Title 54A — New Jersey Gross Income Tax Act

Chapter 1

§ 54A:1-1 Short title

This title shall be known and may be cited as the "New Jersey Gross Income Tax Act."

§ 54A:1-2 Definitions.

As used in this act, unless the context clearly indicates otherwise, the following words and phrases shall have the following meaning:

a. "Director" means the Director of the Division of Taxation in the Department of the Treasury.

b. "Fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.

c. "Excludable income" shall be limited to those payments set forth in chapter 6 hereunder.

d. "Gross income" shall include that set forth in chapter 5 hereunder.

e. "Dependent" means a spouse or child, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), or any individual related to the taxpayer and who is a dependent pursuant to the provisions of the Internal Revenue Code during a taxable year.

f. "Disabled" means total and permanent inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, including blindness. For purposes of this subsection, "blindness" means central visual acuity of 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be considered as having a central visual acuity of 20/200 or less.

g. "Medical expenses" means nonreimbursed payments for physicians, dental and other medical fees, hospital care, nursing care, medicines and drugs, prosthetic devices, X-rays and other diagnostic services conducted by or directed by a physician or dentist. In addition, medical expenses may also include amounts paid for transportation primarily for and essential to medical care and insurance (including amounts paid as premiums under part B of Title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care.

h. Partnership and partner. The term "partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this act, a trust or estate or a corporation; and the term "partner" includes a member in such a syndicate, group, pool, joint venture, or organization.

i. Blank.

j. Blank.

k. "Taxable year" means the calendar or fiscal accounting period for which a tax is payable under this act.

l. "Taxpayer" means any individual, estate or trust required to report or to pay taxes, interest and penalties under this act, or whose income in whole or in part is subject to the tax imposed by this act.

m. "Resident taxpayer" means an individual:

1. Who is domiciled in this State, unless he maintains no permanent place of abode in this State, maintains a permanent place of abode elsewhere, and spends in the aggregate no more than 30 days of the taxable year in this State; or

2. Who is not domiciled in this State but maintains a permanent place of abode in this State and spends in the aggregate more than 183 days of the taxable year in this State, unless such individual is in the Armed Forces of the United States.

n. "Nonresident taxpayer" means a taxpayer who is not a resident.

o. Resident estate or trust. A resident estate or trust means:

(1) The estate of a decedent who at his death was domiciled in this State,

(2) A trust, or a portion of a trust, consisting of property transferred by will of a decedent who at his death was domiciled in this State, or

(3) A trust, or portion of a trust, consisting of the property of:

(a) A person domiciled in this State at the time such property was transferred to the trust, if such trust or portion of a trust was then irrevocable, or if it was then revocable and has not subsequently become irrevocable; or

(b) A person domiciled in this State at the time such trust, or portion of a trust, became irrevocable, if it was revocable when such property was transferred to the trust but has subsequently become irrevocable.

For the purposes of the foregoing, a trust or portion of a trust is revocable if it is subject to a power, exercisable immediately or at any future time, to revest title in the person whose property constitutes such trust or portion of a trust, and a trust or portion of a trust becomes irrevocable when the possibility that such power may be exercised has been terminated.

p. Nonresident estate or trust. A nonresident estate or trust means an estate or trust which is not a resident.

q. Unless the context in which it occurs requires otherwise, the term "act" or "this act" shall mean the New Jersey Gross Income Tax Act, Title 54A of the New Jersey Statutes.

§ 54A:1-2.1 Charitable contributions not a factor in determination of domicile.

1. For purposes of determining whether a person is domiciled in this State or not domiciled in this State under subsections m., n. o. and p. of N.J.S.54A:1-2, the making of a financial contribution, gift, bequest, donation or any other financial instrument or pledge in any amount or the donation or loan of any object of any value qualifying for deduction as a charitable contribution under subsection (a) of section 170 of the federal Internal Revenue Code of 1986 (26 U.S.C.s.170(a)), or the volunteering, giving or donation of uncompensated time, or any combination of the foregoing, to any corporation, foundation, organization or institution, which is exempt from federal income tax under paragraph (3) of subsection (c) of section 501 of the federal Internal Revenue Code of 1986 (26 U.S.C.s.501(c)(3), shall not be considered as a factor in any manner to determine a person's state of domicile.

Chapter 2

§ 54A:2-1 Imposition of tax.

There is hereby imposed a tax for each taxable year (which shall be the same as the taxable year for federal income tax purposes) on the New Jersey gross income as herein defined of every individual, estate or trust (other than a charitable trust or a trust forming part of a pension or profit-sharing plan), subject to the deductions, limitations and modifications hereinafter provided, determined in accordance with the following tables with respect to taxpayers' taxable income:

a. For married individuals filing a joint return and individuals filing as head of household or as surviving spouse for federal income tax purposes:

(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:

If the taxable income is: The tax is:

Not over $20,000.00.......... 2% of taxable income

Over $20,000.00 but not

over $50,000.00........ $400.00 plus 2.5% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00........ $1,150.00 plus 3.5% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00........ $1,850.00 plus 5.0% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00...... $2,350.00 plus 6.5% of the

excess over $80,000.00

Over $150,000.00 ............ $6,900.00 plus 7.0% of the excess over $150,000.00

(2) For taxable years beginning on or after January 1, 1994 but before January 1, 1995:

If the taxable income is: The tax is:

Not over $20,000.00...... 1.900% of taxable income

Over $20,000.00 but not

over $50,000.00....... $380.00 plus 2.375% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00...... $1,092.50 plus 3.325% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00....... $1,757.50 plus 4.750% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00....... $2,232.50 plus 6.175% of the

excess over $80,000.00

Over $150,000.00 .......... $6,555.00 plus 6.650% of the

excess over $150,000.00

(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.700% of taxable income

Over $20,000.00 but not

over $50,000.00........ $340.00 plus 2.125% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00........ $977.50 plus 2.975% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00........ $1,572.50 plus 4.250% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00...... $1,997.50 plus 6.013% of the

excess over $80,000.00

Over $150,000.00 ............ $6,206.60 plus 6.580% of the

excess over $150,000.00

(4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:

If the taxable income is: The tax is:

Not over $20,000.00............ 1.400% of taxable income

Over $20,000.00 but not

over $50,000.00......... $280.00 plus 1.750% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00........ $805.00 plus 2.450% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00........ $1,295.50 plus 3.500% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00...... $1,645.00 plus 5.525% of the

excess over $80,000.00

Over $150,000.00 ............... $5,512.50 plus 6.370% of the

excess over $150,000.00

(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2018:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.400% of taxable income

Over $20,000.00 but not

over $50,000.00........ $280.00 plus 1.750% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00........ $805.00 plus 2.450% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00....... $1,295.50 plus 3.500% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00...... $1,645.00 plus 5.525% of the

excess over $80,000.00

Over $150,000.00 but not

over $500,000.00...... $5,512.50 plus 6.370% of the

excess over $150,000.00

Over $500,000.00 ............ $27,807.50 plus 8.970% of the

excess over $500,000.00

(6) for taxable years beginning on or after January 1, 2018, but before January 1, 2020:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.400% of taxable income

Over $20,000.00 but not

over $50,000.00...... $280.00 plus 1.750% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00....... $805.00 plus 2.450% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00....... $1,295.50 plus 3.500% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00..... $1,645.00 plus 5.525% of the

excess over $80,000.00

Over $150,000.00 but not

over $500,000.00..... $5,512.50 plus 6.370% of the

excess over $150,000.00

Over $500,000.00 but not

over $5,000,000.00.. $27,807.50 plus 8.970% of the

excess over $500,000.00

Over $5,000,000.00 .......... $431,457.50 plus 10.75% of the

excess over $5,000,000.00

(7) for taxable years beginning on or after January 1, 2020:

If the taxable income is: The tax is:

Not over $20,000.00........ 1.400% of taxable income

Over $20,000.00 but not

over $50,000.00.... $280.00 plus 1.750% of the

excess over $20,000.00

Over $50,000.00 but not

over $70,000.00.... $805.00 plus 2.450% of the

excess over $50,000.00

Over $70,000.00 but not

over $80,000.00... $1,295.50 plus 3.500% of the

excess over $70,000.00

Over $80,000.00 but not

over $150,000.00.. $1,645.00 plus 5.525% of the

excess over $80,000.00

Over $150,000.00 but not

over $500,000.00.. $5,512.50 plus 6.370% of the

excess over $150,000.00

Over $500,000.00 but not

over $1,000,000.00.. $27,807.50 plus 8.970% of the

excess over $500,000.00

Over $1,000,000.00... $72,657.50 plus 10.750% of the

excess over $1,000,000.00

b. For married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts:

(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:

If the taxable income is: The tax is:

Not over $20,000.00.......... 2% of taxable income

Over $20,000.00 but not

over $35,000.00....... $400.00 plus 2.5% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00....... $775.00 plus 5.0% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00....... $1,025.00 plus 6.5% of the

excess over $40,000.00

Over $75,000.00 ........... $3,300.00 plus 7.0% of the

excess over $75,000.00

(2) for taxable years beginning on or after January 1, 1994 but before January 1, 1995:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.900% of taxable income

Over $20,000.00 but not

over $35,000.00........ $380.00 plus 2.375% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00........ $736.25 plus 4.750% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00........ $973.75 plus 6.175% of the

excess over $40,000.00

Over $75,000.00 .......... $3,135.00 plus 6.650% of the

excess over $75,000.00

(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.700% of taxable income

Over $20,000.00 but not

over $35,000.00....... $340.00 plus 2.125% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00.......... $658.75 plus 4.250% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00....... $871.25 plus 6.013% of the

excess over $40,000.00

Over $75,000.00 .......... $2,975.80 plus 6.580% of the

excess over $75,000.00

(4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.400% of taxable income

Over $20,000.00 but not

over $35,000.00........ $280.00 plus 1.750% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00........ $542.50 plus 3.500% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00........ $717.50 plus 5.525% of the

excess over $40,000.00

Over $75,000.00............ $2,651.25 plus 6.370% of the

excess over $75,000.00

(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2018:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.400% of taxable income

Over $20,000.00 but not

over $35,000.00........ $280.00 plus 1.750% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00........ $542.50 plus 3.500% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00....... $717.50 plus 5.525% of the

excess over $40,000.00

Over $75,000.00 but not

over $500,000.00...... $2,651.25 plus 6.370% of the

excess over $75,000.00

Over $500,000.00 ............ $29,723.75 plus 8.970% of the

excess over $500,000.00

(6) for taxable years beginning on or after January 1, 2018, but before January 1, 2020:

If the taxable income is: The tax is:

Not over $20,000.00.......... 1.400% of taxable income

Over $20,000.00 but not

over $35,000.00........ $280.00 plus 1.750% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00........ $542.50 plus 3.500% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00........ $717.50 plus 5.525% of the

excess over $40,000.00

Over $75,000.00 but not

over $500,000.00...... $2,651.25 plus 6.370% of the

excess over $75,000.00

Over $500,000.00 but not

over $5,000,000.00... $29,723.75 plus 8.970% of the

excess over $500,000.00

Over $5,000,000.00 .......... $433,373.75 plus 10.75% of the

excess over $5,000,000.00

(7) for taxable years beginning on or after January 1, 2020:

If the taxable income is: The tax is:

Not over $20,000.00...... 1.400% of taxable income

Over $20,000.00 but not

over $35,000.00....... $280.00 plus 1.750% of the

excess over $20,000.00

Over $35,000.00 but not

over $40,000.00...... $542.50 plus 3.500% of the

excess over $35,000.00

Over $40,000.00 but not

over $75,000.00...... $717.50 plus 5.525% of the

excess over $40,000.00

Over $75,000.00 but not

over $500,000.00... $2,651.25 plus 6.370% of the

excess over $75,000.00

Over $500,000.00 but not

over $1,000,000.00.. $29,723.75 plus 8.970% of the

excess over $500,000.00

Over $1,000,000.00.... $74,573.75 plus 10.750% of the

excess over $1,000,000.00

c. For the purposes of this section, an individual who would be eligible to file as a head of household for federal income tax purposes but for the fact that such taxpayer is a nonresident alien, shall determine tax pursuant to subsection a. of this section.

d. For the purposes of this section, for taxable year 2018, withholding by every employer from salaries, wages and other remuneration paid by an employer for services rendered described in subsections a. and b. of this section, in excess of $5,000,000 during that taxable year, shall be at the rate of 15.6% as soon as practicable but no later than September 1, 2018. The Director of the Division of Taxation is authorized to do all things necessary to implement the withholding tax prescribed by this section for taxable year 2018.

e. No additions to tax or penalty shall be imposed under N.J.S.54A:9-6 for insufficient payment of estimated tax that may otherwise be due on salaries, wages and other remuneration received before September 1, 2018, on which there is a rate of tax imposed pursuant to subsections a. and b. of this section.

f. An employer maintaining an office or transacting business within this State and making payment of any salaries, wages and remuneration subject to New Jersey gross income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law," pursuant to R.S.43:21-1 et seq., that is subject to New Jersey gross income tax shall not be subject to interest, penalties or other costs that may otherwise be imposed for insufficient withholding of salaries, wages and other remuneration made before September 1, 2018, that is directly attributable to the enactment of the taxable income tables and tax rates in subsections a. and b. of this section.

§ 54A:2-1a Determination of tax due, certain circumstances.

1. a. Notwithstanding the taxable income tables and tax rates provided in N.J.S.54A:2-1 or any other provision of law to the contrary, for taxable years beginning on or after January 1, 2009 but before January 1, 2010, the amount of tax due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxpayer whose taxable income exceeds $400,000 shall be determined pursuant to subsections b. and c. of this section as is applicable.

b. For married individuals filing a joint return and individuals filing as head of household or as surviving spouse for federal income tax purposes:

If the taxable income is: The tax is:

Over $400,000.00 but not

over $500,000.00 . . . . . . . $21,437.50 plus 8.0% of the excess over $400,000.00

Over $500,000.00 but not

over $1,000,000.00 . . . . . . $29,437.50 plus 10.25% of the excess over $500,000.00

Over $1,000,000.00 . . . . . . . $80,687.50 plus 10.75% of the excess over

$1,000,000.00

c. For married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts:

If the taxable income is: The tax is:

Over $400,000.00 but not

over $500,000.00 . . . . . . . $23,353.75 plus 8.0% of the excess over $400,000.00

Over $500,000.00 but not

over $1,000,000.00 . . . . . . $31,353.75 plus 10.25% of the excess over $1,000,000.00

Over $1,000,000.00 . . . . . . . $82,603.75 plus 10.75% of the excess over $1,000,000.00

d. No additions to tax or penalty shall be imposed under N.J.S.54A:9-6 for insufficient payment of estimated tax that may otherwise be due on salaries, wages and other remuneration received before October 1, 2009 upon which there is a rate of tax imposed pursuant to subsections b. and c. of this section.

e. An employer maintaining an office or transacting business within this State and making payment of any salaries, wages and remuneration subject to New Jersey gross income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law," pursuant to R.S.43:21-1 et seq., that is subject to New Jersey gross income tax shall not be subject to interest, penalties or other costs that may otherwise be imposed for insufficient withholding of salaries, wages and other remuneration made before October 1, 2009 that is directly attributable to the enactment of the taxable income tables and tax rates in subsections b. and c. of this section.

L.2009, c.69, s.1.

THE SECTION PREVIOUSLY ALLOCATED AS 54A:2-1b HAS BEEN REALLOCATED TO C.54A:3-9

§ 54A:2-1.1 Determination of tax, income of nonresident

4. a. For a taxable year to which a certification pursuant to section 3 of P.L.1993, c.320 (C.54A:2-1.2) does not apply, notwithstanding the provisions of N.J.S.54A:2-1, the tax due for each taxable year from a nonresident taxpayer shall be equal to the tax computed pursuant to N.J.S.54A:2-1 as if such nonresident were a resident, multiplied by a fraction, the numerator of which is the taxpayer's income from sources within this State determined in accordance with the provisions of N.J.S.54A:5-7 and N.J.S.54A:5-8 and the denominator of which is that taxpayer's gross income for the taxable year as if such taxpayer were a resident.

b. For a taxable year to which a certification pursuant to section 3 of P.L.1993, c.320 (C.54A:2-1.2) applies, the income of a nonresident individual shall be that part of the individual's income derived from sources within this State as defined in N.J.S.54A:1-1 et seq., except that income of a nonresident individual shall not include income derived from sources within this State from pensions and annuities as set forth in subsection j. of N.J.S.54A:5-1.

§ 54A:2-1.2 Review of New York enactments by Attorney General

3. The Attorney General shall review the enactments of the State of New York to determine if the method of taxation of the income from New York sources of taxpayers that are not residents of New York, enacted pursuant to 1987 N.Y. Laws 28, compiled as subsection (e) of N.Y. Tax 601, and requiring that every New York nonresident taxpayer compute a tax as if such resident were a resident and multiply that liability by a fraction the numerator of which is the taxpayer's New York source income as therein determined and the denominator of which is the taxpayer's federal adjusted gross income for the taxable year, has been repealed or superceded by subsequent enactment so as to restrict the computation of liability owed to New York to a method based only on the New York source income of the taxpayer. If the Attorney General shall so determine, the Attorney General shall, not later than five days after such enactment, certify to the Director of the Division of Taxation the taxable years for which the fractional method of liability calculation for nonresident taxpayers has been repealed or superceded.

§ 54A:2-2 Partners and partnerships

a. A partnership as such shall not be subject to the New Jersey Gross Income Tax. Individuals carrying on business as partners shall be liable for the New Jersey Gross Income Tax only in their separate or individual capacities, except as provided under section b. of this section.

b. A partnership shall report any federal partnership audit adjustments made by the Internal Revenue Service pursuant section 6225(a)(1) of the Internal Revenue Code (26 U.S.C. s.6225(a)(1)) to the Division of Taxation in the Department of the Treasury in accordance with subsection d. of section 8 of P.L.2022,c.133 (C.54:50-47). The partners of the reviewed year shall make payment of any New Jersey Gross Income Tax liability that results from the federal partnership audit adjustments reported on the Federal Adjustments Report, unless the partnership makes the election to pay tax on the partner's behalf.

Failure of the partnership, partner, tiered partner, indirect partner, or member to report or pay federal adjustments pursuant to section 6225(a) and section 6225(c) of the Internal Revenue Code shall not prevent the director from assessing the partnership, partner, tiered partner, indirect partner, or member for taxes they owe, using the best information available, in the event that the partnership, partner, tiered partner, indirect partner, or member fails to timely make any report or payment required by this section for any reason.

c. The director may adopt rules and regulations that the director deems necessary to effectuate the provisions of this section.

§ 54A:2-3 Associations taxable as corporations

An association, trust, or other unincorporated organization which is taxable as a corporation for Federal income tax purposes shall not be subject to tax under this act.

§ 54A:2-4 Minimum taxable income

Notwithstanding any other provisions of this act, a taxpayer shall not be subject to tax under this act if:

a. The taxpayer is filing as an unmarried individual, an estate or trust, with a gross income of

(1) $3,000 or less for taxable years beginning before January 1, 1994,

(2) $7,500 or less for taxable years beginning on or after January 1, 1994 but before January 1, 1999, and

(3) $10,000 or less for taxable years beginning on or after January 1, 1999;

b. The taxpayer is determining tax pursuant to subsection a. of N.J.S.54A:2-1, or is a married couple filing a joint return, with a gross income of

(1) $3,000 or less for taxable years beginning before January 1, 1994,

(2) $7,500 or less for taxable years beginning on or after January 1, 1994 but before January 1, 1999,

(3) $10,000 or less for taxable years beginning on or after January 1, 1999 but before January 1, 2000,

(4) $15,000 or less for taxable years beginning on or after January 1, 2000 but before January 1, 2001, and

(5) $20,000 or less for taxable years beginning on or after January 1, 2001; or

c. The taxpayer is a married person filing separately with a gross income of

(1) $1,500 or less for taxable years beginning before January 1, 1994,

(2) $3,750 or less for taxable years beginning on or after January 1, 1994 but before January 1, 1999,

(3) $5,000 or less for taxable years beginning on or after January 1, 1999 but before January 1, 2000,

(4) $7,500 or less for taxable years beginning on or after January 1, 2000 but before January 1, 2001, and

(5) $10,000 or less for taxable years beginning on or after January 1, 2001.

In the case of a nonresident, gross income shall mean gross income which such nonresident would have reported if he had been a resident.

Chapter 3

§ 54A:3-1 Personal exemptions and deductions.

Each taxpayer shall be allowed personal exemptions and deductions against his gross income as follows:

(a) Taxpayer. Each taxpayer shall be allowed a personal exemption of $1,000.00 which may be taken as a deduction from his New Jersey gross income.

(b) Additional exemptions. In addition to the personal exemptions allowed in (a), the following additional personal exemptions shall be allowed as a deduction from gross income:

1. For the taxpayer's spouse, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), who does not file separately - $1,000.00.

