New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 7 - CORPORATION BUSINESS TAX ACT
Subchapter 21 - COMBINED RETURNS
Section 18:7-21.12 - Tax credits earned by a member of a combined group

Universal Citation: NJ Admin Code 18:7-21.12

Current through Register Vol. 56, No. 18, September 16, 2024

(a) Tax credits earned by a member of a combined group shall be utilized as follows:

1. If a taxable member of a combined group earns a tax credit in a privilege period beginning on or after the first day of the initial privilege period for which a combined return is required, the taxable member may share the credit with other taxable members of the combined group. Any amount of credit that is utilized by another taxable member of the combined group shall reduce the amount of credit carryover that may be carried over by the taxable member that originally earned the credit. If a taxable member of a combined group has a tax credit carryover derived from a privilege period beginning on or after the first day of the initial privilege period for which a combined return is required, the taxable member may share the carryover credit with other taxable members of the combined group;

2. If a taxable member of a combined group has a tax credit carryover derived from a privilege period beginning prior to the first day of the initial privilege period for which a combined return is required, then the taxable member may share the carryover credit with other taxable members of the combined group;

3. If a taxable member of a combined group has a tax credit carryover derived from a privilege period during which the taxable member was not a member of such combined group, the credit carryover shall remain available to be utilized by such taxable member or other group members; and

4. To the extent a taxable member has more than one corporation business tax credit that it may utilize in a privilege period, whether such credits were earned by said member or are available to said member, the order of priority of the application of the credits shall be as prescribed by the Director.

(b) Tax credits purchased and transferred by a taxable member of a combined group from an unrelated third-party taxpayer may be shared by a taxable member of the combined group with its combined group members.

(c) Subsections (a) and (b) above will apply in the same manner to taxpayers that are included as members on the New Jersey elective combined returns.

(d) Taxable members are not required to share the tax credits. Refundable tax credits are refunded to the taxable member that earned the credit, unless otherwise agreed upon by the members of the combined group.

(e) When a taxable member leaves the combined group, the departing taxable member shall be allowed to take its unused-unshared-unexpired tax credit carryovers for which the departing taxable member is entitled.

(f) For the purposes of the tax credit authorized pursuant to N.J.S.A. 54:10A-5.46, the members of a combined group filing a New Jersey combined return shall be treated as one taxpayer.

(g) For the purposes of the tax credit authorized at N.J.S.A. 54:10A-5.43, only the shareable portion of the credit is shareable with the other members of the combined group.

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