2023 New Jersey Revised Statutes
Title 54A - New Jersey Gross Income Tax Act
Section 54A:12-5 - Refundable gross income tax credit.
54A:12-5 Refundable gross income tax credit.
5. a. Each member of a pass-through entity that elects to be liable for, and pay, the pass-through business alternative income tax pursuant to section 3 of P.L.2019, c.320 (C.54A:12-3) for the taxable year shall be allowed a tax credit in the amount equal to the member's direct share of the tax paid pursuant to section 3 of P.L.2019, c.320 (C.54A:12-3).
The credit allowed to each member of the pass-through entity shall be applied for the taxable year as follows:
(1) a member who is a natural person shall be allowed a refundable credit against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.;
(2) a member that is an estate or trust shall be allowed a refundable credit against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., which credit may be allocated to beneficiaries or may be used against the tax liability of the estate or trust;
(3) a member that is a corporation, other than an S corporation, shall be allowed a refundable credit against (a) the surtax imposed under section 1 of P.L.2018, c.48 (C.54:10A-5.41) or (b) the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5);
(4) a member that is an S Corporation shall be allowed (a) a refundable credit against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., which credit shall be allocated among the shareholders of the corporation or (b) a refundable credit against the tax liability of the corporation, which credit may be applied against: (i) the surtax imposed under section 1 of P.L.2018, c.48 (C.54:10A-5.41); (ii) the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5); (iii) the tax imposed under subsection d. of section 4 of P.L.1993, c.173 (C.54:10A-5.23); or (iv) the tax imposed under section 3 of P.L.2019, c.320 (C.54A:12-3); and
(5) a member that is an entity classified as a partnership for federal tax purposes shall be allowed (a) a refundable credit against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., which credit shall be allocated among the partners of the partnership, or (b) a refundable credit against the tax liability of the partnership, which credit may be applied against: (i) the tax imposed pursuant to section 12 of P.L.2002, c.40 (C.54:10A-15.11); (ii) the fee imposed pursuant to N.J.S.54A:8-6; or (iii) the tax imposed pursuant to section 3 of P.L.2019, c.320 (C.54A:12-3).
b. The credit allowed by this section shall be available after the application of all other credits allowed by law and claimed by the member, or as applicable, the beneficiary of a member estate or trust, the shareholder of a member corporation, or the partner of a member partnership, in the taxable year.
c. For a member, if the credit exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7 or R.S.54:49-15, as appropriate; provided however, that subsection (f) of N.J.S.54A:9-7 and section 7 of P.L.1992, c.175 (C.54:49-15.1) shall not apply.
d. (Deleted by amendment, P.L.2021, c.419)
e. The director shall adopt regulations to allow the amount of the credit that shall be determined to be an overpayment for the purposes of N.J.S.54A:9-7 or R.S.54:49-15, as appropriate, to be applied against the estimated tax for a successive year.
L.2019, c.320, s.5; amended 2021, c.419, s.3.