2. For each dependent who qualifies as a dependent of the taxpayer during the taxable year for federal income tax purposes - $1,500.00.

3. Taxpayer 65 years of age or over at the close of the taxable year - $1,000.00.

4. Taxpayer's spouse 65 years of age or over at the close of the taxable year - $1,000.00.

5. Blind or disabled taxpayer - $1,000.00.

6. Blind or disabled spouse - $1,000.00.

7. Taxpayer who is a veteran honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States, a reserve component thereof, or the National Guard of New Jersey in a federal active duty status, as those terms are used in N.J.S.38A:1-1 - $6,000.

(c) Special Rule. The personal exemptions allowed under this section shall be limited to that percentage which the total number of months within a taxpayer's taxable year under this act bears to 12. For this purpose 15 days or more shall constitute a month.

(d) (Deleted by amendment, P.L.1993, c.178).

(e) Nonresidents. For taxable years to which a certification pursuant to section 3 of P.L.1993, c.320 (C.54A:2-1.2) applies, a nonresident taxpayer shall be allowed the same deduction for personal exemptions as a resident taxpayer. However, if (1) the nonresident taxpayer's gross income which is subject to tax under this act is exceeded by (2) the gross income which the nonresident taxpayer would be required to report under this act if the taxpayer were a resident by more than $100.00, the taxpayer's deduction for personal exemptions shall be limited by the percentage which (1) is to (2).

§ 54A:3-1.1 Dependent under 22 in attendance at accredited post-secondary institution

In addition to the exemptions allowed under N.J.S. 54A:3-1, each taxpayer shall be allowed an additional exemption which may be taken as a deduction from his New Jersey gross income in amount of $1,000.00 for each dependent under the age of 22 years who is attending an accredited post-secondary institution of higher education on a full time basis and for whom the taxpayer paid one-half or more of the costs of tuition and maintenance of the dependent's attendance at such institution.

§ 54A:3-2 Alimony and separate maintenance payments

There shall be allowed as a deduction amounts includible under section 54A:5-1(n) with respect to payments included as income in the return of a former spouse or of a spouse receiving separate maintenance pursuant to a court decree (or which would have otherwise been includible if such payments were made to an individual subject to tax under this act).

§ 54A:3-3 Medical expenses.

(a) Each taxpayer shall be allowed to deduct from the taxpayer's gross income medical expenses for the taxpayer, the taxpayer's spouse, and the taxpayer's dependents with respect to such expenses that were paid during the taxable year and to the extent that such medical expenses exceed 2% of the taxpayer's gross income. In the case of a nonresident, gross income shall mean gross income which such nonresident would have reported if the taxpayer had been subject to tax during the entire taxable year as a resident.

(b) Special Rule for Decedents.

(1) Treatment of expenses paid after death. Expenses for the medical care of the taxpayer which are paid out of the taxpayer's estate during the one-year period beginning with the day after the day of the death shall be treated as paid by the taxpayer at the time incurred.

(2) Limitation. Paragraph (1) shall not apply if the amount paid is not allowable as a deduction in computing medical expense deductions for federal income tax purposes.

(c) Disallowance of amounts allowed for other purposes.

(1) Any expenses allowed as a deduction of expenses for household and dependent care services necessary for gainful employment shall not be allowed as an expense paid for medical care for purposes of this section.

(2) Any amounts paid or distributed out of a medical savings account that are excluded from gross income pursuant to section 5 of P.L.1997, c.414 (C.54A:6-27) shall not be allowed as an expense paid for medical care for purposes of this section.

(3) Any amounts allowed as a deduction for the health insurance costs of the self-employed pursuant to section 1 of P.L.1999, c.222 (C.54A:3-5) shall not be allowed as an expense paid for medical care for purposes of this section.

§ 54A:3-4 Deductions for contributions to medical savings account.

3. a. A taxpayer may deduct from the taxpayer's gross income an amount equal to the contributions to a medical savings account that the taxpayer is allowed for the taxable year as a deduction for federal income tax purposes pursuant to section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220.

b. The deduction provided by subsection a. of this section shall, notwithstanding any amendment or supplement to federal law, be allowed only to "eligible individuals" qualifying under the limitations of subsection (i), and subject to the numerical limits of subsection (j), of section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220, as in effect on January 1, 1997.

§ 54A:3-5 Self-employed individuals, deduction for health insurance costs.

1. A taxpayer who is a "self-employed individual" within the meaning of clause (B) of paragraph (1) of subsection (c) of section 401 of the federal Internal Revenue Code of 1986, 26 U.S.C.s.401, and a taxpayer treated as such a "self-employed individual" under that section pursuant to section 1372 of the federal Internal Revenue Code of 1986, 26 U.S.C.s.1372, shall be allowed to deduct from the taxpayer's gross income an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents; provided however, that the amount of such deduction shall not exceed the taxpayer's "earned income," as defined pursuant to subsection (c) of section 401 of the federal Internal Revenue Code of 1986, 26 U.S.C.s.401, derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established, and provided further that no deduction shall be allowed for coverage of any month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer.

§ 54A:3-6 Deduction for qualified conservation contribution

1. A taxpayer shall be allowed a deduction against gross income for a qualified conservation contribution, as defined under subsection (h) of section 170 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.170, made by the taxpayer of a qualified real property interest in property located in this State. The amount of the deduction in a taxable year shall be equal to the amount of the contribution allowed in the taxable year as a deduction pursuant to section 170 of the federal Internal Revenue Code of 1986 in computing the taxpayer's taxable income for federal income tax purposes.

§ 54A:3-7 Designation of "Health Enterprise Zones."

1. Each area that is designated by the Commissioner of Health and Senior Services as a State designated underserved area pursuant to N.J.S.18A:71C-35 shall be deemed to be a "Health Enterprise Zone" for the purposes of P.L.2004, c.139 (C.54A:3-7 et al.).

§ 54A:3-8 Tax deduction for qualified receipts, definitions.

2. a. A taxpayer who is providing primary care as defined in N.J.S.18A:71C-32 at:

(1) a practice that is located in a Health Enterprise Zone as described in section 1 of P.L.2004, c.139 (C.54A:3-7); or

(2) a qualified practice that is located within 5 miles of a Health Enterprise Zone as described in section 1 of P.L.2004, c.139 (C.54A:3-7);

shall be allowed to deduct from the taxpayer's gross income in a taxable year an amount equal to that proportion of the taxpayer's net income deriving from that practice for the taxable year that the qualified receipts of that practice for the taxable year bear to the total amount received for services at that practice for the taxable year.

b. For the purposes of this section:

"Qualified practice" means a practice at which 50% or more of the total amount received for services at that practice for the taxable year are qualified receipts and 50% or more of the patients whose services are compensated by qualified receipts reside in a Health Enterprise Zone; and

"Qualified receipts" means amounts received for services from the Medicaid program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), including amounts received from managed care organizations under contract with the Medicaid program, the FamilyCare Health Coverage Program pursuant to P.L.2000, c.71 (C.30:4J-1 et seq.), and the Children's Health Care Coverage Program pursuant to P.L.1997, c.272 (C.30:4I-1 et seq.) for providing health care services to eligible program recipients.

§ 54A:3-9 Alternative business calculation established.

1. a. Notwithstanding the provisions of N.J.S.54A:5-1, for the purposes of the alternative business calculation pursuant to this section a taxpayer who sustains a net loss in one or more of the net categories of gross income determined pursuant to subsections b., d., k., and p. of N.J.S.54A:5-1 shall net that loss against any other gains or losses sustained in those categories of gross income and any loss carryforward allowed pursuant to subsection b. of this section to determine alternative business income or loss.

b. Notwithstanding the provisions of N.J.S.54A:5-2, a taxpayer who sustains an alternative business loss pursuant to the provisions of subsection a. of this section may carry that loss forward, if necessary and in accordance with the terms and conditions prescribed by the director, for application pursuant to the provisions of subsection a. of this section during each of the 20 taxable years following the alternative business loss' taxable year.

c. (1) A taxpayer shall calculate regular business income as the total of the subsection b., d., k., and p. categories of gross income determined pursuant to N.J.S.54A:5-1 in accordance with N.J.S.54A:5-2.

(2) A taxpayer shall subtract alternative business income from regular business income determined pursuant to paragraph (1) of this subsection to determine the business increment.

(3) For purposes of calculating a taxpayer's liability pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., a taxpayer shall adjust the taxpayer's taxable income pursuant to the following schedule:

For taxable years beginning in 2012, the taxpayer shall subtract from taxable income 10% of the business increment;

For taxable years beginning in 2013, the taxpayer shall subtract from taxable income 20% of the business increment;

For taxable years beginning in 2014, the taxpayer shall subtract from taxable income 30% of the business increment;

For taxable years beginning in 2015, the taxpayer shall subtract from taxable income 40% of the business increment.

For taxable years beginning in 2016 and thereafter, the taxpayer shall subtract from taxable income 50% of the business increment.

§ 54A:3-10 Deduction from gross income for organ, bone marrow donor.

4. a. A taxpayer shall be allowed to deduct from gross income up to $10,000 of unreimbursed expenses specified in subsection b. of this section if the taxpayer or the taxpayer's dependent donates one or more of their human organs, or a part thereof, or bone marrow to another human for human organ transplantation.

b. The deduction allowed pursuant to this section may be claimed only for reasonable unreimbursed travel expenses, lodging expenses, and lost wages that are related to the donation and are incurred by the taxpayer in the taxable year.

c. The deduction allowed pursuant to this section shall be claimed in the taxable year in which the human organ transplantation occurs, except that any expenses specified in subsection b. of this section that are incurred in the previous or subsequent taxable year shall be claimed in the taxable year in which the expenses are incurred, but the combined amount deducted shall not exceed $10,000.

§ 54A:3-11 Short title.

1. Sections 2 through 5 of P.L.2021, c.128 (C.18A:71B-42.1 et al.) shall be known and may be cited as the "New Jersey College Affordability Act."

§ 54A:3-12 Allowable deduction in the amount of taxpayer's contribution.

3. A taxpayer with gross income of $200,000 or less shall be allowed a deduction, not to exceed $10,000, from the taxpayer's gross income for the taxable year in the amount of the taxpayer's contribution for the taxable year to an account established pursuant to the "New Jersey Better Educational Savings Trust Program," (N.J.S.18A:71B-35 et seq.).

§ 54A:3-13 Allowable deduction in the amount of student loan principal, interest payments.

4. A taxpayer with gross income of $200,000 or less shall be allowed a deduction, not to exceed $2,500, from the taxpayer's gross income for the taxable year in the amount of principal and interest payments paid on a student loan under the New Jersey College Loans to Assist State Students Loan Program established pursuant to N.J.S.18A:71C-21.

§ 54A:3-14 Allowable deduction in the amount of higher education tuition costs.

5. a. A taxpayer with gross income of $200,000 or less shall be allowed a deduction, not to exceed $10,000, from the taxpayer's gross income for the taxable year in the amount the taxpayer paid to an in-State institution of higher education during the taxable year for tuition costs related to the taxpayer's enrollment or attendance at the institution of higher education or related to the enrollment or attendance of a spouse or dependent of the taxpayer at the institution.

b. As used in this section, "tuition costs" means the charges imposed by an in-State institution of higher education that are designated by the institution as the tuition costs required for the enrollment or attendance of the taxpayer or a spouse or dependent of the taxpayer at the institution.

Chapter 3A

§ 54A:3A-15 Short title

1. This act shall be known and may be cited as the "Property Tax Deduction Act."

§ 54A:3A-16 Definitions relative to residential property taxes

2. As used in this act:

"Condominium" means the form of real property ownership provided for under the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.).

"Continuing care retirement community" means a residential facility primarily for retired persons where lodging and nursing, medical or other health related services at the same or another location are provided as continuing care to an individual pursuant to an agreement effective for the life of the individual or for a period greater than one year, including mutually terminable contracts, and in consideration of the payment of an entrance fee with or without other periodic charges.

"Cooperative" means a housing corporation or association which entitles the holder of a share or membership interest thereof to possess and occupy for dwelling purposes a house, apartment, manufactured or mobile home or other unit of housing owned or leased by the corporation or association, or to lease or purchase a unit of housing constructed or to be constructed by the corporation or association.

"Dwelling house" means any residential property assessed as real property which consists of not more than four units, of which not more than one may be used for commercial purposes, but shall not include a unit in a condominium, cooperative, horizontal property regime or mutual housing corporation.

"Homestead" means:

a. a dwelling house and the land on which that dwelling house is located which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence;

b. a dwelling house situated on land owned by a person other than the taxpayer which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence;

c. a condominium unit or a unit in a horizontal property regime or a continuing care retirement community which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence.

In addition to the generally accepted meaning of owned or ownership, a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more, is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear, separately from any other charges, the proportionate share of property taxes attributable to the unit that the resident occupies;

d. a unit in a cooperative or mutual housing corporation which constitutes the place of domicile of a residential shareholder or lessee therein, or of a lessee or shareholder who is not a residential shareholder therein, which is used by the taxpayer as the taxpayer's principal residence; and

e. a unit of residential rental property, which unit constitutes the place of the taxpayer's domicile and is used by the taxpayer as the taxpayer's principal residence.

"Horizontal property regime" means the form of real property ownership provided for under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.).

"Mutual housing corporation" means a corporation not-for-profit, incorporated under the laws of this State on a mutual or cooperative basis within the scope of section 607 of the Lanham Act (National Defense Housing), Pub.L.849, 76th Congress (42 U.S.C.1521 et seq.), as amended, which acquired a National Defense Housing Project pursuant to that act.

"Principal residence" means a homestead actually and continually occupied by a taxpayer as the taxpayer's permanent residence, as distinguished from a vacation home, property owned and rented or offered for rent by the taxpayer, and other secondary real property holdings.

"Property taxes" means payments to municipalities for which an assessment by a municipality has been made on an ad valorem basis on both land and improvements, and shall not include payments made in lieu of taxes.

"Rent constituting property taxes" means 18% of the rent paid by the taxpayer for occupancy during the taxable year of a unit of residential rental property which the taxpayer occupies as a principal residence; notwithstanding the definition of "property taxes" herein, rent constituting property taxes includes the rent paid for the occupancy of a manufactured home installed in a mobile home park.

"Residential rental property" means:

a. any building or structure or complex of buildings or structures in which dwelling units are rented or leased or offered for rental or lease for residential purposes;

b. a rooming house, hotel or motel, if the rooms constituting the homestead are equipped with kitchen and bathroom facilities; and

c. any building or structure or complex of buildings or structures constructed under the following sections of the National Housing Act (Pub.L.73-479) as amended and supplemented: section 202, Housing Act of 1959 (Pub.L.86-372) and as subsequently amended, section 231, Housing Act of 1959.

"Residential shareholder in a cooperative or mutual housing corporation" means a tenant or holder of a membership interest in that cooperative or corporation, whose residential unit therein constitutes the tenant's or holder's domicile and principal residence, and who may deduct real property taxes for purposes of federal income tax pursuant to section 216 of the federal Internal Revenue Code of 1986, 26 U.S.C.216.

§ 54A:3A-17 Resident taxpayer allowed certain property tax deduction; limitations.

3. a. A resident taxpayer under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be allowed a deduction from gross income for the amount of property tax credit, as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), plus property taxes paid by the resident taxpayer, the total of which shall not exceed $15,000, subject to the limitations of subsection f. of this section. Property taxes deductible under this section shall be due and paid for the calendar year in which the taxes are due and payable on the taxpayer's homestead.

b. A deduction for property taxes or property tax credits shall be allowed pursuant to this section in relation to the amount of the property taxes or property tax credits actually paid by a resident taxpayer who has more than one homestead, but the aggregate amount of the property taxes or property tax credits claimed shall not exceed the total of the proportionate amounts of property taxes paid for each homestead for the portion of the taxable year for which the taxpayer occupied it as the taxpayer's principal residence.

c. If title to a homestead is held by more than one individual as joint tenants or tenants in common, each individual shall be allowed a deduction pursuant to this section only in relation to the individual's proportionate share of the property taxes assessed and levied against the homestead. The proportionate share shall be equal to that of all other individuals who hold the title, but if the conveyance under which the title is held provides for unequal interests therein, a taxpayer's share of the property taxes shall be in proportion to the taxpayer's interest in the title.

d. If title to a homestead is held by a husband and wife who own the homestead as tenants by the entirety, or if that husband and wife are both residential shareholders of a cooperative or mutual housing corporation and occupy the same homestead therein, and who elect to file separate income tax returns pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., that husband and wife shall each be entitled to one-half of the deduction for property taxes for which they may be jointly eligible pursuant to this section.

e. If the homestead is a dwelling house consisting of more than one unit, that taxpayer shall be allowed a deduction for property taxes or property tax credits only in relation to the proportionate share of the property taxes assessed and levied against the residential unit occupied by the taxpayer, as determined by the local tax assessor.

f. Notwithstanding the provisions of subsection a. of this section to the contrary: (1) a resident taxpayer shall be allowed a deduction for a taxpayer's taxable year beginning during 1996 based on 50% of the property taxes not in excess of $5,000 paid on the taxpayer's homestead; and (2) a resident taxpayer shall be allowed a deduction for a taxpayer's taxable year beginning during 1997 based on 75% of the property taxes not in excess of $7,500 paid on the taxpayer's homestead.

g. Notwithstanding any other provision of this section, the deduction allowed under this section to a resident taxpayer eligible to receive a homestead property tax reimbursement pursuant to P.L.1997, c.348 (C.54:4-8.67 et al.) shall not exceed that resident taxpayer's base year property tax liability as determined pursuant to P.L.1997, c.348 (C.54:4-8.67 et al.).

h. Notwithstanding any other provision of this section, for the taxable year beginning January 1, 2009, a taxpayer who has gross income for the taxable year of more than $250,000 and is not:

(1) 65 years of age or older at the close of the taxable year; or

(2) allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection (b) of N.J.S.54A:3-1, shall not be allowed a deduction pursuant to this section;

provided however, the deduction for a taxpayer who has gross income for the taxable year of more than $150,000 but not exceeding $250,000 and is not:

(1) 65 years of age or older at the close of the taxable year; or

(2) allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection (b) of N.J.S.54A:3-1, shall not exceed $5,000.

§ 54A:3A-18 Deduction allowed resident taxpayer whose homestead is a unit of residential rental property; limitations.

4. a. A resident taxpayer whose homestead is a unit of residential rental property shall be allowed a deduction from gross income for that portion of the rent constituting property taxes not in excess of $15,000, subject to the limitations of subsection d. of this section, due and paid for the calendar year in which the rent constituting taxes is due and payable, for occupancy of that homestead.

b. A husband and wife who elect to file separate income tax returns pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall each be entitled to one-half of the property tax deduction allowed pursuant to this section.

c. If more than one taxpayer, other than husband and wife, qualify to deduct rent constituting property taxes by reason of their having occupied the same rented homestead, it shall be presumed that the deduction shall be equally divided. A taxpayer may, however, deduct an amount for rent constituting property taxes in the same proportion that the rent paid by that taxpayer bears to the total rent paid by all tenants of the same unit.

d. Notwithstanding the provisions of subsection a. of this section to the contrary: (1) a resident taxpayer whose homestead is a unit of residential rental property shall be allowed a deduction for the taxpayer's taxable year beginning during 1996 based on 50% of the rent constituting property taxes not in excess of $5,000 paid for the occupancy of that homestead; and (2) a resident taxpayer whose homestead is a unit of residential rental property shall be allowed a deduction for the taxpayer's taxable year beginning during 1997 based on 75% of the rent constituting property taxes not in excess of $7,500 paid for the occupancy of that homestead.

§ 54A:3A-19 Deduction for property taxes; limitations.

