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Storm Recovery Information

Division of Taxation

Teleworking – End of COVID-19 Temporary Suspension Period for Nexus and Withholding Purposes.

Corporation Business Tax (CBT) Nexus

As a result of the COVID-19 pandemic, some employees were required to work from their New Jersey home. The Division temporarily waived the Corporation Business Tax nexus standard which is generally met if an out-of-State corporation has an employee working in this State. Thus, as long as the out-of-State corporation did not otherwise meet any of the factors giving rise to nexus other than employees working from home in New Jersey solely due to the pandemic, the Division did not consider the out-of-State corporation to have nexus for Corporation Business Tax purposes during this waiver time period.

This waiver of Corporation Business Tax nexus for employees working in this State as a result of the pandemic no longer applies on and after October 1, 2021. On and after October 1, 2021, the pre-pandemic Corporation Business Tax nexus standard applies whereby an employee working from home will create Corporation Business Tax nexus for an employer because working at a location in New Jersey is considered physical presence in this State.

See TB-79R


Sales Tax Nexus

As a result of the COVID-19 pandemic, some employees were required to work from their New Jersey home. The Division temporarily waived the Sales Tax nexus standard which is generally met if an out-of-State seller has an employee working in this State. Thus, as long as the out-of-State seller did not maintain any physical presence other than employees working from home in New Jersey solely due to the pandemic and was below the economic activity thresholds enacted by P.L. 2018, c. 132, the Division did not consider the out-of-State seller to have nexus for Sales Tax purposes during this waiver time period.

This waiver of Sales Tax nexus for employees working in this State as a result of the pandemic no longer applies on and after October 1, 2021. On and after October 1, 2021, the pre-pandemic Sales Tax nexus standard applies whereby an employee working from home will create Sales Tax Nexus for an employer because working at a location in New Jersey is considered physical presence in this State.

See TB-78R


End of Temporary Suspension of Employer Withholding Rules for Teleworking Employees

The temporary relief period with regard to employer withholding tax for teleworking employees will end on October 1, 2021.  As of that date, employers should cease sourcing income in accordance with the employer’s jurisdiction.  As required under the long-standing pre-pandemic rules, beginning on and after October 1, 2021, employers should resume sourcing income based on where the service or employment is performed and withhold New Jersey Gross Income Tax from such wages.

For information on proper wage withholding, see the New Jersey Income Tax Withholding Instructions (NJ-WT) .


Last Updated: Tuesday, 08/03/21