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Division of Taxation

Notice: Short Period Returns in the Context of Combined Reporting (N.J.A.C. 18:7-12.1 through N.J.A.C. 18:7-12.3)

In general, a combined group must file a return for each fiscal or calendar accounting period, or part thereof, during which it has or had a taxable status in New Jersey. In certain cases, a member or the entire combined group may be required to file a return covering an accounting period of less than 12 months.

Note: Banking corporations were required to file short period returns to harmonize their reporting period with that of the managerial member of the combined group (see TB-91 for more information).

A combined group is not required to file a short period return in circumstances when:

  • A member (other than the managerial member) changes from one combined group to another. In this instance, the member reports the income and activities for the months the member was part of each combined group on the respective returns;
  • A member (other than the managerial member) departs a combined group to file on a separate entity basis. Here, the member filing a separate return would not report the income on the separate return for the months the member was part of the combined group. The combined group includes the member’s income and activities for the months it was part of the group when it files its return;
  • A member (other than the managerial member) dissolves, withdraws, surrenders, or otherwise ceases to have a taxable status in New Jersey before the end of the group’s tax year. The member’s income and tax liabilities that accrued prior to dissolution/withdraw/etc. are reported on the combined return.

Note: The combined group does not need to file a short period combined return as long as the managerial member remains part of the combined group for the tax year, the accounting period of the managerial member remains the same, and the managerial member is not required to file a short period return for federal purposes.

Some of the circumstances that may require the filing of short period returns are:

  • A managerial member dissolves, merges, consolidates, withdraws, surrenders, or otherwise ceases to have a taxable status in New Jersey before the end of its tax year;
  • The first privilege period that a combined group gains taxable status in New Jersey;
  • The group’s managerial member changes its federal tax year;
  • A newly organized corporation that becomes the managerial member and whose first accounting period established for federal income tax purposes is less than 12 months; or
  • A managerial member joins or separates from a New Jersey combined group or changes from one combined group to another. The managerial member files short period return(s) reporting the group’s income and activities for the months that it was the managerial member of any New Jersey combined group(s).

Prorating Income of Short Period Returns. When determining the amount of income that is attributable to the portion of the 12-month period for the periods before and after departing a combined group, the taxpayer must prorate its income/losses and receipts (see N.J.A.C. 18:7-12.2).

Change in Managerial Member. If a corporation’s separation from or joining into a New Jersey combined group affects the group’s managerial member, the group must take steps to end the managerial member’s registration and elect a new member to fulfill the role. Information on that process is available on the webpage titled Managerial Member Registration/Change.


Last Updated: Monday, 05/17/21