5. a. If a taxpayer who is eligible for a deduction for property taxes paid under section 3 of P.L.1996, c.60 (C.54A:3A-17) for a part of the taxable year is also eligible for a deduction for rent constituting property taxes under section 4 of this act for a part of the taxable year, the taxpayer shall be allowed a deduction, not in excess of $15,000, subject to the limitations of subsection b. of this section, the amount of which shall be equal to the sum of the amount of property tax credit, as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), plus the amount of property taxes due and paid for the calendar year in which the property taxes are due and payable on a homestead that is not a unit of residential rental property and the amount of rent constituting property taxes due and paid for the calendar year in which the rent constituting property taxes is due and payable for the occupancy of a homestead that is a unit of residential rental property, provided however, that the amount of property taxes and property tax credits shall be subject to the limitations set forth in subsections b. through e. of section 3 of P.L.1996, c.60 (C.54A:3A-17) and the amount of rent constituting property taxes shall be subject to the limitations set forth in subsections b. and c. of section 4 of P.L.1996, c.60 (C.54A:3A-18) as may be applicable.

b. Notwithstanding the provisions of subsection a. of this section to the contrary: (1) a taxpayer who is eligible for a deduction for property taxes paid under section 3 of P.L.1996, c.60 (C.54A:3A-17) for a part of the taxable year and is also eligible for a deduction for rent constituting property taxes under section 4 of P.L.1996, c.60 (C.54A:3A-18) for a part of the taxable year, shall be allowed a deduction for the taxpayer's taxable year beginning during 1996 based on 50% of an amount not in excess of $5,000, the amount of which shall be equal to the sum of the amount of property taxes paid on a homestead that is not a unit of residential rental property and the amount of rent constituting property taxes paid for the occupancy of a homestead that is a unit of residential rental property; and (2) a taxpayer who is eligible for a deduction for property taxes paid under section 3 of P.L.1996, c.60 (C.54A:3A-17) for a part of the taxable year and is also eligible for a deduction for rent constituting property taxes under section 4 of P.L.1996, c.60 (C.54A:3A-18) for a part of the taxable year, shall be allowed a deduction for the taxpayer's taxable year beginning during 1997 based on 75% of an amount not in excess of $7,500, the amount of which shall be equal to the sum of the amount of property taxes paid on a homestead that is not a unit of residential rental property and the amount of rent constituting property taxes paid for the occupancy of a homestead that is a unit of residential rental property.

§ 54A:3A-20 Credit instead of deduction; limitations; annual application

6. a. (1) Notwithstanding any provision of this act to the contrary, commencing with the taxpayer's taxable year beginning on or after January 1, 1996:

(a) a taxpayer; or

(b) a resident of this State who is 65 years of age or older at the close of the taxable year or who is allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1 but who, pursuant to N.J.S.54A:2-4, is not subject to tax; and,

who paid property taxes or rent constituting property taxes on a homestead during the calendar year may elect to take a credit instead of the deduction provided pursuant to section 3, 4, or 5 in the amount of $50, subject to the provisions of paragraph (2) of this subsection.

(2) Notwithstanding the provisions of paragraph (1) of this subsection, the amount of tax liability reduction or credit allowed for the taxpayer's taxable year beginning during 1996 shall be $25 and the amount of tax liability reduction or credit allowed for the taxpayer's taxable year beginning during 1997 shall be $37.50.

b. A husband and wife who elect to file separate income tax returns pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall each be entitled to one-half of the credit allowed pursuant to subsection a. of this section.

c. The credit shall be paid to the taxpayer as a refund of overpayment pursuant to N.J.S.54A:9-7, provided however, that subsection (f) of that section shall not apply. The credit for a claimant qualified under subsection a. of this section who, pursuant to N.J.S.54A:2-4, is not subject to tax, shall be applied for annually on an application as shall be made available by the director, to be filed with the director on or before the date for filing annual gross income tax returns. The director shall determine the form and manner by which a qualified applicant shall apply for a refund of an overpayment pursuant to this section, and the time of the refund of the overpayment. For the purposes of this section, refunds of overpayments may be combined with payments of rebates pursuant to P.L.1990, c.61 (C.54:4-8.57 et seq.).

§ 54A:3A-21 Benefits not subject to garnishment, attachment, other legal process

7. The benefits provided for in P.L.1996, c.60 (C.54A:3A-15 et al.) shall not be subject to garnishment, attachment or other legal process, except as provided in section 1 of P.L.1981, c.239 (C.54A:9-8.1) or except for an income withholding order issued pursuant to P.L.1981, c.417 (C.2A:17-56.7 et seq.), and the payment of the benefits shall not be anticipated.

§ 54A:3A-22 Determination of form, manner of application for benefits; regulations

8. The director shall determine the form and manner of a qualified applicant's application for the benefits provided for in P.L.1996, c.60 (C.54A:3A-15 et al.). The director may prescribe such regulations as the director may deem necessary to administer and enforce the provisions of P.L.1996, c.60 (C.54A:3A-15 et al.), including but not limited to the method for determining an applicant's benefits as provided pursuant to sections 3, 4, 5 and 6 of P.L.1996, c.60 (C.54A:3A-17, C.54A:3A-18, C.54A:3A-19 and C.54A:3A-20), due dates, and the form of payment.

Chapter 4

§ 54A:4-1 Resident credit for tax of another state.

(a) A resident taxpayer shall be allowed a credit against the tax otherwise due under this act for the amount of any income tax or wage tax imposed for the taxable year by another state of the United States or political subdivision of such state, or by the District of Columbia, with respect to income which is also subject to tax under this act, except as provided by subsections (c) and (d) of this section.

(b) The credit provided under this section shall not exceed the proportion of the tax otherwise due under this act that the amount of the taxpayer's income subject to tax by the other jurisdiction bears to his entire New Jersey income.

(c) No credit shall be allowed against the tax otherwise due under this act for the amount of any income tax or wage tax imposed for the taxable year on S corporation income allocated to this State.

(d) No credit shall be allowed for the amount of any taxes paid or accrued for the taxable year on or measured by profits or income imposed on or paid on behalf of a person other than the taxpayer, whether or not the taxpayer may be held liable for the tax.

(e) Readjustment of the tax of another state or political subdivision thereof--if the taxpayer is allowed credit under this section for more or less of the tax of another state or political subdivision thereof than he is finally required to pay, the taxpayer shall send notice of the difference to the director who shall redetermine the tax for any years affected regardless of any otherwise applicable statute of limitations. A taxpayer may readjust the credit under this subsection when another state changes or corrects income reportable there either within the limitation period prescribed in N.J.S.54A:9-8 or within one year after the date the taxpayer received notification that the other state's income tax was due, whichever of such periods expires later. The division shall not allow a credit or refund unless the taxpayer files a claim within such period.

(f) A resident taxpayer shall be allowed a credit against the tax otherwise due under this act for the amount of any tax that the director determines is substantially similar to the tax imposed pursuant to section 3 of P.L.2019, c.320 (C.54A:12-3), for the taxable year, by another state of the United States or political subdivision of such state, or by the District of Columbia, with respect to the direct and indirect distributive proceeds from a pass-through entity, which distributive proceeds are also subject to tax under this act. A credit allowed pursuant to this subsection shall not exceed what would have been allowed if the income was taxed at the individual level and not taxed at the entity level.

For purposes of this subsection, "distributive proceeds" and "pass-through entity" mean the same as those terms are used in section 2 of P.L.2019, c.320 (C.54A:12-2).

§ 54A:4-1.1 Resident taxpayer, income, wage tax refund denied, appeal, judgement resulting in refund, credit against tax.

3. a. For taxable years beginning on and after January 1, 2020 but before January 1, 2024, a resident taxpayer who:

(1) pays any income tax or wage tax imposed for the taxable year by another state of the United States, or political subdivision of such state, or by the District of Columbia;

(2) applies for and is denied a refund from such state or jurisdiction for taxes paid to that state or jurisdiction on income derived from services rendered while the resident taxpayer was within New Jersey;

(3) files an appeal with a tax court or tribunal through which the resident taxpayer formally protests the denial by another state or jurisdiction of the refund requested by the resident taxpayer for taxes paid on income derived from services rendered while the resident taxpayer was within New Jersey; and

(4) obtains a final judgement from the tax court or tribunal resulting in the resident taxpayer being refunded taxes paid to another state or jurisdiction on income derived from services rendered while the resident taxpayer was within New Jersey shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in amount equal to 50 percent of the amount of taxes that are owed to the State of New Jersey as a result of the readjustment of the credit for tax of another state pursuant to subsection (e) of N.J.S.54A:4-1.

b. If the amount of the credit allowed pursuant to subsection a. of this section 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; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply.

§ 54A:4-1.2 Regulations.

5. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt, immediately upon filing with the Office of Administrative Law, regulations that the director deems necessary to implement the provisions of sections 1 through 3 of P.L.2023, c.125 (C.54A:4-1.1 et al.), which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The director shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

§ 54A:4-2 Credit for taxes withheld, paid by S corporation

Credit for taxes withheld. a. Any amount of tax actually deducted and withheld by an employer under this act in any calendar year shall be deemed to have been paid to the director on behalf of the person from whom withheld, and such person shall be credited with having paid that amount of tax for the taxable year beginning in such calendar year. For a taxable year of less than 12 months, the credit shall be made under regulations of the director.

b. An amount of tax actually paid to the director by an S corporation pursuant to subsection c. of section 4 of P.L.1993, c.173 (C.54:10A-5.23), shall be credited to the shareholder of the S corporation on whose behalf the payment was made as of the date of its receipt by the director, except as otherwise provided by N.J.S.54A:9-11, and the shareholder shall be credited with having paid that amount of tax for the taxable year in which the S corporation's accounting or privilege period ends.

§ 54A:4-4 Credit in lieu of refund of unemployment compensation contributions

a. Any employee who is a taxpayer and entitled, pursuant to the provisions of R.S. 43:21-7(d)(3) or section 1 of P.L.1944, c. 81 (C. 43:21-14.1), to a refund of contributions deducted during a tax year from his wages shall, in lieu of such refund, be entitled to a credit in the full amount thereof against the tax otherwise due on his New Jersey gross income for that tax year if he submits his claim for the credit and accompanies that claim with evidence of his right to the credit in such manner as the Director of the Division of Taxation may by regulation provide. In any case in which the amount, or any portion thereof, of any credit allowed hereunder results in or increases an excess of income tax payment over income tax liability, the amount of such new or increased excess shall be considered an overpayment and shall be refunded to the taxpayer in the manner provided by subsection (a) of N.J.S. 54A:9-7.

b. On the first day of each month, or at such other time as the director shall determine, the director shall forward to the Division of Unemployment and Temporary Disability Insurance a statement of the total amount of credits actually allowed pursuant to subsection a. of this section during the preceding month or period covered by the statement. Such statement shall indicate the totals of credits allowed on claims and shall be accompanied by such documents as the director and the Director of the Division of Unemployment and Disability Insurance shall prescribe. Moneys reimbursed by the Division of Unemployment and Temporary Disability Insurance to the director shall be treated as taxes collected under the provisions of this Title.

§ 54A:4-5 Reimbursement of director by division of unemployment and temporary disability insurance

Upon receipt from the director of a statement of the total amount of State income tax credits allowed on claims, the Division of Unemployment and Temporary Disability Insurance shall within 5 days reimburse to the director from the respective funds sums equal to the amounts so allowed. No interest shall be paid with respect to the sums reimbursed.

§ 54A:4-6 Findings, declarations relative to an earned income tax credit

1. The Legislature finds and declares that:

a. Since its enactment in 1975, the federal earned income tax credit has received bipartisan support and has proven to be one of the nation's most effective anti-poverty programs for working families by encouraging work, supplementing earnings and lifting nearly five million people out of poverty each year, approximately half of them children;

b. The federal earned income tax credit has contributed to a significant increase in labor force participation among New Jersey families;

c. A New Jersey Earned Income Tax Credit will build upon the federal program by cutting taxes for families struggling to provide for their children, reducing child poverty, supporting welfare-to-work efforts and making New Jersey a better place to live, work and raise a family;

d. Over the last six years, New Jersey's unemployment rate has fallen to its lowest rate in nearly a decade, and a significant number of the State's families who were dependent on welfare have made the transition from public assistance to work, often beginning in low-wage or entry-level positions; and

e. A New Jersey Earned Income Tax Credit can further promote work and job retention by supplementing the incomes of nearly 280,000 low-income working families as they move up the career ladder and remain independent from public assistance.

§ 54A:4-7 New Jersey Earned Income Tax Credit program.

2. There is established the New Jersey Earned Income Tax Credit program in the Division of Taxation in the Department of the Treasury.

a. (1) A resident individual who is eligible for a credit under section 32 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.32) shall be allowed a credit for the taxable year equal to a percentage, as provided in paragraph (2) of this subsection, of the federal earned income tax credit that would be allowed to the individual or the married individuals filing a joint return under section 32 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.32) for the same taxable year for which a credit is claimed pursuant to this section, subject to the restrictions of this subsection and subsections b., c., d. and e. of this section and the modifications of paragraph (4) of this subsection.

(2) For the purposes of the calculation of the New Jersey earned income tax credit, the percentage of the federal earned income tax credit referred to in paragraph (1) of this subsection shall be:

(a) 10% for the taxable year beginning on or after January 1, 2000, but before January 1, 2001;

(b) 15% for the taxable year beginning on or after January 1, 2001, but before January 1, 2002;

(c) 17.5% for the taxable year beginning on or after January 1, 2002, but before January 1, 2003;

(d) 20% for taxable years beginning on or after January 1, 2003, but before January 1, 2008;

(e) 22.5% for taxable years beginning on or after January 1, 2008 but before January 1, 2009;

(f) 25% for taxable years beginning on or after January 1, 2009 but before January 1, 2010;

(g) 20% for taxable years beginning on or after January 1, 2010, but before January 1, 2015;

(h) 30% for taxable years beginning on or after January 1, 2015, but before January 1, 2016;

(i) 35% for taxable years beginning on or after January 1, 2016, but before January 1, 2018;

(j) 37% for the taxable year beginning on or after January 1, 2018, but before January 1, 2019;

(k) 39% for the taxable year beginning on or after January 1, 2019, but before January 1, 2020; and

(l) 40% for taxable years beginning on or after January 1, 2020.

(3) To qualify for the New Jersey earned income tax credit, if the claimant is married, except for a claimant who files as a head of household or surviving spouse for federal income tax purposes for the taxable year, the claimant shall file a joint return or claim for the credit.

(4) A resident individual who is at least 18 years of age or older, but cannot claim a qualifying child as defined under section 152 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.152) for the federal earned income tax credit, shall be eligible for the New Jersey earned income tax credit if that resident individual is ineligible to claim the federal earned income tax credit due to age requirements. The resident individual shall meet all qualifications, except for the minimum or maximum age, for the federal earned income tax credit in order to be eligible for the New Jersey earned income tax credit. Calculation of the New Jersey earned income tax credit available to individuals pursuant to this paragraph shall be predicated on the federal maximum amount for taxpayers with no qualifying child for each taxable year beginning on and after January 1, 2020.

b. In the case of a part-year resident claimant, the amount of the credit allowed pursuant to this section shall be pro-rated, based upon that proportion which the total number of months of the claimant's residency in the taxable year bears to 12 in that period. For this purpose, 15 days or more shall constitute a month.

c. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under N.J.S.54A:1-1 et seq., after all other credits and payments. 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; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. The credit provided under this section as a credit against the tax otherwise due and the amount of the credit treated as an overpayment shall be treated as a credit towards or overpayment of gross income tax, subject to all provisions of N.J.S.54A:1-1 et seq., except as may be otherwise specifically provided in P.L.2000, c.80 (C.54A:4-6 et al.).

d. The Director of the Division of Taxation in the Department of the Treasury shall establish a program for the distribution of earned income tax credits pursuant to the provisions of this section.

e. Any earned income tax credit pursuant to this section shall not be taken into account as income or receipts for purposes of determining the eligibility of an individual for benefits or assistance or the amount or extent of benefits or assistance under any State program and, to the extent permitted by federal law, under any State program financed in whole or in part with federal funds.

§ 54A:4-8 Annual appropriation for administration

3. There shall be annually appropriated to the Department of the Treasury such amount as the Director of the Division of Budget and Accounting in the Department of the Treasury shall determine is necessary for the administrative cost of implementing the provisions of this act.

§ 54A:4-9 Availability of statistical information

4. The Department of the Treasury shall make available to the Department of Human Services necessary statistical information obtained with respect to the New Jersey Earned Income Tax Credit program, in a usable format and in a timely manner, to prepare federal and other reports.

§ 54A:4-10 Regulations

5. a. The Director of the Division of Taxation in the Department of the Treasury shall adopt regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and prescribe forms to administer the provisions of this act.

b. Notwithstanding the provisions of P.L.1968, c.410 to the contrary, the director may adopt, immediately upon filing with the Office of Administrative Law, such regulations as the director deems necessary to implement the provisions of this act, which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The regulation may thereafter be amended, adopted or readopted by the director as the director deems necessary in accordance with the requirements of P.L.1968, c.410.

§ 54A:4-11 Gross income tax credit for employment of certain handicapped persons.

2. a. A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 20% of the salary and wages paid by the taxpayer during the taxable year for the employment of a qualified person during the taxable year but not to exceed $1,000 for each qualified person for the taxable year.

b. As used in this section:

"Qualified person" means an extended employee, within the meaning of that term as set forth in section 2 of P.L.1971, c.272 (C.34:16-40), to whom the Commissioner of the Department of Labor and Workforce Development, under subsection (b) of section 18 of P.L.1966, c.113 (C.34:11-56a17), shall have issued a special license authorizing employment at wages less than the minimum wage rate, and who, for at least 26 weeks during the taxable year, shall have performed at least 25 hours per week of work at or under the supervision of a sheltered workshop pursuant to a contract between the taxpayer and the sheltered workshop.

"Sheltered workshop" means an occupation-oriented facility operated by a non-profit agency with which the Division of Vocational Rehabilitation Services in the New Jersey Department of Labor and Workforce Development shall have entered into a contract under section 4 of P.L.1971, c.272 (C.34:16-42) to furnish extended employment programs to eligible individuals.

c. The amount of the credits applied under this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50% of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the business or professional activity in which the taxpayer employs the qualified person during that taxable year, bears to the taxpayer's entire gross income for that year. Credits allowed pursuant to this section shall be taken only after the taxpayer has taken all credits allowed under section 2 of P.L.2000, c.80 (C.54A:4-7). The amount of the credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried over, if necessary to the seven taxable years following the taxable year for which the credit was allowed.

d. A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.

§ 54A:4-12b Tax credit, film expenses, certain.

2. a. (1) A taxpayer, upon approval of an application to the authority and the director, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to, in the case of a taxpayer designated as a New Jersey studio partner or New Jersey film-lease production company, 40 percent, and in the case of a taxpayer other than a New Jersey studio partner or New Jersey film-lease production company, 35 percent, of the qualified film production expenses of the taxpayer during a taxable year commencing on or after July 1, 2018 but before July 1, 2049, provided that:

(a) at least 60 percent of the total film production expenses, exclusive of post-production costs, of the taxpayer are incurred for services performed and goods purchased through vendors authorized to do business in New Jersey or the qualified film production expenses of the taxpayer during the taxable year for services performed and goods purchased through vendors authorized to do business in New Jersey exceed $1,000,000 per production;

(b) principal photography of the film commences within 180 days from the date of the original application for the tax credit;

(c) the film includes, when determined to be appropriate by the commission, at no cost to the State, marketing materials promoting this State as a film and entertainment production destination, which materials shall include placement of a "Filmed in New Jersey" or "Produced in New Jersey" statement, or an appropriate logo approved by the commission, in the end credits of the film;

(d) the taxpayer submits a tax credit verification report prepared by an independent certified public accountant licensed in this State in accordance with subsection g. of this section; and

(e) the taxpayer complies with the withholding requirements provided for payments to loan-out companies and independent contractors in accordance with subsection h. of this section.

(2) Notwithstanding the provisions of paragraph (1) of subsection a. of this section to the contrary, the tax credit allowed pursuant to this subsection against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be in an amount equal to, in the case of a taxpayer designated as a New Jersey studio partner, 40 percent, in the case of a taxpayer designated as a New Jersey film-lease production company, 35 percent, and in the case of a taxpayer other than a New Jersey studio partner or New Jersey film-lease production company, 30 percent, of the qualified film production expenses of the taxpayer during a taxable year that are incurred for services performed and tangible personal property purchased for use at a sound stage or other location that is located in the State within a 30-mile radius of the intersection of Eighth Avenue/Central Park West, Broadway, and West 59th Street/Central Park South, New York, New York.

b. (1) A taxpayer, upon approval of an application to the authority and the director, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to: 30 percent of the qualified digital media content production expenses of the taxpayer during a taxable year commencing on or after July 1, 2018 but before July 1, 2049, provided that:

(a) at least $2,000,000 of the total digital media content production expenses of the taxpayer are incurred for services performed and goods purchased through vendors authorized to do business in New Jersey, provided, however, that for applications submitted after the effective date of P.L.2024, c.33, qualified wage and salary payments made to full-time employees working on digital media shall not be deemed an expense incurred for services performed;

(b) at least 50 percent of the qualified digital media content production expenses of the taxpayer are for wages and salaries paid to full-time or full-time equivalent employees in New Jersey;

(c) the taxpayer submits a tax credit verification report prepared by an independent certified public accountant licensed in this State in accordance with subsection g. of this section; and

(d) the taxpayer complies with the withholding requirements provided for payments to loan-out companies and independent contractors in accordance with subsection h. of this section.

(2) Notwithstanding the provisions of paragraph (1) of subsection b. of this section to the contrary, the tax credit allowed pursuant to this subsection against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be in an amount equal to 35 percent of the qualified digital media content production expenses of the taxpayer during a taxable year that are incurred for services performed and tangible personal property purchased through vendors whose primary place of business is located in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem County.

