Partnership Filing Requirements
- Partnership Registration
- If you are planning to start a business in New Jersey, you must register the business with the Division of Revenue’s Client Registration Branch at least 15 business days prior to opening. This will enable the State to send you all of the forms and information necessary for you to comply with New Jersey tax laws.
- If your business is a legal entity limited partnership or limited liability company you must file formation or authorization documents for the public record. General partnerships are not subject to Public Record filing.
- Additional information concerning registering your partnership is listed on the New Jersey Division of Revenue's Formation and Registration Page.
- Partnership Filing Fee:
- For New Jersey Gross Income Tax purposes, every partnership or limited liability company (LLC) that has income from sources in the State of New Jersey, or has a New Jersey resident partner, must file the New Jersey Partnership return, Form NJ-1065.
- The $150/partner fee is not to exceed $250,000 for each partnership with more than 2 partners:
on partnerships with more than two partners AND having income or loss
derived from New Jersey sources;
each partner receiving a K-1 or having an ownership interest at any point during the year;
partner is an individual, estate, trust or other entity;
having both general and limited partnership interest shall be counted
twice when determining the total partnership fee owed;
is due on or before the 15th day of the 4th month following the end of
the partnership's tax year;
partnerships - each partnership pays the filing fees required for its
fee payment remitted with Form PART-100, Partnership Voucher;
available - Payment is remitted with Form PART-200-T, due on the original
due date of the return;
- If Form PART-200-T is filed to request an extension, Form PART-100 must be filed by the extended due date;
partnership required to remit the partnership fee must, at that time,
make an installment payment of 50% of the current year's filing fee (unless
it is the partnership's final return), which is creditable against the
following year's fee payment;
is available where nonresident partners have no physical nexus with New
Jersey and the partnership has an office outside the State - see N.J.A.C.
- Schedule J must be completed to claim an apportioned filing fee;
- Partnership Forms, including Form NJ-1065 and PART-100, are available online.
- All partnership filers are required to remit tax except:
- Partnerships listed on a United States National Stock Exchange
- Qualified Investment Partnerships:
- More than 10 members or partners; and
- No member or partner holding more than a 50% interest; and
- At least 90% of income derived from investment income; and
- A "dealer in securities" (as defined by Sec 1236 IRC) cannot be included.
- Tax calculation/rates :
on all New Jersey allocated income of nonresident non-corporate partners (individual,
estates and trusts) and nonresident corporate partners (including partnerships
that are partners);
rules pursuant to the Corporation Business Tax apply N.J.S.A. 54: 10A-6 (i.e.
double weight the receipts fraction);
determines the tax for the nonresident non-corporate partners in accordance
with the highest rate for New Jersey Gross Income Tax purposes (6.37% rate),
unless hedge fund status is met (see #6 below);
determines the tax for the nonresident corporate partners at the 9% corporate
rate, unless they maintain a regular place of business in New Jersey or they
are an exempt corporation pursuant to N.J.S.A. 54:10A-3;
is due on or before the 15th day of the 4th month subsequent to the close
of the tax year;
must be remitted along with PART-100 or PART-200-T (for extensions) Vouchers.
- Do not include the payment or the PART-100 with the NJ-1065. Each form must be submitted separately.
Fee Waived For Investment Clubs Below $60,000
clubs are usually small groups of individuals who pool their money to invest
in stock or other securities for enjoyment, learning or investment growth.
The club often operates informally with members pledging to pay a regular
amount into the club monthly. Some clubs have a committee that gathers information
on securities, selects the most promising securities, and recommends that
the club invest in them. Most clubs require all members to vote for or against
all investments, sales trades, and the other transactions. As per N.J.S.A. 54A:8-6 (2)(A) all of the members of an investment club must be individuals.
will waive the $150 tax form processing fee for investment clubs with fewer
than $60,000 in shared capital assets.
$60,000 in shared assets is based on an average quarterly cost or market value.
- Legislation (P.L. 2003, c. 256) passed on January 14, 2004, raised the $150 filing fee exemption to $35,000 in assets per partner to a maximum of $250,000 in assets. Investment clubs that fall under this new limit are still subject to filing an NJ-1065 return. The market value of the total assets of $250,000 or $35,000 per partner was raised for the 2005 tax year due to inflation to $265,200 or $37,200 per partner for investment club partnerships. In sum, investment club partnerships with less than $60,000 in assets are not subject to filing an NJ-1065 return. Investment club partnerships with more than $60,000 in assets but less than $265,200 in assets (or $37,200 per partner, whichever is lower) are not subject to the filing fee but must still file an NJ-1065 return. Investment clubs with more than $265,200 in assets (or $37,200 per partner, whichever is lower) during tax year 2005 are subject to the $150 filing fee and they must file a NJ-1065 return.
- In addition to stating that the partnership is an investment club in the Principal Business Activity Box of Form NJ-1065, the box indicating that it is an investment club must also be marked.
Tax PaymentPartnerships must remit payments of tax on nonresident partner's share of New Jersey income. For tax years beginning on or after January 1, 2002 (NOTE: different rules apply for tax payments for years beginning on and after January 1, 2001 and before January 1, 2002):
calendar year businesses - the due date is April 15, 2003 (the due date for
the partnership return);
is credited to the nonresident partner's 2002 income tax liability as of the
date the Division receives the tax from the partnership entity;
made by partnership on behalf of the nonresident partner does NOT relieve
the nonresident partner of their requirement for making estimated or installment
tax paid by the partnership can be claimed by the nonresident partner on the
New Jersey tax return by attaching a copy of the NJ-K1;
New Jersey source amount in the distributive share of partnership income/loss
in Column F of the Partners Directory may differ from the nonresident partner's
share of New Jersey income in Column I;
filers - will receive credit when the tax payment is received;
partnership - payment is required for a partnership holding a partnership
- Partnerships that meet Hedge Fund Status:
- Partnerships meeting "hedge fund" status under N.J.S.A. 54A:5-8(c) are not required
to remit tax payments on behalf of nonresident non-corporate partners;
qualifies as a hedge fund? - see the instructions to the NJ-1065;
entity, not the partner, must make the determination of hedge fund status.
- Partnership Dissolution
- A partnership that indicates it is filing a "Final Return" (Form
NJ-1065) is not required to make the 50% installment payment (prepayment)
of the partnership filing fee for the next year;
is required to pay the $150/partner filing fee for the year of the final return-the
fee may NOT be prorated if the period is shorter than a year.
- Electronic Filing
filers that have ten or more partners are required to file by electronic means;
or more partners may consist of both residents and nonresidents;
- Paid tax preparers who prepare Form NJ-1065 returns for partnerships that are subject to the provisions of the Corporation Business Tax are required to file all partnership returns and payments by electronic means.
- To obtain information on making payments by Electronic Funds Transfer (debit or credit) contact the Alternate Filing Branch at 609-292-9292.
- To obtain additional information on electronic filing and other payment options, contact the Division of Taxation’s Customer Service Center at 609-292-6400.
- NJ-1065 filers that have less than ten partners have the option to file and make payment by electronic means or on paper.
- For more Information