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Governor Mikie Sherrill • Lt. Governor Dr. Dale G. Caldwell

Division of Taxation

Pass-Through Business Alternative Income Tax (PTE/BAIT)

For New Jersey tax purposes, income and losses of a pass-through entity are generally passed through to its members. Eligible S corporations, partnerships, and multi-member LLCs may elect to pay PTE/BAIT at the entity level on the sum of each member’s share of distributive proceeds.

Members can then claim a refundable tax credit on their New Jersey Gross Income Tax or Corporation Business Tax return for their share of tax paid by the entity.

To participate, an entity must register with the New Jersey Division of Revenue and Enterprise Services and file an annual election. All forms, returns, and payments must be submitted electronically.

Eligible Entities:

  • Partnerships
  • New Jersey S corporations
  • Multi-member LLCs with at least one member subject to NJ Gross Income Tax

Not Eligible:

  • Single-member LLCs
  • Sole proprietorships
Entity Type Election Eligibility Notes
S Corporation Yes Credit flows to shareholders based on distributive shares
Partnership Yes Applies to resident members on all income; nonresidents on NJ-source income
Multi-member LLC Conditional Eligible if at least one member is subject to NJ Gross Income Tax
Single-member LLC or sole proprietorship No Not eligible
Tax Rates
Taxable Income Tax Rate
$0-$250,000 5.675%
$250,001-$1,000,000 6.52%
Over $1,000,000 10.9%

Sourcing Rules:

  • Partnerships: Resident members taxed on all income; nonresidents taxed on New Jersey source income.
  • S Corporations: Shareholders taxed on New Jersey source income only.

Alignment With Entity Returns:

  • Distributive proceeds follow sourcing rules reported on the entity's New Jersey return:
    • Partnerships: Form NJ-1065
    • S Corporations: Form CBT-100S
  • Members may still need NJ-1040-ES estimated payments for income not covered by BAIT
  • BAIT estimated payments cannot be applied to personal tax accounts

Eligible pass-through entities must complete an annual PTE/BAIT election. All forms and payments are filed electronically via the PTE File and Pay System.

Election:

  • File each year by the original return due date (e.g., March 15)
  • Elections do not carry forward automatically

Estimated Payments:

  • Required if total BAIT liability exceeds $400
  • Payments made using Form PTE-150

Key Deadlines:

  • March 15: File PTE/BAIT election
  • April 15: 1st estimated payment
  • June 15: 2nd estimated payment
  • September 15: 3rd estimated payment
  • January 15 (following year): 4th estimated payment
  • March 15 (following year): File PTE-100 return

Note: BAIT estimated payments are separate from NJ-1040-ES payments.

Filing the Return:

  • File Form PTE-100 by the original due date
  • Pay any balance electronically
  • Request a 6-month extension using Form PTE-200-T (extension does not extend the time to pay)

Composite and Nonresident Members:

  • Filing BAIT does not prevent a composite return (Form NJ-1080-C)
  • Credits may flow to composite participants; composite payments cannot be applied to BAIT accounts
  • Each member receives a share of BAIT paid by the entity
  • Credits are refundable and may be applied to:
    • Individual NJ-1040
    • Corporation Business Tax (CBT)
  • Overpayments may be carried forward or refunded if no election is filed for the following year

File and Pay

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Last Updated: Wednesday, 01/28/26