(3) Notwithstanding the provisions of paragraph (1) of this subsection to the contrary, the tax credit allowed pursuant to this subsection against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be in an amount equal to 40 percent of the qualified digital media content production expenses of the taxpayer during a taxable year that are incurred for post-production services, including visual effects services performed at a New Jersey film-lease partner facility, that are incurred by a taxpayer that is a New Jersey film-lease post-production company, or that are incurred by a taxpayer that is a New Jersey studio partner, provided that:

(a) at least $500,000 of the qualified digital media content production expenses are incurred for post-production services, including visual effects services performed at a New Jersey film-lease partner facility, are incurred by a taxpayer that is a New Jersey film-lease post-production company, or are incurred by a taxpayer that is a New Jersey studio partner;

(b) the taxpayer submits a tax credit verification report prepared by an independent certified public accountant licensed in this State in accordance with subsection g. of this section; and

(c) the taxpayer complies with the withholding requirements provided for payments to loan-out companies and independent contractors in accordance with subsection h. of this section.

(4) Notwithstanding the provisions of paragraph (1) of this subsection to the contrary, the tax credit allowed pursuant to this subsection against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be in an amount equal to 35 percent of the qualified digital media content production expenses of the taxpayer during a taxable year that are incurred for post-production services, including visual effects services performed by a qualified post-production company, provided that:

(a) at least $500,000 of the qualified digital media content production expenses of the taxpayer are incurred for post-production services, including visual effects services performed by a taxpayer that is a qualified post-production company, which may include qualified digital media content production expenses incurred for post-production, including visual effects activities performed by a business entity in which the qualified post-production company has an ownership interest of at least 51 percent;

(b) the taxpayer submits a tax credit verification report prepared by an independent certified public accountant licensed in this State in accordance with subsection g. of this section; and

(c) the taxpayer complies with the withholding requirements provided for payments to loan-out companies and independent contractors in accordance with subsection h. of this section.

c. No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the taxable year for which a tax credit authorized pursuant to this section is allowed. The order of priority in which the tax credit allowed pursuant to this section and any other tax credits allowed by law may be taken shall be as prescribed by the director. The amount of the tax credit applied under this section against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law shall not reduce the tax liability of the taxpayer to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection or under other provisions of N.J.S.54A:1-1 et seq., may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed.

d. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

A business entity that is not a gross income "taxpayer" as defined and used in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and therefore is not directly allowed a credit under this section, but otherwise meets all the other requirements of this section, shall be considered an eligible applicant and "taxpayer" as that term is used in this section, and the application of an otherwise allowed credit amount shall be distributed to appropriate gross income taxpayers pursuant to the other requirements of this subsection.

e. (1) A taxpayer, with an application for a tax credit provided for in subsection a. or subsection b. of this section, may apply to the authority and the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of the tax credit against the tax liability of the taxpayer. The tax credit transfer certificate, upon receipt thereof by the taxpayer from the authority and the director, may be sold or assigned, in full or in part, to any other taxpayer that may have a tax liability under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54A:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial assistance to be provided by the purchaser or assignee to the taxpayer that has applied for and been granted the tax credit. The tax credit transfer certificate provided to the taxpayer shall include a statement waiving the taxpayer's right to claim that amount of the tax credit against the tax imposed pursuant to N.J.S.54A:1-1 et seq. that the taxpayer has elected to sell or assign. The sale or assignment of any amount of a tax credit transfer certificate allowed under this section shall not be exchanged for consideration received by the taxpayer of less than 75 percent of the transferred tax credit amount. Any amount of a tax credit transfer certificate used by a purchaser or assignee against a tax liability under N.J.S.54A:1-1 et seq. shall be subject to the same limitations and conditions that apply to the use of a tax credit pursuant to subsections c. and d. of this section. Any amount of a tax credit transfer certificate obtained by a purchaser or assignee under subsection e. of this section may be applied against the purchaser's or assignee's tax liability under P.L.1945, c.162 (C.54:10A-1 et seq.), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54A:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall be subject to the same limitations and conditions that apply to the use of a credit pursuant to subsection c. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b).

(2) A credit issued to a taxpayer, including the purchaser or assignee of a tax credit transfer certificate, may first be taken by the tax certificate holder for the tax period for which it was issued, for the tax period in which it was issued, or in any tax period during the time a business is required to maintain the project at a location in this State, subject to the carryforward provisions of this section. The tax credit transfer certificate holder may transfer the tax credit amount on or after the date of issuance for use by the transferee in the tax period for which it was issued, in the tax period for which it was issued, or in any of the next successive tax periods, subject to the carryforward provisions of this section. The tax certificate holder or transferee may first use the credit against tax liabilities in the tax period in which it was issued or in a succeeding tax period, as authorized in this paragraph, subject to the carryforward provisions in this section, without the need to amend the return for the year for which the credit was issued.

f. (1) The value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, approved by the director and the authority pursuant to subsection a. of this section and pursuant to subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), and except as provided in section 98 of P.L.2020, c.156 (C.34:1B-362), to taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies, shall not exceed a cumulative total of $100,000,000 in fiscal year 2019 and in each fiscal year thereafter prior to fiscal year 2050 to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5). In addition to the limitation on the value of tax credits approved by the director for New Jersey film-lease production companies and the limitation on the value of tax credits approved by the director for other taxpayers imposed by this paragraph, and except as provided in section 98 of P.L.2020, c.156 (C.34:1B-362), the value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, approved by the director and the authority pursuant to subsection a. of this section and pursuant to subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) to New Jersey studio partners shall not exceed a cumulative total of $100,000,000 in fiscal year 2021 and in each fiscal year thereafter prior to fiscal year 2024, and shall not exceed a cumulative total of $150,000,000 in fiscal year 2024 and in each fiscal year thereafter prior to fiscal year 2050, to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. Beginning in fiscal year 2023, in addition to the cumulative total tax credits made available for New Jersey studio partners pursuant to this paragraph and subsection d. of section 98 of P.L.2020, c.156 (C.34:1B-362), up to an additional $400,000,000 may be made available annually, in the discretion of the authority, to New Jersey studio partners for the award of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, pursuant to subsection a. of this section and subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), from the funds made available pursuant to subparagraph (i) of paragraph (1) of subsection b. of section 98 of P.L.2020, c.156 (C.34:1B-362). In addition to the limitation on the value of tax credits approved by the director for New Jersey studio partners and the limitation on the value of tax credits approved by the director for other taxpayers imposed by this paragraph, and except as provided in section 98 of P.L.2020, c.156 (C.34:1B-362), the value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, approved by the director and the authority pursuant to subsection a. of this section and pursuant to subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) to New Jersey film-lease production companies shall not exceed a cumulative total of $100,000,000 in fiscal year 2021 and in each fiscal year thereafter prior to fiscal year 2024, and shall not exceed a cumulative total of $150,000,000 in fiscal year 2024 and in each fiscal year thereafter prior to fiscal year 2050, to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. Beginning in fiscal year 2023, in addition to the cumulative total tax credits made available for New Jersey film-lease production companies pursuant to this paragraph and subsection d. of section 98 of P.L.2020, c.156 (C.34:1B-362), up to an additional $250,000,000 may be made available annually, in the discretion of the authority, to New Jersey film-lease production companies for the award of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, pursuant to subsection a. of this section and subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), from the funds made available pursuant to subparagraph (i) of paragraph (1) of subsection b. of section 98 of P.L.2020, c.156 (C.34:1B-362). Approvals made to New Jersey studio partners and New Jersey film-lease production companies shall be subject to award agreements with the authority detailing obligations of the awardee and outcomes relating to events of default, including, but not limited to, recapture, forfeiture, and termination, except that in the event of a recapture of tax credits, the tax credits shall only be recaptured from the initial recipient of the tax credits, not the purchaser or assignee of a tax credit transfer certificate. Notwithstanding any provision of this subsection or other law to the contrary, if a film production company designated as a New Jersey studio partner ceases to qualify for its designation as a New Jersey film studio partner and applies for designation as a New Jersey film-lease partner facility, the authority shall, upon the issuance of the designation as a New Jersey film-lease partner facility to the applicant, reduce by one the number of New Jersey film-lease partner facilities. However, this limitation shall not apply to production facilities, or portions thereof, owned, built, leased, or operated by a film production company designated as a New Jersey studio partner. Award agreements between the authority and New Jersey studio partners shall include a requirement for each New Jersey studio partner to occupy the production facility developed, purchased, or leased as a condition of designation as a New Jersey studio partner for the duration of the commitment period. If a New Jersey studio partner fails to occupy the production facility developed, purchased, or leased as a condition of designation as a New Jersey studio partner for the duration of the commitment period or otherwise fails to satisfy the conditions for designation as a New Jersey studio partner, except for the failure to occupy the production facility for any reason outside the control of the New Jersey studio partner, subject to any rules the authority may determine necessary to implement this provision, the authority may recapture the portion of the tax credit that was only available to the taxpayer by virtue of the taxpayer's designation as a New Jersey studio partner, and all films for which an initial approval has been given, but for which the authority has not approved final documentation, shall be reduced to eliminate the portion of the tax credits only available by virtue of such designation. Notwithstanding any law, regulation, or rule to the contrary, in the event of a recapture of tax credits, the tax credits shall only be recaptured from the initial recipient of the tax credits, not the purchaser or assignee of a tax credit transfer certificate. The authority shall establish a non-binding, administrative pre-certification process for potentially eligible projects.

If the cumulative total amount of tax credits, and tax credit transfer certificates, allowed to taxpayers for taxable years or privilege periods commencing during a single fiscal year under subsection a. of this section and subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit or tax credit transfer certificate amount for that reason shall have their applications approved by the authority, provided the application otherwise satisfies the requirements of this section, and shall be allowed the amount of tax credit or tax credit transfer certificate on the first day of the next succeeding fiscal year in which tax credits and tax credit transfer certificates under subsection a. of this section and subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) are not in excess of the amount of credits available.

Notwithstanding any provision of this paragraph to the contrary, for any fiscal year in which the amount of tax credits approved to New Jersey studio partners, New Jersey film-lease production companies, or taxpayers other than New Jersey studio partners and New Jersey film-lease production companies pursuant to this paragraph is less than the cumulative total amount of tax credits permitted to be approved to each such category in that fiscal year, the authority shall certify the amount of the remaining tax credits available for approval to each such category in that fiscal year, and shall increase the cumulative total amount of tax credits permitted to be approved for New Jersey studio partners, New Jersey film-lease production companies, or taxpayers other than New Jersey studio partners and New Jersey film-lease production companies in the subsequent fiscal year by the certified amount remaining from the prior fiscal year. The authority shall also certify, for each fiscal year, the amount of tax credits that were previously approved, but that the taxpayer is not able to redeem or transfer to another taxpayer under this section, and shall increase the cumulative total amount of tax credits permitted to be approved for New Jersey studio partners, New Jersey film-lease production companies, or taxpayers other than New Jersey studio partners and New Jersey film-lease production companies in the subsequent fiscal year by the amount of tax credits previously approved for each such category, but not subject to redemption or transfer. Notwithstanding any provision of this paragraph to the contrary, beginning in fiscal year 2028, if the amount of tax credits approved to taxpayers other than New Jersey studio partners and New Jersey film-lease production companies pursuant to this paragraph is less than the cumulative total amount of tax credits permitted to be approved to taxpayers other than New Jersey studio partners and New Jersey film-lease production companies in that fiscal year, the authority shall certify the amount of the remaining tax credits available for approval in that fiscal year, which certified amount shall not exceed $100,000,000 in any fiscal year, and shall increase the cumulative total amount of tax credits permitted to be approved for New Jersey studio partners pursuant to subsection a. of this section and subsection a. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) in the next subsequent fiscal year by the certified amount remaining for taxpayers other than New Jersey studio partners and New Jersey film-lease production companies from the prior fiscal year. If the certified amount remaining from the prior fiscal year is less than $100,000,000, then, in addition to the tax credits remaining from the prior fiscal year, the difference between $100,000,000 and the certified amount shall be made available to New Jersey studio partners, first from any funds available pursuant to subparagraph (f) of paragraph (1) of subsection b. of section 98 of P.L.2020, c.156 (C.34:1B-362), not including tax credits made available for transformative projects, and then, if there are insufficient funds available pursuant to subparagraph (f) of paragraph (1) of subsection b. of section 98 of P.L.2020, c.156 (C.34:1B-362), from the tax credits allocated in the current fiscal year to taxpayers other than New Jersey studio partners and New Jersey film-lease production companies.

(2) The value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, approved by the authority and the director pursuant to subsection b. of this section and pursuant to subsection b. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), shall not exceed a cumulative total of $30,000,000 in fiscal year 2019 and in each fiscal year thereafter prior to fiscal year 2050 to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).

If the total amount of tax credits and tax credit transfer certificates allowed to taxpayers for taxable years or privilege periods commencing during a single fiscal year under subsection b. of this section and subsection b. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) exceeds the amount of tax credits available in that year, then taxpayers who have first applied for and have not been allowed a tax credit or tax credit transfer certificate amount for that reason shall have their applications approved by the authority, provided the application otherwise satisfies the requirements of this section, and shall be allowed the amount of tax credit or tax credit transfer certificate on the first day of the next succeeding fiscal year in which tax credits and tax credit transfer certificates under subsection b. of this section and subsection b. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b) are not in excess of the amount of credits available.

Beginning in the fiscal year beginning July 1, 2024, in addition to the total amount of tax credits and tax credit transfer certificates allowed to taxpayers for privilege periods or taxable years commencing during a single fiscal year under subsection b. of this section and subsection b. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), up to an additional $100,000,000 may be made available, in the discretion of the authority, for the award of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, pursuant to subsection b. of this section and subsection b. of section 1 of P.L.2018, c.56 (C.54:10A-5.39b), from the funds made available to taxpayers other than New Jersey studio partners and New Jersey film-lease production companies pursuant to paragraph (3) of subsection d. of section 98 of P.L.2020, c.156 (C.34:1B-362).

Notwithstanding any provision of this paragraph to the contrary, for any fiscal year in which the amount of tax credits approved pursuant to this paragraph is less than the cumulative total amount of tax credits permitted to be approved in that fiscal year, the authority shall certify the amount of the remaining tax credits available for approval in that fiscal year, and shall increase the cumulative total amount of tax credits permitted to be approved in the subsequent fiscal year by the certified amount remaining from the prior fiscal year. The authority shall also certify, for each fiscal year, the amount of tax credits that were previously approved, but that the taxpayer is not able to redeem or transfer to another taxpayer under this section, and shall increase the cumulative total amount of tax credits permitted to be approved in the subsequent fiscal year by the amount of tax credits previously approved, but not subject to redemption or transfer.

g. A taxpayer shall submit to the authority and the director a report prepared by an independent certified public accountant licensed in this State to verify the taxpayer's tax credit claim following the completion of the production. A New Jersey studio partner that makes deferred compensation payments based on work or services provided on a production may file a supplemental report prepared by an independent certified public accountant, pursuant to agreed-upon procedures prescribed by the authority and the director, no later than four years after the date on which the production concludes. The deferred compensation payments, including deferred compensation payments made directly to a bona fide labor union, shall constitute qualified film production expenses as if the expenses were incurred at the time of production, provided there are credits available and subject to the authority's review. The report shall be prepared by the independent certified public accountant pursuant to agreed-upon procedures prescribed by the authority and the director, and shall include such information and documentation as shall be determined to be necessary by the authority and the director to substantiate the qualified film production expenses or the qualified digital media content production expenses of the taxpayer. A single report with attachments deemed necessary by the authority shall be submitted electronically. Upon receipt of the report, the authority and the director shall review the findings of the independent certified public accountant's report, and shall make a determination as to the qualified film production expenses or the qualified digital media content production expenses of the taxpayer. The authority's and the director's review shall include, but shall not be limited to: a review of all non-payroll qualified film production expense items and non-payroll digital media content production expense items over $20,000; a review of 100 randomly selected non-payroll qualified film production expense items and non-payroll digital media content production expense items that are greater than $2,500, but less than $20,000; a review of 100 randomly selected non-payroll qualified film production expense items and non-payroll digital media content production expense items that are less than $2,500; a review of the qualified wages for the 15 employees, independent contractors, or loan-out companies with the highest qualified wages; and a review of the qualified wages for 35 randomly selected employees, independent contractors, or loan-out companies with qualified wages other than the 15 employees, independent contractors, or loan-out companies with the highest qualified wages. The taxpayer's qualified film production expenses and digital media content production expenses shall be adjusted based on any discrepancies identified for the reviewed non-payroll qualified film production expense items, non-payroll digital media content production expense items, and qualified wages. The taxpayer's qualified film production expenses and digital media content production expenses also shall be adjusted based on the projection of any discrepancies identified based on the review of randomly selected expense items or wages pursuant to this subsection to the extent that the discrepancies exceed one percent of the total reviewed non-payroll qualified film production expense items, non-payroll digital media content production expense items, or qualified wages. The determination shall be provided in writing to the taxpayer, and a copy of the written determination shall be included in the filing of a return that includes a claim for a tax credit allowed pursuant to this section.

h. A taxpayer shall withhold from each payment to a loan-out company, to an independent contractor, or to a homeowner for the use of a personal residence an amount equal to 6.37 percent of the payment otherwise due. The amounts withheld shall be deemed to be withholding of liability pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the taxpayer shall be deemed to have the rights, duties, and responsibilities of an employer pursuant to chapter 7 of Title 54A of the New Jersey Statutes. The director shall allocate the amounts withheld for a taxable year to the accounts of the individuals who are employees of a loan-out company in proportion to the employee's payment by the loan-out company in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State during the taxable year. A loan-out company that reports its payments to employees in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State during a taxable year shall be relieved of its duties and responsibilities as an employer pursuant to chapter 7 of Title 54A of the New Jersey Statutes for the taxable year for any payments relating to the payments on which the taxpayer withheld. Notwithstanding any provision of this section to the contrary, qualified film production expenses and qualified digital media content production expenses shall include any payments made by the taxpayer to a loan-out company for services performed in New Jersey by individuals who are employees of the loan-out company and whose wages and salaries are subject to withholding, but not subject to tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state. Notwithstanding any provision of this section to the contrary, deferred compensation payments made directly to a bona fide labor union on behalf of an individual that performed services on a production that tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., was not withheld shall constitute qualified film production expenses, provided that the payment otherwise satisfies the requirements of this section.

i. As used in this section:

"Authority" means the New Jersey Economic Development Authority.

"Business assistance or incentive" means "business assistance or incentive" as that term is defined pursuant to section 1 of P.L.2007, c.101 (C.54:50-39).

"Commission" means the Motion Picture and Television Development Commission.

"Commitment period" means, for New Jersey studio partners, the period beginning with the commencement of the eligibility period and continuing for a minimum of 10 years following:

(1) in the case of a taxpayer developing or purchasing a production facility, the issuance of a temporary certificate of occupancy for the production facility developed or purchased as a condition of designation as a New Jersey studio partner; or

(2) in the case of a taxpayer leasing a production facility, commencement of the lease term for the production facility leased as a condition of designation as a New Jersey studio partner.

"Digital media content" means the following digitally formatted and distributed content, which content includes data or information created in analog form but reformatted in digital form: animation; video games; visual effects; interactive media, including virtual, augmented, or mixed reality; content containing text, graphics, or photographs; sound; and video. "Digital media content" shall not mean content offerings generated by the end user (including postings on electronic bulletin boards and chat rooms); content offerings comprised primarily of local news, events, weather, or local market reports; public service content; electronic commerce platforms (such as retail and wholesale websites); websites or content offerings that contain obscene material as defined pursuant to N.J.S.2C:34-2 and N.J.S.2C:34-3; websites or content that are produced or maintained primarily for private, industrial, corporate, or institutional purposes; or digital media content acquired or licensed by the taxpayer for distribution or incorporation into the taxpayer's digital media content.

"Eligibility period" means, with respect to New Jersey studio partners, the period in which a New Jersey studio partner may claim a tax credit for qualified film production expenses, including expenses that would not constitute qualified film production expenses but for the taxpayer's designation as a New Jersey studio partner, beginning the earlier of the commencement of the principal photography for the New Jersey studio partner's initial film in New Jersey or, in the case of a taxpayer developing or purchasing a production facility, at the issuance of a temporary certificate of occupancy for the production facility developed or purchased as a condition of designation as a New Jersey studio partner and, in the case of a taxpayer leasing a production facility, at the commencement of the lease term for the production facility leased as a condition of designation as a New Jersey studio partner, and extending thereafter for a term of not less than 10 years.

