Division.
4. The Director retains the
right to require the filing of an individual New Jersey Nonresident Gross Income Tax
Return (Form NJ-1040NR) by any individual who participates in a composite return,
when the Director deems that the filing of a separate return is necessary to acquire
complete facts and information, or to enforce the provisions of the Gross Income Tax
Act.
(j) Each composite
return shall include the following for each qualified electing nonresident
participant:
1. The participant's name and
address;
2. The participant's social
security number;
3. The participant's
share of income derived from or connected with New Jersey sources;
4. The New Jersey gross income tax attributable to
the participant's share of income derived from or connected with New Jersey source;
and
5. A copy of the following:
i. Schedule NJK-1, Form NJ-1065, if the filing
entity is a partnership, limited liability company, or limited liability
partnership;
ii. Schedule NJ-K-1, Form
CBT-100S, if the filing entity is a New Jersey electing S corporation;
iii. Schedule K-1, Federal Form 1041, if the
filing entity is a trust or estate; or
iv. Form W-2, if the filing entity is a
professional athletic team.
(k) Each return shall include the names,
addresses, and social security numbers of all members of the filing entity who are
not included in the composite return.
(l) Any composite return which is filed on behalf
of 25 or more participants shall be filed on compact disc or by using an electronic
format.
(m) The New Jersey Nonresident
Composite Return (Form NJ-1080-C) shall be signed by:
1. The tax matters partner, if the filing entity
is a general partnership, a limited partnership, or a limited liability
partnership;
2. An officer of the
corporation, if the filing entity is an S corporation;
3. The executor or administrator, if the filing
entity is an estate;
4. A trustee, if
the filing entity is a trust;
5. An
authorized member, if the filing entity is a limited liability company; or
6. If the filing entity is a professional athletic
team, the return shall be signed as required in (m)1 through 5 above, depending on
the entity type of the team.
(n) If, after the final composite return has been
filed, a qualified, electing, nonresident participant discovers income derived from
or connected with New Jersey sources other than from the filing entity, such
participant shall file a Nonresident New Jersey Gross Income Tax Return (Form
NJ-1040NR), which includes all income derived from New Jersey sources (including the
share of income reported on the composite return).
1. The participant's Form NJ-1040NR shall include
a schedule indicating the name of the filing entity(s) for which the participant was
included in a composite return, the amount of income included on the participant's
behalf for each composite return, and the tax paid thereon.
2. Such participant shall be entitled to a credit
on the Form NJ-1040NR for the gross income tax paid on behalf of such participant on
the composite return (Form NJ-1080-C).
