Fourth Quarter 2002 Installment Payments
for Corporation Business Taxpayers
Take notice. Section 28 of the Business Tax Reform Act, P.L. 2002, c. 40, contains a special rule for the filing and payment of the 2002, 4th quarter installment payment for Corporation Business Tax taxpayers.
The tax due for this payment must be 25% of the taxpayer's actual tax liability for its 2002 year. If the payment is less than 25% of the actual tax liability for 2002, the taxpayer will have an underpayment for the period in the amount of the difference, and it will be subject to applicable interest and penalty provisions. The Act created this special 4th quarter installment payment to facilitate estimating revenue produced under the new law.
If a taxpayer's privilege period begins in 2002, the fourth quarter payment is due on or before the fifteenth day of the twelfth month of the period. That means for a taxpayer using the calendar year, the payment would be due December 15. However, since the 15th falls on a Sunday this year, the tax filing date is extended to the next business day, Monday, December 16 for calendar year taxpayers.
Taxpayers should remember that the 2002 tax year liability is calculated under the new rules contained in the Tax Reform Act, including new minimum taxes, the throwout rule, the alternate minimum assessment, and rules governing related party transactions, for example. To assist taxpayers in meeting their responsibilities, the web site of the Division of Taxation contains tax forms and instructions and Frequently Asked Questions about the Tax Reform Act.
Partnerships are not subject to making installment payments or estimated payments of tax. They will be required, however, to make a prepayment of the partnership per partner processing fee on the due date of the NJ 1065 return.