"Film" means a feature film, a television series, or a television show of 22 minutes or more in length, intended for a national audience, or a television series or a television show of 22 minutes or more in length intended for a national or regional audience, including, but not limited to, a game show, award show, talk show, competition or variety show filmed before a live audience, or other gala event filmed and produced at a nonprofit arts and cultural venue receiving State funding. "Film" shall not include a production featuring news, current events, weather, and market reports or public programming; a sports event; a production that solicits funds; a production containing obscene material as defined under N.J.S.2C:34-2 and N.J.S.2C:34-3; a production primarily for private, industrial, corporate, or institutional purposes; or a reality show, except if the production company has obtained a minimum four-episode order from, and is commissioned and scheduled to premiere on, a major linear network or streaming service. Notwithstanding any provision of this section to the contrary, for a New Jersey studio partner, "film" shall include an ongoing television production that relocated to New Jersey and features news or current events, which may include sports-themed current events programming, but shall not include a sports event, provided that the ongoing television production relocates to a facility that is leased or owned by the New Jersey studio partner and for which facility such New Jersey studio partner received its designation as a New Jersey studio partner. "Film" shall not include an award show or other gala event that is not filmed and produced at a nonprofit arts and cultural venue receiving State funding.

"Full-time or full-time equivalent employee" means an individual employed by the taxpayer for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time or full-time equivalent employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or whose wages are not subject to tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state, regardless of whether the individual is a resident or nonresident taxpayer, or who is a partner of a taxpayer, who works for the partnership for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time or full-time equivalent employment, and whose distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or any combination thereof, is subject to the payment of estimated taxes, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. "Full-time or full-time equivalent employee" shall not include an individual who works as an independent contractor or on a consulting basis for the taxpayer.

"Highly compensated individual" means an individual who directly or indirectly receives compensation in excess of $750,000 for the performance of services used directly in a production. An individual receives compensation indirectly when the taxpayer pays a loan-out company that, in turn, pays the individual for the performance of services.

"Incurred in New Jersey" means, for any application submitted after the effective date of P.L.2018, c.56 (C.54:10A-5.39b et al.), pursuant to which a tax credit has not been allowed prior to the effective date of P.L.2021, c.160, service performed within New Jersey and tangible personal property used or consumed in New Jersey. A service is performed in New Jersey to the extent that the individual performing the service is physically located in New Jersey while performing the service. Notwithstanding where the property is delivered or acquired, rented tangible property is used or consumed in New Jersey to the extent that the property is located in New Jersey during its use or consumption and is rented from a vendor authorized to do business in New Jersey and the film production company provides to the authority the vendor's information in a form and manner prescribed by the authority. Purchased tangible property is not used and consumed in New Jersey unless it is purchased from a vendor authorized to do business in New Jersey and is delivered to or acquired within New Jersey, provided, however, that if a production is also located in another jurisdiction, the purchased tangible property is used and consumed in New Jersey, to the extent that the property is located in New Jersey during its use or consumption, if the acquisition and delivery of purchased tangible property is located in either New Jersey or another jurisdiction where the production takes place. Payment made to a homeowner for the use of a personal residence located in the State for filming shall be deemed an expense incurred in New Jersey notwithstanding the fact that such homeowner is not a vendor authorized to do business in New Jersey, provided the taxpayer has made the withholding required by subsection h. of this section.

"Independent contractor" means an individual treated as an independent contractor for federal and State tax purposes who is contracted with by the taxpayer for the performance of services used directly in a production.

"Loan-out company" means, for applications submitted prior to the effective date of P.L.2024, c.33, a personal service corporation or other entity with which a taxpayer contracts for the provision of specified individual personnel, such as artists, crew, actors, producers, or directors for the performance of services used directly in a production and, for applications submitted on or after the effective date of P.L.2024, c.33, a personal service corporation or other entity, authorized to do business in New Jersey, that is contracted with by the taxpayer to provide specified individual personnel, such as artists, crew, actors, producers, or directors for the performance of services used directly in a production. "Loan-out company" shall not include entities contracted with by the taxpayer to provide goods or ancillary contractor services such as catering, construction, trailers, equipment, or transportation.

"New Jersey film-lease partner facility" means:

(1) (a) a production facility in New Jersey whose owner or developer has made the commitment to build, lease, or operate a production facility of 250,000 square feet or more, including a sound stage and production support space, such as production offices, mill space, or a backlot, for a period of five or more successive years, as evidenced by site plan approval or an executed redevelopment agreement with a governmental entity for the purpose of developing a production facility of 250,000 square feet or more;

(b) a production facility built, leased, or operated by a production company designated as a New Jersey studio partner and which the New Jersey studio partner no longer occupies; or

(c) a portion of a production facility owned by a New Jersey studio partner that is in excess of the space being utilized by the New Jersey studio partner, provided the spaces utilized and unutilized by the New Jersey studio partner both exceed 250,000 square feet.

(2) A film production company that executes at least a 10-year lease for 250,000 square feet or more from a New Jersey film-lease partner facility shall be eligible to be designated as a New Jersey studio partner, provided the film production company otherwise complies with the eligibility requirements of the program.

(3) Except for a production facility, or portion thereof, owned, built, leased, or operated by a film production company designated as a New Jersey studio partner by the authority on or before the 181st day next following the effective date of P.L.2023, c.97 (C.34:1B-4.2 et al.), in order for a production facility to be designated as a New Jersey film-lease partner facility, the owner or developer shall accept the acquisition by the authority, at the authority's discretion, of equity in the production facility, on commercially reasonable and customary terms and conditions determined by the authority and the New Jersey film-lease partner facility. A film production facility may receive its film-lease partner facility designation prior to executing an equity agreement with the authority, provided final approval of such agreement occurs on or before the date on which production commences at the facility.

(4) No more than three New Jersey production facilities may be designated as a New Jersey film-lease partner facility. However, this limitation shall not apply to production facilities, or portions thereof, owned, built, leased, or operated by a film production company designated as a New Jersey studio partner. Notwithstanding any law to the contrary, the authority may revoke the designation of a New Jersey film-lease partner facility, and may recapture solely from the film-lease production company or film-lease post-production company that portion of the tax credits that was available to the taxpayer due to its designation as a New Jersey film-lease partner facility, if a New Jersey film-lease partner facility fails to operate the production facility developed, leased, or purchased as a condition of designation as a New Jersey film-lease partner facility, or otherwise fails to satisfy the conditions for designation as a New Jersey film-lease partner facility, for: a period of at least five years following the year in which a production facility is designated a New Jersey film-lease partner facility; or the duration of any lease of the New Jersey film-lease partner facility by a New Jersey film-lease production company or New Jersey film-lease post-production company that is required to have a term not less than three years of occupancy and include at least 36,000 square feet of gross rentable space .

"New Jersey film-lease post-production company" means a taxpayer, including any taxpayer that is a member of a combined group pursuant to section 23 of P.L.2018, c.48 (C.54:10A-4.11) or any other entity in which the New Jersey film-lease post-production company has a material ownership interest and a material operational role in the production, that otherwise complies with the eligibility requirements of the Film and Digital Media Tax Credit Program, has made a commitment to lease or otherwise occupy production space in a New Jersey film-lease partner facility, and satisfies the criteria of paragraph (3) of subsection b. of this section. If a New Jersey film-lease partner facility has not yet received a temporary or final certificate of occupancy, a New Jersey film-lease post-production company shall have entered into a lease or sublease with the owner or developer of a New Jersey film-lease partner facility, which lease or sublease shall be for not less than three years of occupancy of the New Jersey film-lease partner facility and include at least 36,000 square feet of gross rentable space. For purposes of satisfying the requirements of subparagraph (a) of paragraph (3) of subsection b. of this section, a New Jersey film-lease post-production company may include in an application the qualified digital media content production expenses incurred for post-production, including visual effects activities that are performed by the New Jersey film-lease post-production company or by a business entity in which the New Jersey film-lease post-production company has an ownership interest of at least 51 percent.

In the event that the authority determines that a New Jersey film-lease post-production company has failed to meet the qualifications of a New Jersey film-lease post-production company or otherwise comply with the provisions of this section, except for the failure to occupy the New Jersey film-lease partner facility for any reason outside the control of the New Jersey film-lease post-production company, subject to any rules the authority may determine necessary to implement this provision, the authority may recapture solely from that film production company the portion of any tax credits that had been awarded to that film production company that was only available to the film production company by virtue of the film production company's designation as a New Jersey film-lease post-production company, except that the tax credits shall not be recaptured from the purchaser or assignee of a tax credit transfer certificate, and all films for which an initial approval has been given, but for which the authority has not approved final documentation, shall be reduced to eliminate the portion of the tax credits only available by virtue of such designation.

If a New Jersey film-lease post-production company was issued a film tax credit on the basis of a lease or sublease with a New Jersey film-lease partner facility before that facility receives a temporary or final certificate of occupancy, and the New Jersey film-lease post-production company fails to meet the qualifications of a New Jersey film-lease post-production company or otherwise comply with the applicable provisions in the definition of New Jersey film-lease post-production company, including, but not limited to, the failure to occupy the required amount of space at a New Jersey film-lease production facility for the required time, the authority shall not recapture or reduce the portion of any tax credits available to the taxpayer only by virtue of such designation as a New Jersey film-lease post-production company, including, but not limited to, tax credits awarded for any film production for which an initial application was submitted to and deemed complete by the authority, within one year of the date of the New Jersey film-lease post-production company's lease with the New Jersey film-lease production facility, which the authority shall extend for one additional year if the New Jersey film-lease production facility commences construction as evidenced by the issuance of a building permit within one year of the date of the New Jersey film-lease post-production company's lease with the New Jersey film-lease production facility.

"New Jersey film-lease production company" means a taxpayer, including any taxpayer that is a member of a combined group under section 23 of P.L.2018, c.48 (C.54:10A-4.11) or any other entity, including a fund, in which the film-lease production company has a material ownership interest and has oversight of operations of the entity, as demonstrated by the control of at least one board of director position or other management responsibilities, or has a material operational role in the production, that otherwise complies with the eligibility requirements of the Film and Digital Media Tax Credit Program and has made a commitment to lease or otherwise occupy production space in a New Jersey film-lease partner facility and who will shoot at least 50 percent of the total principal photography shoot days of the project within New Jersey. In addition to the forgoing, if a New Jersey film-lease partner facility has received a temporary or final certificate of occupancy, a film production company shall satisfy one of the following two criteria: (1) the film production company shoots at least 50 percent of the total principal photography shoot days of the project within New Jersey at the New Jersey film-lease partner facility; or (2) the qualified film production expenses of the project for all services performed and goods used or consumed at the New Jersey film-lease partner facility and payments made for the use of the New Jersey film-lease partner facility equal or exceed 33 percent of the total qualified film production expenses of the project. In addition to the forgoing, if a New Jersey film-lease partner facility has not yet received a temporary or final certificate of occupancy, a film production company shall have entered into a lease or sublease with the owner or developer of a New Jersey film-lease partner facility, which lease or sublease is for not less than three years of occupancy of the New Jersey film-lease partner facility and includes at least 36,000 square feet of soundstage space, and the film production company shall have executed a contract with the owner or developer of the New Jersey film-lease partner facility to provide production services for films produced by the film production company in New Jersey prior to the New Jersey film-lease partner facility's receipt of a temporary or final certificate of occupancy. A lease of not less than three years described in this definition of New Jersey film-lease production company shall satisfy the requirements for a lease of not less than three years described in the definition of New Jersey film-lease post-production company. A television series produced by a New Jersey film-lease production company that satisfies the three-year lease requirements under this paragraph and that commences principal photography in New Jersey prior to the New Jersey film-lease partner facility's receipt of a temporary or final certificate of occupancy shall remain eligible to receive the tax credits only available to the film production company by virtue of the film production company's designation as a New Jersey film-lease production company, provided that the series continues production in New Jersey, the film production company continues to satisfy the requirements of a New Jersey film-lease production company at least through the conclusion of production of the television series in New Jersey, and the television series continues to satisfy the requirements for a film that commences production prior to the New Jersey film-lease partner facility's receipt of a temporary or final certificate of occupancy. A "New Jersey film-lease production company" may include any other member of a taxpayer's combined group, pursuant to section 23 of P.L.2018, c.48 (C.54:10A-4.11), any other entity in which the New Jersey film-lease production company has a material ownership interest, any other entity in which a fund has a material ownership interest if the film-lease production company is materially owned by the fund, or an unrelated entity principally engaged in the production of a film or other commercial audiovisual product with whom a designated New Jersey film-lease production company contracts to perform film production services on its behalf such that the designated New Jersey film-lease production company: (1) controls such film or product during preproduction, production, and postproduction; or (2) controls distribution rights for the resulting film or other commercial audiovisual product, provided that the New Jersey film-lease production company contracted with the unrelated entity prior to qualified film production expenses being incurred.

In the event the authority determines that a New Jersey film-lease production company has failed to meet the qualifications of a New Jersey film-lease production company or otherwise comply with the provisions of this section, except for the failure to occupy the New Jersey film-lease partner facility for any reason outside the control of the New Jersey film-lease production company, subject to any rules the authority may determine necessary to implement this provision, the authority may recapture solely from that film production company the portion of any tax credits that had been awarded to that film production company that was only available to the film production company by virtue of the film production company's designation as a New Jersey film-lease production company, except that the tax credits shall not be recaptured from the purchaser or assignee of a tax credit transfer certificate, and all films for which an initial approval has been given, but for which the authority has not approved final documentation, shall be reduced to eliminate the portion of the tax credits only available by virtue of such designation.

If a New Jersey film-lease production company was issued a film tax credit on the basis of a lease or sublease with a New Jersey film-lease partner facility before that facility receives a temporary or final certificate of occupancy and the New Jersey film-lease production company fails to meet the qualifications of a New Jersey film-lease production company or otherwise comply with the applicable provisions in the definition of New Jersey film-lease production company, including, but not limited to, the failure to occupy the required amount of space at a New Jersey film-lease production facility for the required time, the authority shall not recapture or reduce the portion of any tax credits available to the taxpayer only by virtue of such designation as a New Jersey film-lease production company, including, but not limited to, tax credits awarded for any film production for which an initial application was submitted to and deemed complete by the authority, within one year of the date of the New Jersey film-lease production company's lease with the New Jersey film-lease production facility, which the authority shall extend for one additional year if the New Jersey film-lease production facility commences construction, as evidenced by the issuance of a building permit, within one year of the date of the New Jersey film-lease production company's lease with the New Jersey film-lease production facility.

"New Jersey studio partner" means a film production company that has made a commitment to produce films or commercial audiovisual products in New Jersey and has developed, purchased, or executed a 10-year contract to lease a production facility of 250,000 square feet or more, or has executed a purchase contract with a governmental authority for the purpose of developing a production facility of 250,000 square feet or more within 48 months from the date of designation as a New Jersey studio partner, provided, however, the board, in its discretion, may extend the time to execute a purchase contract for an additional 12 months. Effective upon designation as a New Jersey studio partner, a film production company shall be eligible for a credit pursuant to this section, provided the film production company otherwise complies with the eligibility requirements of Film and Digital Media Tax Credit Program. In the event the authority determines that a film production company has failed to meet the qualifications of a New Jersey studio partner or otherwise comply with the provisions of this section, except for the failure to occupy a New Jersey film-lease partner facility for any reason outside the control of the New Jersey studio partner, subject to any rules the authority may determine necessary to implement this provision, the authority may rescind the New Jersey studio partner designation and may recapture solely from that film production company the portion of any tax credit that had been awarded to that film production company that was only available to the film production company by virtue of the film production company's designation as a New Jersey studio partner, except that the tax credits shall not be recaptured from the purchaser or assignee of a tax credit transfer certificate, and all films for which an initial approval has been given, but for which the authority has not approved final documentation, shall be reduced to eliminate the portion of the tax credits only available by virtue of such designation. If the failure to occupy the production facility is due to any reason outside the control of the New Jersey studio partner, the authority shall not recapture any tax credits issued to the applicant before the failure to occupy or reduce the portion of the tax credits only available by virtue of such designation for any film productions for which an initial application was initially approved prior to the occurrence of the reason outside the control of the New Jersey studio partner, and the New Jersey studio partner may diligently seek a production facility, during which time the New Jersey studio partner shall maintain its New Jersey studio partner designation and any tax credits issued to the New Jersey studio partner shall not be subject to recapture. The authority shall not reduce the portion of tax credits only available by virtue of such designation and during which time for any films for which an initial application is approved during the time a New Jersey studio partner diligently seeks a production facility.

If a New Jersey studio partner was issued a film tax credit on the basis of a lease or sublease with a New Jersey film-lease partner facility before that facility receives a temporary or final certificate of occupancy and the New Jersey studio partner fails to meet the qualifications of a New Jersey studio partner, including, but not limited to, the failure to occupy the required amount of space at New Jersey film-lease production facility for the required time, the authority shall not recapture or reduce the portion of any tax credits available to the taxpayer only by virtue of such designation as a New Jersey studio partner, including, but not limited to, tax credits awarded for any film production for which an initial application was submitted to and deemed complete by the authority, within one year of the date of the New Jersey studio partner's lease with the New Jersey film-lease production facility, which the authority shall extend for one additional year if the New Jersey film-lease production facility commences construction, as evidenced by the issuance of a building permit, within one year of the date of the New Jersey studio partner's lease with the New Jersey film-lease production facility. A "New Jersey studio partner" may include any other member of a taxpayer's combined group, pursuant to section 23 of P.L.2018, c.48 (C.54:10A-4.11), or an unrelated entity principally engaged in the production of a film or other commercial audiovisual product with whom a designated New Jersey studio partner contracts to perform film production services on its behalf or for its benefit such that the designated New Jersey studio partner: (1) controls such film or product during pre-production, production, and post-production; or (2) controls distribution rights for the resulting film or other commercial audiovisual product, provided that the New Jersey studio partner contracted with the unrelated entity prior to qualified film production expenses being incurred. No more than three film production companies may be designated as a New Jersey studio partner.

"Partnership" means an entity classified as a partnership for federal income tax purposes.

"Post-production costs" means the costs of the phase of production of a film that follows principal photography, in which raw footage is cut and assembled into a finished film with sound synchronization and visual effects.

"Pre-production costs" means the costs of the phase of production of a film that precedes principal photography, in which a detailed schedule and budget for the production is prepared, the script and location is finalized, and contracts with vendors are negotiated.

"Qualified digital media content production expenses" means an expense incurred in New Jersey for the production of digital media content. "Qualified digital media content production expenses" shall include, but not be limited to: the wages and salaries of individuals employed in the production of digital media content on which the tax imposed by the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., has been paid or is due and any wages and salaries of individuals employed in the production of digital media content that are not subject to tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state; the costs of computer software and hardware, data processing, visualization technologies, sound synchronization, editing, and the rental of facilities and equipment; and the costs for post-production, including, but not limited to: editing, sound design, visual effects, animation, music composition, color grading, and mastering. Payment made to a loan-out company or to an independent contractor shall not be deemed a "qualified digital media content production expense" unless the payment is made in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State and the taxpayer has made the withholding required pursuant to subsection h. of this section. For applications submitted prior to the effective date of P.L.2024, c.33, "qualified digital media content production expenses" shall not include expenses incurred in marketing, promotion, advertising digital media, or other costs not directly related to the production of digital media content. For applications submitted after the effective date of P.L.2024, c.33, "qualified digital media content production expenses" shall not include expenses incurred in marketing, promotion, or advertising digital media; costs incurred for the design, maintenance, and hosting of websites; or other costs not directly related to the production of digital media content. Costs related to the acquisition or licensing of digital media content by the taxpayer for distribution or incorporation into the taxpayer's digital media content, or any costs included in an application submitted to the authority, shall not be deemed "qualified digital media content production expenses."

"Qualified film production expenses" means an expense incurred in New Jersey for the production of a film, including pre-production costs and post-production costs incurred in New Jersey. "Qualified film production expenses" shall include, but not be limited to: the wages and salaries of individuals employed in the production of a film on which the tax imposed by the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., has been paid or is due and any wages and salaries of individuals employed in the production of a film that are not subject to tax under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state; and the costs for tangible personal property used, and services performed, directly and exclusively in the production of a film, such as expenditures for film production facilities, props, makeup, wardrobe, film processing, camera, sound recording, set construction, lighting, shooting, editing, and meals. For a New Jersey studio partner or New Jersey film-lease production company that enters into a lease to occupy a New Jersey film-lease partner facility for at least three years, "qualified film production expenses" includes the following expenses incurred in the production of the film, which expenses shall be included in a percentage proportional to the percentage of principal photography shoot days in the State: total production insurance premiums paid to insurance companies doing business in New Jersey, which premiums shall exclude payments for errors and omissions insurance; total out-of-State producer fees, excluding producer fees received for services performed in this State that otherwise qualify as qualified film production expenses; and total rights fees. However, cumulative expenses for production insurance premiums, total out-of-State producer fees, excluding producer fees received for services performed in this State that otherwise qualify as qualified film production expenses, and rights fees shall not exceed seven and one-half percent of the "qualified film production expenses" for any New Jersey studio partner or New Jersey film-lease production company. For purposes of calculating the seven and one-half percent limitation, total out-of-State producer fees and rights fees, script costs, insurance premiums, and excess amounts paid to highly compensated individuals shall be included in the total amount of qualified film production expenses for any New Jersey film-lease production company or New Jersey studio partner. Out-of-State producer fees incurred outside New Jersey shall constitute qualified film production expenses notwithstanding that the tax imposed under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., was not withheld from wages, salaries, or other compensation paid or incurred for such services. For a New Jersey studio partner or New Jersey film-lease production company that enters into a lease to occupy a New Jersey film-lease partner facility for at least three years, "qualified film production expenses" includes: the total script costs of any script written within New Jersey or the product of the total script costs of any script written outside New Jersey and the percentage of the principal photography shoot days in New Jersey relative to the total principal photography shoot days for the film. Notwithstanding the foregoing, for any original application approved by the authority on or after January 1, 2028 for a New Jersey studio partner or New Jersey film-lease production company that enters into a lease to occupy a New Jersey film-lease partner facility for at least three years, "qualified film production expenses" shall include the total script costs of any script written within New Jersey or the product of the total script costs of any script written outside New Jersey and the percentage of the principal photography shoot days in this State relative to the total principal photography shoot days for the film, provided that the taxpayer satisfies two of the following criteria as certified by an independent certified public accountant licensed in this State and according to such procedures as the authority may establish: the taxpayer establishes a writer's skills development program with a college, including a community college, apprentice program, university, vocational school, or high school in this State; the taxpayer opens a writer's room in this State at a production facility where writing support services are provided at least in part for the film; a writer on the film is a resident of this State for a period including at least one year prior to the commencement of principal photography for the film in this State; the taxpayer hires one or more researchers that are residents of this State to perform research services in this State for the development of a script or scripts for a film; or any alternative criteria as the authority shall provide. Payment made to a loan-out company or to an independent contractor shall not be deemed a "qualified film production expense" unless the payment is made in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State and the taxpayer has made the withholding required by subsection h. of this section. Payment made to a homeowner, who is otherwise not a vendor authorized to do business in New Jersey, for the use of a personal residence for filming shall not be deemed a "qualified film production expense" unless the taxpayer has made the withholding required by subsection h. of this section. For the purposes of this definition, wages and salaries of individuals employed in the production of a film shall include deferred compensation, including advances on deferred compensation, incurred by a New Jersey studio partner, provided the New Jersey studio partner files a supplemental report prepared by an independent certified public accountant, pursuant to agreed-upon procedures prescribed by the authority and the director, no later than four years after the date on which the production concludes. Script costs written outside of New Jersey shall constitute qualified film production expenses notwithstanding that the tax imposed under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., was not withheld from wages, salaries, or other compensation paid or incurred for the writing of such script or scripts. "Qualified film production expenses" shall not include: expenses incurred in marketing or advertising a film; expenses for a story, script, or scenario to be used for a film, except that qualified film production expenses may include script costs, including the cost of script purchase, for a New Jersey studio partner or New Jersey film-lease production company; and payment in excess of $750,000 to a highly compensated individual for wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, except as follows:

(1) for a New Jersey studio partner that incurs less than $25,000,000 in qualified film production expenses in the State, which shall be determined by including the additional amount provided in this paragraph, in excess of amounts paid to highly compensated individuals, an additional amount, not to exceed $18,000,000, of the wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, shall constitute qualified film production expenses;

(2) (Deleted by amendment, P.L.2023, c.97)

(3) (Deleted by amendment, P.L.2023, c.97)

(4) (a) for a New Jersey studio partner that incurs $25,000,000 or more in qualified film production expenses in the State, which shall be determined by including the additional amount provided in this paragraph, in excess of amounts paid to highly compensated individuals, an additional amount, not to exceed $72,000,000, of the wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, shall constitute qualified film production expenses; and

(b) for a New Jersey studio partner that incurs $125,000,000 or more in qualified film production expenses in the State, which shall be determined by including the additional amount provided in this paragraph, for the production of a film, the following shall constitute qualified film production expenses:

(i) amounts in excess of the amounts paid to highly compensated individuals, an additional amount, not to exceed $72,000,000, of the wages and salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines;

(ii) amounts paid for deferred compensation, including, but not limited to, advances on deferred compensation; and

(iii) amounts paid for script costs;

(5) for a New Jersey film-lease production company that incurs less than $50,000,000 in qualified film production expenses in the State, which shall be determined by including the additional amount provided in this paragraph, in excess of amounts paid to highly compensated individuals, an additional amount, not to exceed $15,000,000, of the wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, shall constitute qualified film production expenses; and

(6) for a New Jersey film-lease production company that incurs $50,000,000 or more in qualified film production expenses in the State, which shall be determined by including the additional amount provided in this paragraph, in excess of amounts paid to highly compensated individuals, an additional amount, not to exceed $60,000,000, of the wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, shall constitute qualified film production expenses.

"Qualified post-production company" means a corporation, partnership, limited liability company, or other entity engaged in post-production, including visual effects activities on a film or films described in this section, including, but not limited to, a film or films that do not satisfy the requirements of subparagraph (a) of paragraph (1) of subsection a. of this section.

“Reason outside the control” means an event or action related to the production facility, which the New Jersey film-lease post-production company, New Jersey film-lease production company, or New Jersey studio partner occupies, beyond the approved applicant’s control that occurred without its fault or negligence, and for which the approved applicant has made good faith efforts to prevent, avoid, mitigate, or overcome the event or action, provided that the approved applicant proceeds in good faith and with due diligence to fulfill its obligations pursuant to the Film and Digital Media Tax Credit Program, to the extent possible. An event or action that is a “reason outside the control” of an approved applicant shall include, but shall not be limited to: the failure of an approved applicant’s landlord to timely deliver a temporary or final certificate of occupancy or operate the production facility, or the landlord’s material breach of the production facility lease with the approved applicant.

"Total digital media content production expenses" means costs for services performed and property used or consumed in the production of digital media content.

"Total film production expenses" means costs for services performed and tangible personal property used or consumed in the production of a film.

§ 54A:4-13 Credit against tax due.

4. a. (1) A taxpayer, upon approval of the taxpayer's application therefor by the New Jersey Economic Development Authority, and in consultation with the director, shall be allowed a credit against the tax otherwise due for the taxable year in the taxable year in which the taxpayer applied, under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 35 percent of the qualified investment made by the taxpayer in a New Jersey emerging technology business, in a New Jersey emerging technology business holding company that makes a verified transfer of funds to a New Jersey emerging technology business, or in a qualified venture fund; provided, however, a taxpayer may be allowed a tax credit in an amount equal to 40 percent of the qualified investment if the taxpayer satisfies one of the requirements set forth in paragraph (2) of this subsection. The value of tax credits allowed to a taxpayer pursuant to this section shall not exceed $500,000 for each qualified investment made by the taxpayer.

(2) Subject to the limits established in paragraph (1) of this subsection, the New Jersey Economic Development Authority, in consultation with the director, shall increase the amount of a tax credit allowed pursuant to this section by five percent if the taxpayer makes a qualified investment in a New Jersey emerging technology business, in a New Jersey emerging technology business holding company that makes a verified transfer of funds to a New Jersey emerging technology business, or in a qualified venture fund, if the New Jersey emerging technology business is either located in a qualified opportunity zone pursuant to 26 U.S.C. s.1400Z-1, or a low-income community as defined in subparagraph (e) of 26 U.S.C. s.45D; or

certified by the State as a minority business or a women's business pursuant to P.L.1986, c.195 (C.52:27H-21.17 et seq.) and, in the case of a qualified venture fund, if the qualified venture fund commits by contract to invest 50 percent of its funds in diverse entrepreneurs.

b. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax liability otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7, provided, however, that subsection (f) of N.J.S.54A:9-7 shall not apply.

c. (1) A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year. For the purposes of subsection b. of this section, the amount of tax liability that would be otherwise due of a taxpayer is that proportion of the total liability of the taxpayer that the taxpayer's share of the partnership income or gain included in gross income bears to the total gross income of the taxpayer.

(2) The credit for a corporation that has made a valid election as a New Jersey S corporation pursuant to section 3 of P.L.1993, c.173 (C.54:10A-5.22) may be applied by the shareholders of the S corporation against the tax liability otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., provided that the amount of credit that may be used by a shareholder of the S corporation shall be determined by allocating to each shareholder of the S corporation that proportion of the tax credit of the S corporation that is equal to the shareholder's proportionate share of the S corporation, whether or not distributed, of the total distributive income or gain of the S corporation for its tax period ending with or within the shareholder's tax period, and the credit may be applied by the shareholders against the tax liability otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

d. (1) Except as provided in paragraph (2) of this subsection, the Chief Executive Officer of the New Jersey Economic Development Authority, in consultation with the director, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations that are necessary to implement sections 1 through 3 of P.L.1997, c.349 (C.54:10A-5.28 through 54:10A-5.30) and this section, including, but not limited to: examples of and the determination of qualified investments of which applicants shall provide documentation with their tax credit application, the promulgation of procedures and forms necessary to apply for a credit, provisions for recapture in the event a taxpayer receives a credit on the basis of its commitment to transfer cash to a qualified venture fund and it does not fund its commitment, and provisions for credit applicants to be charged an initial application fee and ongoing service fees to cover the administrative costs related to the credit.

(2) Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Chief Executive Officer of the New Jersey Economic Development Authority may adopt, immediately upon filing with the Office of Administrative Law, rules and regulations that the chief executive officer deems necessary to implement the provisions of this section, as amended by P.L.2025, c.71, which regulations shall be effective for a period not to exceed 365 days from the date of the filing. The chief executive officer shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

(3) The amount of credits approved by the Chief Executive Officer of the New Jersey Economic Development Authority and the Director of the Division of Taxation in the Department of the Treasury, pursuant to subsection a. of this section and pursuant to section 3 of P.L.1997, c.349 (C.54:10A-5.30), shall not exceed a cumulative total of $25,000,000, plus the value of any unused tax benefits from the immediately preceding State fiscal year, as determined pursuant to section 1 of P.L.1997, c.334 (C.34:1B-7.42a), in any calendar year, to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative amount of credits allowed to taxpayers in a calendar year exceeds the amount of credits available in that year, then taxpayers who have first applied for and have not been allowed a credit amount for that reason shall be allowed, in the order in which they have submitted an application, the amount of the tax credit on the first day of the next succeeding calendar year in which tax credits under this section and section 3 of P.L.1997, c.349 (C.54:10A-5.30) are not in excess of the amount of credits available.

e. As used in this section:

"Advanced computing" means a technology used in the designing and developing of computing hardware and software, including innovations in designing the full spectrum of hardware from hand-held calculators to super computers, and peripheral equipment.

"Advanced materials" means materials with engineered properties created through the development of specialized processing and synthesis technology, including ceramics, high value-added metals, electronic materials, composites, polymers, and biomaterials.

"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4). "Biotechnology" means the continually expanding body of fundamental knowledge about the functioning of biological systems from the macro level to the molecular and sub-atomic levels, as well as novel products, services, technologies, and sub-technologies developed as a result of insights gained from research advances which add to that body of fundamental knowledge.

"Carbon footprint reduction technology" means a technology using equipment for the commercial, institutional, and industrial sectors that: increases energy efficiency, develops and delivers renewable or non-carbon-emitting energy technologies, develops innovative carbon emissions abatement with significant carbon emissions reduction potential, or promotes measurable electricity end-use energy efficiency.

"Control," with respect to a corporation, means ownership, directly or indirectly, of stock possessing 80 percent or more of the total combined voting power of all classes of the stock of the corporation entitled to vote; and "control," with respect to a trust, means ownership, directly or indirectly, of 80 percent or more of the beneficial interest in the principal or income of the trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in subsection (c) of section 267 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.267), other than paragraph (3) of subsection (c) of that section.

"Controlled group" means one or more chains of corporations connected through stock ownership with a common parent corporation if stock possessing at least 80 percent of the voting power of all classes of stock of each of the corporations is owned directly or indirectly by one or more of the corporations and the common parent owns directly stock possessing at least 80 percent of the voting power of all classes of stock of at least one of the other corporations.

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Diverse entrepreneur" means a New Jersey-based business that meets the criteria for a minority business or female business set forth in section 3 of P.L.1983, c.482 (C.52:32-19).

"Electronic device technology" means a technology involving microelectronics, semiconductors, electronic equipment and instrumentation, radio frequency, microwave and millimeter electronics, and optical and optic-electrical devices or data and digital communications and imaging devices.

"Information technology" means software publishing, motion picture and video production, television production and post-production services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services, and computer training.

"Life sciences" means the production of medical equipment, ophthalmic goods, medical or dental instruments, diagnostic substances, biopharmaceutical products, or physical and biological research.

"Medical device technology" means a technology involving any medical equipment or product (other than a pharmaceutical product) that has therapeutic value, diagnostic value, or both, and is regulated by the federal Food and Drug Administration.

"Mobile communications technology" means a technology involving the functionality and reliability of the transmission of voice and multimedia data using a communication infrastructure via a computer or a mobile device, that shall include, but not be limited to, smartphones, electronic books and tablets, digital audio players, motor vehicle electronics, home entertainment systems, and other wireless appliances, without having connected to any physical or fixed link.

"New Jersey-based business" means a company with fewer than 150 employees, of whom at least 75 percent are filling a position in New Jersey, that is doing business, employing or owning capital or property, or maintaining an office in this State.

"New Jersey emerging technology business" means a company with fewer than 150 employees, of whom at least 75 percent are filling a position in New Jersey, that is doing business, employing or owning capital or property, or maintaining an office in this State and: has qualified research expenses paid or incurred for research conducted in this State; conducts pilot scale manufacturing in this State; or conducts technology commercialization in this State in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology.

"New Jersey emerging technology business holding company" means any corporation, association, firm, partnership, trust, or other form of business organization, but not a natural person, which directly or indirectly owns, has the power or right to control, or has the power to vote a controlling share of the outstanding voting securities of a corporation or other form of a New Jersey emerging technology business.

"Partnership" means a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on and which is not a trust or estate, a corporation, or a sole proprietorship.

"Pilot scale manufacturing" means design, construction, and testing of preproduction prototypes and models in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology, other than for commercial sale, excluding sales of prototypes or sales for market testing if the total gross receipts, as calculated in the manner provided in section 6 of P.L.1945, c.162 (C.54:10A-6), from the sales of the product, service, or process do not exceed $1,000,000.

"Qualified investment" means the non-refundable transfer of cash to a New Jersey emerging technology business or to a New Jersey emerging technology business holding company by a taxpayer that is not a related person of the New Jersey emerging technology business or the New Jersey emerging technology business holding company, the transfer of which is in connection with either: a transaction between or among the taxpayer and the New Jersey emerging technology business or the New Jersey emerging technology holding company or both in exchange for stock, interests in partnerships or joint ventures, licenses (exclusive or non-exclusive), rights to use technology, marketing rights, warrants, options, or any items similar to those included herein, including, but not limited to, options or rights to acquire any of the items included herein; or a purchase, production, or research agreement between or among the taxpayer and the New Jersey emerging technology business or the New Jersey emerging technology holding company or both. "Qualified investment" also means the non-refundable transfer of cash or irrevocable contractual commitment to transfer cash to a qualified venture fund.

"Qualified research expenses" means qualified research expenses, as defined in section 41 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.41), as in effect on June 30, 1992, in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology.

"Qualified venture fund" means a venture fund required by contract to invest a minimum of 50 percent of its funds in New Jersey-based businesses that the authority, in its sole discretion, based upon the qualified venture fund's investment history, if any, its private placement memorandum and other relevant information, has determined has the capacity to make the minimum investment.

"Related person" means:

a corporation, partnership, association, or trust controlled by the taxpayer;

an individual, corporation, partnership, association, or trust that is in the control of the taxpayer;

a corporation, partnership, association, or trust controlled by an individual, corporation, partnership, association, or trust that is in the control of the taxpayer; or

a member of the same controlled group as the taxpayer.

"Renewable energy technology" means a technology involving the generation of electricity from solar energy; wind energy; wave or tidal action; geothermal energy; the combustion of gas from the anaerobic digestion of food waste and sewage sludge at a biomass generating facility; the combustion of methane gas captured from a landfill; and a fuel cell powered by methanol, ethanol, landfill gas, digestor gas, biomass gas, or other renewable fuel but not powered by a fossil fuel.

"Venture fund" means a partnership, corporation, trust, or limited liability company that invests cash in a business during the early or expansion stages of a business in exchange for an equity stake in the business in which the investment is made. Venture firm may include a venture capital fund, a family office fund, or a corporate investor fund, provided that a professional manager administers the venture firm.

"Verified transfer of funds" means a non-refundable transfer of funds equal to 100 percent of the taxpayer's qualified investment in the New Jersey emerging technology business holding company to a New Jersey emerging technology business by the New Jersey emerging technology business holding company that is accompanied by documentation, as required by the New Jersey Economic Development Authority, which provides proof of a cash transaction originating with a taxpayer and concluding with a New Jersey emerging technology business, provided that the transactions from origin to destination occur within the same taxable year.

The definitions of "advanced computing," "advanced materials," "biotechnology," "carbon footprint reduction technology," "electronic device technology," "information technology," "life sciences," "medical device technology," "mobile communications technology," "New Jersey emerging technology business," "pilot scale manufacturing," and "renewable energy technology" may be modified by regulation to conform to definitions in other programs administered by the authority.

§ 54A:4-14 Short title.

1. This act shall be known and may be cited as the "Wounded Warrior Caregivers Relief Act."

§ 54A:4-15 Veteran care credit for qualified family caregivers; definitions.

2. a. A qualified family caregiver shall be allowed a qualified veteran care credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of the federal veteran disability compensation of a qualified armed service member for which the qualified family caregiver renders care or $675, whichever is less.

b. If two or more qualified family caregivers qualify for the qualified veteran care credit for the same qualified armed service member, the amount of the credit allowed shall be allocated in proportion to each qualified family caregiver's share of total care expenses provided for the taxable year.

c. If the qualified veteran care credit allowed pursuant to this section, together with any other payments, credits, deductions, and adjustments allowed by law, reduces a qualified family caregiver's tax liability otherwise due for the taxable year under N.J.S.54A:1-1 et seq. to zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment of tax in accordance with N.J.S.54A:9-7; provided however, that subsection (f) of that section, concerning the allowance of interest, shall not apply.

d. A qualified family caregiver who is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year may apply for a qualified veteran care credit using an application to be made available by the director. The due date for a qualified veteran care credit application shall coincide with the due date for annual gross income tax returns.

e. As used in this section:

"Qualified armed service member" means an individual who has a disability arising out of service in the active military or naval service of the United States in any war or conflict on or after September 11, 2001, has been honorably discharged or released under conditions other than dishonorable, meets the requirements for total disability ratings for compensation based upon unemployability of the individual as determined by the United States Department of Veterans Affairs, and has resided with the qualified family caregiver in this State for not less than six months of the taxable year.

"Qualified family caregiver" means an individual resident of this State with gross income for the taxable year not in excess of $100,000 if filing jointly, as a head of household, or as a surviving spouse, or not in excess of $50,000 if filing separately or unmarried, who provides care and support to a qualifying armed service member to whom the caregiver is a relative.

"Relative" means an individual related by consanguinity within the third degree by law or blood.

§ 54A:4-16 Tax credit.

6. a. For taxable years beginning on or after January 1, next following the effective date of P.L.2017, c.174 (C.38A:3-51 et al.), a taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to the amount documented annually by the Department of Military and Veterans' Affairs for the Gold Star Family Counseling Program as established pursuant to section 3 of P.L.2017, c.174 (C.38A:3-53).

b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for a taxable year shall be as prescribed by the director.

The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. shall not reduce a taxpayer's New Jersey gross income tax liability to an amount less than zero.

c. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

§ 54A:4-17 Certain credits permitted.

5. a. A resident taxpayer with New Jersey taxable income of $150,000 or less who is allowed a credit for expenses for household and dependent care services for federal income tax purposes pursuant to section 21 of the Internal Revenue Code (26 U.S.C. s.21) shall be allowed a credit against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. The credit shall be in an amount equal to a percentage of the credit allowed the taxpayer for federal income tax purposes for the taxable year, according to the following schedule:

NJ taxable income is: Amount of NJ credit is:

Not over $30,000 50% of federal credit

over $30,000 but not over $60,000 40% of federal credit

over $60,000 but not over $90,000 30% of federal credit

over $90,000 but not over $120,000 20% of federal credit

over $120,000 but not over $150,000 10% of federal credit.

The $150,000 income limit set forth in this subsection shall apply to taxpayers of any filing status.

b. If the amount of the credit allowed pursuant to this section exceeds the amount of gross income tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the amount of excess shall be treated as a refundable overpayment.

c. Married couples shall file a joint return in order to claim the credit provided by this section. A taxpayer eligible to receive a credit pursuant to paragraph (3) or (4) of subsection (e) of section 21 of the federal Internal Revenue Code (26 U.S.C. s.21) shall be eligible for the credit provided by this section, provided the taxpayer satisfies the income limit set forth in subsection a. of this section.

d. In the case of a part-year resident claimant, the amount of the credit allowed pursuant to this section shall be pro-rated, based upon that proportion which the total number of months of the claimant's residency in the taxable year bears to 12 in that period. For this purpose, 15 days or more shall constitute a month.

§ 54A:4-17.1 Child tax credit, income limit.

1. a. A resident taxpayer with New Jersey taxable income of $80,000 or less shall be allowed a credit against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. for each child who has not attained the age of six years as of the close of the taxable year and for which the taxpayer is allowed a deduction under N.J.S.54A:3-1.

The credit shall be in the following amounts:

If the taxable income is: The credit is:

$30,000 or under $1,000

over $30,000 but not over $40,000 $800

over $40,000 but not over $50,000 $600

over $50,000 but not over $60,000 $400

over $60,000 but not over $80,000 $200

The income limit set forth in this section shall apply to taxpayers of any filing status.

b. A taxpayer shall be allowed the credit pursuant to this section whether the taxpayer uses a Social Security number or an Individual Taxpayer Identification Number on their tax forms.

c. If the amount of the credit allowed pursuant to this section exceeds the amount of tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., after all other credits and deductions, the amount of excess shall be treated as a refundable overpayment.

d. To qualify for the credit allowed pursuant to this section, a taxpayer shall file a joint return if the taxpayer is married, except for a taxpayer who files as a head of household or surviving spouse for federal income tax purposes for the taxable year.

e. In the case of a part-year resident, the amount of the credit allowed pursuant to this section shall be pro-rated, based upon that proportion which the total number of months of the taxpayer's residency in the taxable year bears to 12 in that period. For this purpose, 15 days or more shall constitute a month.

f. Any tax credit pursuant to this section shall not be taken into account as income for purposes of determining the eligibility of an individual for benefits or assistance or the amount or extent of benefits or assistance under any State program and, to the extent permitted by federal law, under any State program financed in whole or in part with federal funds.

g. The Division of Taxation shall issue data as part of the annual tax expenditure report, as required by section 1 of P.L.2009, c.189 (C.52:27B-20a) to include the number of taxpayers claiming the New Jersey Child Tax Credit, as well as claimants' income, the number of children benefitting, and the average credit amount per child and per claimant.

§ 54A:4-18 Credit against gross income tax

9. a. The Director of the Division of Taxation in the Department of the Treasury shall allow an employer a credit against the gross income tax imposed pursuant to the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq. in the amount certified by the Commissioner of Labor and Workforce Development as the taxpayer's tax credit amount pursuant to section 6 of P.L.2019, c.32 (C.34:11-56a40). To claim the tax credit amount for a taxable year, the taxpayer shall submit to the director the certificate of credit issued for that taxable year by the commissioner pursuant to section 6 of P.L.2019, c.32 (C.34:11-56a40).

b. An employer shall apply the credit awarded against the employer's liability under the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq. for the taxable year during which the director allows the employer a tax credit pursuant to this section. An employer shall not carry forward an unused credit.

c. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq. The amount of the credit applied under this section against the tax imposed pursuant to the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq. for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero. No tax credit shall be allowed pursuant to this section for any wages and payroll taxes included in the calculation of any other tax credit granted pursuant to a claim made on a tax return filed with the director for a period of time that coincides with the taxable year for which a tax credit authorized pursuant to this section is allowed.

d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the tax credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of the taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.

A taxpayer that is a New Jersey S corporation shall not be allowed the tax credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of a taxpayer in respect of a pro-rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year.

§ 54A:4-19 Credit against tax due under N.J.S.54A:1-1 et seq.

2. a. A taxpayer, upon approval of an application to the department and the director, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.: (1) in an amount not to exceed $5,000 of the qualified start-up costs incurred by the taxpayer during a taxable year commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by the taxpayer or group of taxpayers; or (2) in an amount not to exceed $10,000 of the qualified start-up costs incurred by the taxpayer during a taxable year commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by the taxpayer or group of taxpayers that provides greater opportunities for workers in key industries.

b. No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the taxable year, for which a tax credit authorized pursuant to this section is allowed. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 shall not reduce a taxpayer's tax liability to an amount less than zero.

c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

d. The value of tax credits approved by the department and the director pursuant to subsection a. of this section and pursuant to subsection a. of section 1 of P.L.2019, c.417 (C.54:10A-5.44) shall not exceed a cumulative total of $1,000,000 in fiscal year 2020 and in each fiscal year thereafter to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative total amount of tax credits allowed to taxpayers for taxable years or privilege periods commencing during a single fiscal year under subsection a. of this section and subsection a. of section 1 of P.L.2019, c.417 (C.54:10A-5.44) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit for that reason shall be allowed, in the order in which they have submitted an application, the amount of tax credit on the first day of the next succeeding fiscal year in which tax credits allowed under subsection a. of this section and subsection a. of section 1 of P.L.2019, c.417 (C.54:10A-5.44) are not in excess of the amount of credits available.

e. A taxpayer shall submit to the department and the director a report to verify the qualified start-up costs incurred by the taxpayer associated with the initial year of participation in an apprenticeship program. The report shall include such information as shall be determined necessary by the department and the director to substantiate the qualified start-up costs incurred by the taxpayer.

f. As used in this section:

"Apprenticeship program" means a registered program providing to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticable trade, and: (1) registered by the Office of Apprenticeship of the U.S. Department of Labor and meeting the standards established by that office; or (2) registered by a State apprenticeship agency recognized by the office.

"Department" means the Department of Labor and Workforce Development"

"Key industry" means an industry that makes or could make an important contribution to the economy of the State, which may include, but not be limited to, advanced manufacturing, construction, healthcare, logistics, pharmaceuticals, transportation, tourism, and renewable energy, as defined by the Department of Labor and Workforce Development in accordance with regulations adopted pursuant to P.L.2019, c.417 (C.54:10A-5.44 et al.).

"Qualified start-up costs" means the ordinary and necessary costs to start an apprenticeship program in that industry and occupation, including the salary costs of employees working on the program and if applicable, the non-recurring costs of fixed telecommunication furnishings and office equipment.

§ 54A:4-20 Employer allowed credit for employee who donates organ, bone marrow.

5. a. A taxpayer that employs a person who missed time from work during the taxable year because the person donated one or more of the person's human organs, or a part thereof, or bone marrow to another human for human organ transplantation, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 25 percent of the person's salary during the time missed from work, for up to 30 days of missed work for each donation.

A taxpayer shall only be allowed this credit for the time that the taxpayer grants the person paid time off and only if such time is in addition to any other paid time off granted to the person.

b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. for a taxable year shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero.

c. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year. Any remaining credit shall not be carried forward to another taxable year.

A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year.

§ 54A:4-21 Credit against tax.

107. a. For taxable years 2020, 2021, and 2022, a taxpayer, upon approval of an application to the authority shall be allowed a credit against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. in the amount of $10,000 for each qualifying new hire involved in the manufacture of personal protective equipment in a qualified facility in which the taxpayer made a capital investment during the taxable year.

b. The minimum capital investment in a qualified facility required to be eligible for a credit under this section shall be as follows:

(1) for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $10 per square foot of gross leasable area;

(2) for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in counties in the State not listed in paragraph (1) of this subsection, a minimum investment of $20 per square foot of gross leasable area;

(3) for the new construction of a premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $100 per square foot of gross leasable area; or

(4) for the new construction of a premises in counties in the State not listed in paragraph (3) of this subsection, a minimum investment of $120 per square foot of gross leasable area.

c. The minimum number of new or retained qualifying full-time jobs required to be eligible for a credit under this section shall be as follows:

(1) for a qualified facility in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum of five new or 15 retained qualifying full-time jobs; and

(2) for a qualified facility in counties in the State not listed in paragraph (1) of this subsection, a minimum of ten new or 25 retained qualifying full-time jobs.

d. In addition to the amount of credit allowed pursuant to subsection a. of this section, a taxpayer shall be allowed the following tax credits for taxable years 2020, 2021, and 2022:

(1) $1,000 per qualifying full-time job in a taxable year at a qualified facility that is a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet;

(2) $1,500 per qualifying full-time job in a taxable year at a qualified facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer and a college or university located within the State; and

(3) $1,000 per qualifying full-time job in a taxable year at a qualified facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or county college located within the State.

e. The total credit allowed to a taxpayer pursuant to this section during the taxable year shall not exceed $500,000. A taxpayer shall not be eligible for a tax credit under this section for the same qualifying new hire for which the taxpayer is receiving a tax credit incentive award under the Emerge Program established by sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.).

f. If the amount of 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; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. The director shall determine the order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law.

g. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to the distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

h. The combined value of all tax credits approved by the authority and the director pursuant to this section and pursuant to section 1 of P.L.2020, c.156 (C.34:1B-269) shall not exceed $10,000,000 in any State fiscal year to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).

i. An application for the tax credit shall be submitted to the authority in a form and manner prescribed by the chief executive officer of the authority. As a condition of receiving tax credits under this section, an applicant shall be required to commit to employ qualifying new hires for which tax credits are awarded under this section for a period of five years.

j. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the chief executive officer of the authority is authorized to adopt immediately upon filing with the Office of Administrative Law such rules and regulations shall be effective for a period not to exceed 360 days following the date of filing and may thereafter be amended, adopted, or readopted by the chief executive officer of the authority in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.). The chief executive officer of the authority shall consult with the Commissioner of Health related to any specification requirements for what manufactured products are to qualify as personal protective equipment pursuant to this section.

k. As used in this section:

"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

"Director" means Director of the Division of Taxation in the Department of the Treasury;

"Personal protective equipment" means coveralls, face shields, gloves, gowns, masks, respirators, safeguard equipment, and other equipment designed to protect the wearer from the spread of infection or illness as may be modified from time to time by the board of the authority.

"Qualified facility" means a facility that is:

(1) located in a redevelopment area or rehabilitation area as defined in section 3 of P.L.1992, c.79 (C.40A:12A-3);

(2) located in a Smart Growth Area as identified by the Office of Planning Advocacy;

(3) a facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer and a college or university located within the State;

(4) a facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or community located within the State; or

(5) a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet.

"Qualifying full-time job" means a full-time employee hired by the taxpayer during the privilege period for the manufacturing of personal protective equipment in this State. The person hired shall be employed for at least 35 hours a week and shall be paid employee wages at a rate of not less than $15 per hour, or render any other standard of service generally accepted by custom or practice as full-time employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. and is paid employee wages at a rate of not less than $15 per hour. "Qualifying new hire" shall not include any person who works as an independent contractor or on a consulting basis for the business. "Qualifying new or retained job" includes only a position for which the taxpayer provides employee health benefits under a health benefits plan authorized pursuant to State or federal law.

§ 54A:4-22 Tax credit for taxpayer's purchase of unit concrete products that utilize carbon footprint-reducing technology.

5. a. A taxpayer who in a privilege period purchases unit concrete products that utilize carbon footprint-reducing technology, which may include permeable pavement, for use in the construction or improvement of any residential dwelling or commercial building, or in the replacement of an impervious surface with permeable pavement, in the State shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq., in an amount equal to $2.00 per square foot of unit concrete products that utilize carbon footprint-reducing technology, which may include permeable pavement, used in the construction or improvement of any residential dwelling or commercial building, or in the replacement of an impervious surface with permeable pavement. The credit shall be allowed in the taxable year in which the purchase is made. The total amount of the tax credit granted pursuant to this section shall not exceed $3,000 for a residential property, and $30,000 for a commercial property in a single taxable year. In order to qualify for the tax credit pursuant to this section, a person shall purchase at least 100 square feet of unit concrete products that utilize carbon footprint-reducing technology, which may include permeable pavement.

b. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed.

c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.

(2) A New Jersey S Corporation shall not be allowed a credit under this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

d. In order to be allowed a tax credit pursuant to subsection a. of this section, a taxpayer who has purchased 100 or more square feet of unit concrete products certified pursuant to section 10 of P.L.2021, c.278 (C.52:27D-141.17) shall attach receipts for the unit concrete products for which a tax credit is claimed and an affidavit that the unit concrete products are or will be used exclusively in New Jersey to any return the taxpayer is required to file under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. A credit shall be initially allowed for the taxable year in which the unit concrete products are purchased, and any unused portion thereof may be carried forward into subsequent taxable years as provided in subsection b. of this section.

e. No amount of cost included in calculation of the credit allowed under this section shall be included in the costs for calculation of any other credit against the gross income tax imposed pursuant to N.J.S.54A:1-1 et seq.

f. The value of tax credits allowed by the director pursuant to this section and pursuant to section 4 of P.L.2021, c.278 (C.54:10A-5.48) shall not exceed a cumulative total of $20,000,000 in each fiscal year to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. and the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).

g. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the director, in consultation with the Department of Environmental Protection, shall adopt, immediately upon filing the proper notice with the Office of Administrative Law, rules and regulations as are necessary to implement the provisions of this section. These rules and regulations shall be in effect for a period not to exceed 365 days after the date of the filing. The rules and regulations shall thereafter be amended, adopted, or readopted in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The director may require the submission of any information the director deems necessary to award a tax credit pursuant to this section.

h. As used in this section:

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Permeable pavement" means a concrete product that allows rainwater to penetrate the pavement and percolate into the supporting soils and includes, but is not limited to, pervious concrete, permeable interlocking concrete pavers, and concrete grid pavers.

"Unit concrete product" means a concrete building product that is fabricated under controlled conditions separate and remote from the intended point of use and is produced in a wet cast or dry cast method in a factory setting and then transported to the location of intended use for installation, including, but not limited to, all concrete pavers, whether permeable or non-permeable, and concrete block. "Unit concrete product" shall not include ready mix concrete, sand, stone, gravel, or bituminous concrete or asphalt.

"Unit concrete product that utilizes carbon footprint-reducing technology" means a unit concrete product that is certified by the Department of Environmental Protection, or any independent third party authorized by the department, pursuant to section 10 of P.L.2021, c.278 (C.52:27D-141.17), as generating at least 50 percent less carbon dioxide emissions in the production and utilization of the unit concrete product than conventional unit concrete products made with ordinary Portland cement. Such products shall also conform with the relevant requirements of the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) that incorporate by reference TMS 402/602 Building Code Requirements and Specification for Masonry Structures.

§ 54A:4-23 Tax credit, "New Jersey Gross Income Tax Act", producer, low embodied carbon concrete, carbon capture, utilization, storage technology; requirements, qualifications.

4. a. For taxable years beginning on or after January 1 next following the effective date of P.L.2023, c.4 (C.13:1D-70 et al.), a taxpayer that is a producer of low embodied carbon concrete or concrete that utilizes carbon capture, utilization, and storage technology and that meets the requirements of this section shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount as provided in subsection c. of this section.

b. In order to qualify for a tax credit pursuant to subsection a. of this section, a concrete producer shall:

(1) deliver, pursuant to a contract with a State procuring agency or with a private contracting firm that has contracted with the State, low embodied carbon concrete or concrete that incorporates carbon capture, utilization, and storage technology, which concrete is used by a construction or improvement project that requires the purchase of 50 cubic yards or more of concrete; and

(2) submit to the department for review and approval a certified environmental product declaration that provides a global warming potential value for the delivered concrete.

c. (1) For the delivery of low embodied carbon concrete, a taxpayer may be eligible for a tax credit calculated using the formula provided by the department pursuant to section 3 of P.L.2023, c.4 (C.54:10A-5.50), not to exceed five percent of the costs of the low embodied concrete delivered.

(2) For the delivery of concrete that incorporates carbon capture, utilization, and storage technology, a taxpayer may be eligible for a tax credit calculated using the formula provided by the department pursuant to section 3 of P.L.2023, c.4 (C.54:10A-5.50), not to exceed three percent of the costs of the concrete delivered that incorporates carbon capture, utilization, and storage technology.

(3) A taxpayer delivering concrete that is both low embodied carbon concrete and concrete that incorporates carbon capture, utilization, and storage technology may qualify for both tax credits authorized pursuant to paragraphs (1) and (2) of this subsection, not to exceed eight percent of the costs of the concrete delivered that is low embodied carbon concrete that incorporates carbon capture, utilization, and storage technology.

d. In order to receive the tax credit allowed pursuant to this section, a taxpayer shall submit to the using agency a certification, in a form provided by the department, that includes: (a) a statement of the amount and cost of the low embodied carbon concrete or concrete that incorporates carbon capture, utilization and storage technology that was delivered in accordance with paragraph (1) of subsection b. of this section, with appropriate supporting documentation; (b) the environmental product declaration approved by the department pursuant to paragraph (2) of subsection b. of this section; (c) the amount of the tax credit calculated pursuant to subsection c. of this section; (d) a copy of the contract pursuant to which concrete was delivered; and (e) any other information as determined relevant by the department or requested by the using agency.

e. Upon approval of the certification, the using agency shall notify the director as to the eligibility of the taxpayer for a tax credit in the amount approved by the department and using agency. The director, prior to issuing a tax credit certificate pursuant to this section, may require the submission by the taxpayer of any information the director deems necessary.

f. When filing a tax return that includes a claim for a credit pursuant to this section, the taxpayer who received the credit shall include a copy of the tax credit certificate issued by the director.

g. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the tax imposed pursuant the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. Any credit shall be valid in the taxable year in which the tax credit certificate is approved and any unused portion thereof may be carried forward into the next seven taxable years or until depleted, whichever is earlier, after which the tax credit shall expire.

h. The total value of tax credits approved pursuant to P.L.2023, c.4 (C.13:1D-70 et al.) shall not in the aggregate exceed $10 million in any year. The director shall issue tax credit certificates pursuant to this section on a first-come, first-serve basis, except that the director shall not issue tax credit certificates to a single taxpayer pursuant to this section and section 2 of P.L.2023, c.4 (C.54:10A-5.49) in excess of $1 million in any taxable year. The director may issue a tax credit certificate to a taxpayer that has previously been allowed a tax credit under this section.

i. A using agency shall, in its sole discretion, determine whether to purchase or use low embodied concrete or concrete that uses carbon capture, utilization, and storage technology in a construction or improvement project. In preparing the specifications for any contract for the purchase of 50 cubic yards or more of concrete, or for any construction or improvement project that requires the use of 50 cubic yards or more of concrete, the procuring agency shall include in the invitation to bid, where relevant, a statement that any response to the invitation that proposes or calls for the use low embodied carbon concrete or concrete that utilizes carbon capture, utilization, and storage technology shall be eligible for a tax credit pursuant to subsection a. of this section. For invitations to bid issued in the first five years after the effective date of P.L.2023, c.4 (C.13:1D-70 et al.), if a using agency makes a determination to purchase or use low embodied carbon concrete or concrete that uses carbon capture, utilization, and storage technology in the construction project, the procuring agency shall include in the invitation to bid a predetermined bid allowance price for the concrete, which shall be used by all bidders in the public bidding process.

j. Nothing in this section shall be construed to exempt any entity from complying with any applicable law, rule, standard, or specification, including, but not limited to, those regarding the use of concrete in construction projects.

k. As used in this section:

"Carbon capture, utilization, and storage technology" means the same as the term is defined in section 1 of P.L.2023, c.4 (C.13:1D-70).

"Department" means the Department of Environmental Protection.

"Director" means Director of the Division of Taxation in the Department of the Treasury.

"Environmental product declaration" means a product-specific Type III environmental product declaration that conforms to ISO Standard 14025, assesses the numeric global warming potential of the product, and allows for environmental impact comparisons between concrete mixes fulfilling the same functions.

"Global warming potential" means the same as the term is defined in section 1 of P.L.2023, c.4 (C.13:1D-70).

"Low embodied carbon concrete" means the same as the term is defined in section 1 of P.L.2023, c.4 (C.13:1D-70).

"Procuring agency" means any State department, authority, or commission having authority to contract for goods or services.

"Using agency" means any State department, authority, or commission that makes a purchase, pursuant to a State contract, of 50 cubic yards or more of concrete or that enters into a contract for a construction or improvement project that requires the use of 50 cubic yards or more of concrete.

§ 54A:4-24 Tax credit, "New Jersey Gross Income Tax Act, costs incurred, environmental product declaration analysis; requirements, qualifications.

5. a. (1) For taxable years beginning on or after January 1 next following the effective date of P.L.2023, c.4 (C.13:1D-70 et al.), a taxpayer that is a producer of concrete, or a producer of a major component of concrete including cement or aggregate, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to compensate the taxpayer for costs incurred as a result of conducting an environmental product declaration analysis to determine the global warming potential of concrete or concrete component produced at a production facility that the taxpayer owns or operates.

(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) the full cost incurred for an environmental product declaration analysis of a single concrete, cement, aggregate, or related production facility, or (b) $3,000. A taxpayer may claim the credit authorized pursuant to this section for the cost of completing environmental product declaration analyses at up to eight production facilities owned or operated by the same taxpayer in a single taxable year.

b. In order to receive the tax credit allowed pursuant to this section, the taxpayer shall submit to the department for approval a certification, in the form required by the department, that includes: (1) the costs incurred to complete the environmental product declaration; (2) the amount of the tax credit calculated pursuant to subsection (2) of subsection a. of this section; (3) a copy of the environmental product declaration; and (4) any other information determined to be relevant by the department.

c. Upon approval of the certification, the department shall notify the director as to the eligibility of the taxpayer for a tax credit in the amount approved by the department. The director, prior to issuing a tax credit certificate pursuant to this section, may require the submission by the taxpayer of any information the director deems necessary.

d. When filing a return that includes a claim for a credit pursuant to this section, the taxpayer who received the credit shall include a copy of the tax credit certificate.

e. The order of priority of the application of the tax credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection or under other provisions of N.J.S.54A:1-1 et seq. may be carried forward for seven taxable years following the taxable year for which the tax credit certificate was issued, after which the tax credit shall expire.

f. The total value of tax credits approved by the department, in consultation with the director, pursuant to P.L.2023, c.4 (C.13:1D-70 et al.) shall not in the aggregate exceed $10 million in any year. The director shall issue tax credits pursuant to this section on a first-come, first-serve basis. The director may issue a tax credit certificate to a taxpayer that has previously been allowed a tax credit under this section. The director, prior to issuing a tax credit certificate pursuant to this section, may require the submission by the taxpayer of any information the director deems necessary.

g. As used in this section:

"Concrete" means structural and non-structural masonry, and pre-cast and ready-mix concrete building products.

"Department" means the Department of Environmental Protection.

"Director" means Director of the Division of Taxation in the Department of the Treasury.

"Environmental product declaration" means a product-specific Type III environmental product declaration that conforms to ISO Standard 14025, assesses the numeric global warming potential of the product, and allows for environmental impact comparisons between concrete mixes fulfilling the same functions.

"Global warming potential" means the same as the term is defined in section 1 of P.L.2023, c.4 (C.13:1D-70).

Chapter 5

§ 54A:5-1 New Jersey gross income defined.

New Jersey gross income shall consist of the following categories of income:

a. Salaries, wages, tips, fees, commissions, bonuses, and other remuneration received for services rendered whether in cash or in property, and amounts paid or distributed, or deemed paid or distributed, out of a medical savings account that are not excluded from gross income pursuant to section 5 of P.L.1997, c.414 (C.54A:6-27).

b. Net profits from business. The net income from the operation of a business, profession or other activity after provision for all costs and expenses incurred in the conduct thereof, determined either on a cash or accrual basis in accordance with the method of accounting allowed for federal income tax purposes but without deduction of the amount of:

(1) taxes based on income;

(2) a civil, civil administrative, or criminal penalty or fine, including a penalty or fine under an administrative consent order, assessed and collected for a violation of a State or federal environmental law, an administrative consent order, or an environmental ordinance or resolution of a local governmental entity, and any interest earned on the penalty or fine, and any economic benefits having accrued to the violator as a result of a violation, which benefits are assessed and recovered in a civil, civil administrative, or criminal action, or pursuant to an administrative consent order. The provisions of this paragraph shall not apply to a penalty or fine assessed or collected for a violation of a State or federal environmental law, or local environmental ordinance or resolution, if the penalty or fine was for a violation that resulted from fire, riot, sabotage, flood, storm event, natural cause, or other act of God beyond the reasonable control of the violator, or caused by an act or omission of a person who was outside the reasonable control of the violator; and

(3) treble damages paid to the Department of Environmental Protection pursuant to subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f) for costs incurred by the department in removing, or arranging for the removal of, an unauthorized discharge upon the failure of the discharger to comply with a directive from the department to remove, or arrange for the removal of, a discharge.

c. Net gains or income from disposition of property. Net gains or net income, less net losses, derived from the sale, exchange or other disposition of property, including real or personal, whether tangible or intangible as determined in accordance with the method of accounting allowed for federal income tax purposes. For the purpose of determining gain or loss, the basis of property shall be the adjusted basis used for federal income tax purposes, except as expressly provided for under this act, but without a deduction for penalties, fines, or economic benefits excepted pursuant to paragraph (2), or for treble damages excepted pursuant to paragraph (3) of subsection b. of this section.

A taxpayer's net gain or loss on the sale, exchange or other disposition of a share of an S corporation shall be calculated by increasing the adjusted basis of the share by an amount equal to the shareholder's net losses and deductions in respect of the share allowed and deducted from income for federal income tax purposes, not including any personal net operating loss deductions, to the extent that such net losses were not offset by the taxpayer's pro rata share of S corporation income otherwise subject to taxation pursuant to subsection p. of this section in respect of another S corporation, subject to rules of priority and assignment determined by the director.

For the tax year 1976, any taxpayer with a tax liability under this subsection, or under the "Tax on Capital Gains and Other Unearned Income Act," P.L.1975, c.172 (C.54:8B-1 et seq.), shall not be subject to payment of an amount greater than the amount he would have paid if either return had covered all capital transactions during the full tax year 1976; provided, however, that the rate which shall apply to any capital gain shall be that in effect on the date of the transaction. To the extent that any loss is used to offset any gain under P.L.1975, c.172, it shall not be used to offset any gain under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

The term "net gains or income" shall not include gains or income derived from obligations which are referred to in clause (1) or (2) of N.J.S.54A:6-14 of this act or from securities which evidence ownership in a qualified investment fund as defined in section 2 of P.L.1987, c.310 (C.54A:6-14.1). The term "net gains or income" shall not include gains or income derived from the sale or assignment of a tax credit transfer certificate pursuant to section 7 of P.L.2011, c.149 (C.34:1B-248) and section 10 of P.L.2014, c.63 (C.34:1B-251) from any sale or assignment of a tax credit issued pursuant to an award of tax credits approved by the New Jersey Economic Development Authority prior to July 1, 2018, regardless of when such sale or assignment occurs. The term "net gains or net income" shall not include gains or income from transactions to the extent to which nonrecognition is allowed for federal income tax purposes. The term "sale, exchange or other disposition" shall not include the exchange of stock or securities in a corporation a party to a reorganization in pursuance of a plan of reorganization, solely for stock or securities in such corporation or in another corporation a party to the reorganization and the transfer of property to a corporation by one or more persons solely in exchange for stock or securities in such corporation if immediately after the exchange such person or persons are in control of the corporation. For purposes of this clause, stock or securities issued for services shall not be considered as issued in return for property.

For purposes of this clause, the term "reorganization" means--

(i) A statutory merger or consolidation;

(ii) The acquisition by one corporation, in exchange solely for all or part of its voting stock (or in exchange solely for all or a part of the voting stock of a corporation which is in control of the acquiring corporation) of stock of another corporation if, immediately after the acquisition, the acquiring corporation has control of such other corporation (whether or not such acquiring corporation had control immediately before the acquisition);

(iii) The acquisition by one corporation, in exchange solely for all or part of its voting stock (or in exchange solely for all or a part of the voting stock of a corporation which is in control of the acquiring corporation), of substantially all of the properties of another corporation, but in determining whether the exchange is solely for stock the assumption by the acquiring corporation of a liability of the other, or the fact that property acquired is subject to a liability, shall be disregarded;

(iv) A transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor, or one or more of its shareholders (including persons who were shareholders immediately before the transfer), or any combination thereof, is in control of the corporation to which the assets are transferred;

(v) A recapitalization;

(vi) A mere change in identity, form, or place of organization however effected; or

(vii) The acquisition by one corporation, in exchange for stock of a corporation (referred to in this subclause as "controlling corporation") which is in control of the acquiring corporation, of substantially all of the properties of another corporation which in the transaction is merged into the acquiring corporation shall not disqualify a transaction under subclause (i) if such transaction would have qualified under subclause (i) if the merger had been into the controlling corporation, and no stock of the acquiring corporation is used in the transaction;

(viii) A transaction otherwise qualifying under subclause (i) shall not be disqualified by reason of the fact that stock of a corporation (referred to in this subclause as the "controlling corporation") which before the merger was in control of the merged corporation is used in the transaction, if after the transaction, the corporation surviving the merger holds substantially all of its properties and of the properties of the merged corporation (other than stock of the controlling corporation distributed in the transaction); and in the transaction, former shareholders of the surviving corporation exchanged, for an amount of voting stock of the controlling corporation, an amount of stock in the surviving corporation which constitutes control of such corporation.

For purposes of this clause, the term "control" means the ownership of stock possessing at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock of the corporation.

For purposes of this clause, the term "a party to a reorganization" includes a corporation resulting from a reorganization, and both corporations, in the case of a reorganization resulting from the acquisition by one corporation of stock or properties of another. In the case of a reorganization qualifying under subclause (i) by reason of subclause (vii) the term "a party to a reorganization" includes the controlling corporation referred to in such subclause (vii).

Notwithstanding any provisions hereof, upon every such exchange or conversion, the taxpayer's basis for the stock or securities received shall be the same as the taxpayer's actual or attributed basis for the stock, securities or property surrendered in exchange therefor.

d. Net gains or net income derived from or in the form of rents, royalties, patents, and copyrights.

e. Interest, except interest referred to in clause (1) or (2) of N.J.S.54A:6-14, or distributions paid by a qualified investment fund as defined in section 2 of P.L.1987, c.310 (C.54A:6-14.1), to the extent provided in that section.

f. Dividends. "Dividends" means any distribution in cash or property made by a corporation, association or business trust that is not an S corporation, (1) out of accumulated earnings and profits, or (2) out of earnings and profits of the year in which such dividend is paid and any distribution in cash or property made by an S corporation, as specifically determined pursuant to section 16 of P.L.1993, c.173 (C.54A:5-14).

The term "dividends" shall not include distributions paid by a qualified investment fund as defined in section 2 of P.L.1987, c.310 (C.54A:6-14.1), to the extent provided in that section.

g. Gambling winnings.

h. Net gains or income derived through estates or trusts.

i. Income in respect of a decedent.

j. Amounts distributed or withdrawn from an employee trust attributable to contributions to the trust which were excluded from gross income under the provisions of chapter 6 of Title 54A of the New Jersey Statutes, amounts rolled over from an IRA, as defined pursuant to subsection (a) of section 408 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.408, that is not a Roth IRA, as defined pursuant to subsection b. of section 2 of P.L.1998,c.57 (C.54A:6-28) to an IRA that is a Roth IRA, and pensions and annuities except to the extent of exclusions in N.J.S.54A:6-10 hereunder, notwithstanding the provisions of N.J.S.18A:66-51, P.L.1973, c.140, s.41 (C.43:6A-41), P.L.1954, c.84, s.53 (C.43:15A-53), P.L.1944, c.255, s.17 (C.43:16A-17), P.L.1965, c.89, s.45 (C.53:5A-45), R.S.43:10-14, P.L.1943, c.160, s.22 (C.43:10-18.22), P.L.1948, c.310, s.22 (C.43:10-18.71), P.L.1954, c.218, s.32 (C.43:13-22.34), P.L.1964, c.275, s.11 (C.43:13-22.60), R.S.43:10-57, P.L.1938, c.330, s.13 (C.43:10-105), R.S.43:13-44, and P.L.1943, c.189, s.5 (C.43:13-37.5).

k. Distributive share of partnership income, excluding the gain or income derived from the sale or assignment of a tax credit transfer certificate pursuant to section 7 of P.L.2011, c.149 (C.34:1B-248) and section 10 of P.L.2014, c.63 (C.34:1B-251) from any sale or assignment of a tax credit issued pursuant to an award of tax credits approved by the New Jersey Economic Development Authority prior to July 1, 2018, regardless of when such sale or assignment occurs.

l. Amounts received as prizes and awards, except as provided in N.J.S.54A:6-8 and N.J.S.54A:6-11 hereunder.

m. Rental value of a residence furnished by an employer or a rental allowance paid by an employer to provide a home.

n. Alimony and separate maintenance payments to the extent that such payments are required to be made under a decree of divorce or separate maintenance but not including payments for support of minor children.

o. Income, gain or profit derived from acts or omissions defined as crimes or offenses under the laws of this State or any other jurisdiction.

p. Net pro rata share of S corporation income, excluding the gain or income derived from the sale or assignment of a tax credit transfer certificate pursuant to section 7 of P.L.2011, c.149 (C.34:1B-248) and section 10 P.L.2014, c.63 (C.34:1B-251) from any sale or assignment of a tax credit issued pursuant to an award of tax credits approved by the New Jersey Economic Development Authority prior to July 1, 2018, regardless of when such sale or assignment occurs.

§ 54A:5-1.1 Certain IRA roll over amounts protected for 4 years.

3. Notwithstanding the provisions of N.J.S.54A:5-1 or any other law to the contrary, in the case of a distribution before January 1, 1999, any amount required to be included in gross income by reason of the amendments to subsection j. of N.J.S.54A:5-1 enacted pursuant to section 1 of P.L.1998, c.57 shall be so included ratably over the 4-taxable year period beginning with the taxable year in which the payment or distribution is made.

§ 54A:5-1.2 Determination of category of income net of expenses or depreciation, certain; timing.

26. a. For taxable years beginning on or after January 1, 2004, notwithstanding the provisions of N.J.S.54A:5-1, if any, or any other law to the contrary, for the purposes of determining the amount of a category of income pursuant to N.J.S.54A:5-1 that is net of expenses:

(1) notwithstanding the provisions of subsection (k) of section 168 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.168, subsection (b) of section 1400L of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1400L, or any other federal law, for property placed in service on or after January 1, 2004, the depreciation deduction otherwise allowed pursuant to section 167 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.167, shall be determined pursuant to the provisions of the federal Internal Revenue Code of 1986 (26 U.S.C. s.1 et seq.) in effect on December 31, 2001; and

(2) notwithstanding the provisions of section 179 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.179, for property placed in service on or after January 1, 2004, the costs that a taxpayer may otherwise elect to treat as an expense which is not chargeable to a capital account shall be determined pursuant to the provisions of the federal Internal Revenue Code of 1986 (26 U.S.C. s.1 et seq.) in effect on December 31, 2002.

b. The director shall prescribe the rules and regulations necessary to carry out the provisions of this section, including, among others, those for determining the adjusted basis of the acquired property for the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

§ 54A:5-1.2a Taxpayer, depreciation, eligible property expenditures, New Jersey Gross Income Tax Act; rules, regulations.

2. a. Notwithstanding section 26 of P.L.2004, c.65 (C.54A:5-1.2), for purposes of calculating the depreciation deduction allowed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., a taxpayer shall be allowed to depreciate a percentage of eligible property expenditures, as that percentage is determined and computed pursuant to subsection b. of this section, over a 10-year period.

b. For purposes of calculating the percentage of eligible property expenditures depreciated by a taxpayer pursuant to subsection a. of this section, the taxpayer shall apply the following formula: 2 x (the number of affordable housing units in the development / the total number of housing units in the development).

c. The Director of the Division of Taxation in the Department of the Treasury shall prescribe the rules and regulations necessary to carry out the provisions of this section.

d. As used in this section:

"Affordable housing" means housing occupied or restricted to occupancy by households with income no greater than 80 percent of the regional median income, including, but not limited to, housing that is deed restricted as affordable pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).

"Affordable housing development" means a development:

for which construction commences on or after the effective date of P.L.2024, c.1 (C.54:10A-4.17 et al.);

for which taxes are not abated or exempted pursuant to the terms of a financial agreement under the "Long Term Tax Exemption Law," P.L.1991, c.431 (C.40A:20-1 et seq.) or does not receive an affordable housing subsidy for the construction of low- and moderate-income housing; and

that includes one or more units of housing, at least 20 percent of which qualify as affordable housing.

"Affordable housing subsidy" means any financing that is intended to support the development of affordable housing and is provided by the Department of Community Affairs, the New Jersey Housing and Mortgage Finance Agency, or a municipal affordable housing trust fund, except that the term shall not include any rebates or incentives that are intended to promote energy efficiency standards.

"Eligible property expenditures" means capital expenditures incurred by the taxpayer in connection with the construction of a new affordable housing development owned by the taxpayer.

§ 54A:5-2 Losses

Losses which occur within one category of gross income may be applied against other sources of gross income within the same category of gross income during the taxable year. However, a net loss in one category of gross income may not be applied against gross income in another category of gross income.

§ 54A:5-3 Taxability of estates, trusts and their beneficiaries

The income of a beneficiary of an estate or trust in respect of such estate or trust shall consist of that part of the income or gains received by the estate or trust for its taxable year ending within or with the beneficiary's taxable year which, under the governing instrument and applicable State law, is required to be distributed currently or is in fact paid or credited to said beneficiary.

The income or gains of the estate or trust, if any, taxable to such estate or trust shall consist of the income or gains received by it which has not been distributed or credited to its beneficiaries.

Where an estate or trust has paid a tax under this act upon income distributed or to be distributed to a beneficiary, such beneficiary may exclude such income from his gross income in the year paid or credited to him.

§ 54A:5-4 Taxability of partners

a. Except as provided in subsections b. and c. of this section, a partnership or association as such shall not be subject to the tax imposed by this act, but the income or gain of a partner or member of a partnership or association shall be subject to the tax and the tax shall be imposed on the partner's or member's share, whether or not distributed, of the income or gain received by the partnership or association for its taxable year ending within or with the partner's or member's taxable year.

b. A partnership shall report and make payment of any New Jersey gross income tax liability that results from the federal partnership audit adjustments in accordance with subsection d. of section 8 of P.L.2022,c.133 (C.54:50-47).

c. Failure of the partnership, partner, indirect partner, tiered partner, or member to report or pay federal adjustments that result from the federal partnership audit adjustments shall not prevent the director from assessing a partnership, partner, indirect partner, tiered partner, or member for taxes they owe, using the best information available, if the partnership, partner, indirect partner, tiered partner, or member fails to timely make any report or payment required by this section for any reason.

§ 54A:5-6 Husband and wife

(a) Separate return. If the income of husband or wife who are both nonresidents of this State and are subject to tax under this act is determined on a separately filed return, their incomes from sources within this State shall be separately determined.

(b) One spouse a nonresident. If either husband or wife is a nonresident and the other a resident, separate taxes shall be determined on their separate incomes on such forms as the director shall prescribe, unless both elect to determine their joint income as if both were residents in which event their tax liabilities shall be joint and several.

(c) The filing requirements for nonresidents shall be governed by the provisions of section 54A:8-3.1 except with respect to the conditions set forth in subsection (b) of this section.

§ 54A:5-7 Allocations of income of nonresidents

Where a nonresident taxpayer earns, receives or acquires income from sources partly within and partly without this State or engages in a business, trade, profession or occupation partly within and partly without this State, and, as a result thereof or for other reasons that portion of the income from sources within this State cannot readily or accurately be ascertained, the director may by regulation prescribe uniform rules for apportionment or allocation of so much of such taxpayer's income as fairly and equitably represents income, derived from sources within this State and subject to tax under this act.

§ 54A:5-8 Income from sources within State for nonresident.

a. Income from sources within this State for a nonresident individual, estate or trust means the income from the categories of gross income enumerated and classified under chapter 5 of this act to the extent that it is earned, received or acquired from sources within this State:

(1) By reason of ownership or disposition of any interest in real or tangible personal property in this State; or

(2) In connection with a trade, profession, occupation carried on in this State or for the rendition of personal services performed in this State; or

(3) As a distributive share of the income of an unincorporated business, profession, enterprise, undertaking or other activity as the result of work done, services rendered or other business activities conducted in this State except as allocated to another state pursuant to regulations promulgated by the director under this act; or

(4) From intangible personal property employed in a trade, profession, occupation or business carried on in this State; or

(5) As a result of any lottery or wagering transaction in this State other than that excluded from taxation pursuant to N.J.S.54A:6-11; or

(6) As S corporation income allocated to this State of a New Jersey S corporation.

b. Income from sources within this State for a nonresident individual shall not include income from pensions and annuities as set forth in subsection j. of N.J.S.54A:5-1.

c. For purposes of paragraphs (2) through (4) of subsection a. of this section, a nonresident taxpayer shall not be deemed to be carrying on a trade, profession, occupation, business, enterprise, undertaking or other activity in this State, or to be rendering personal services in this State, solely as a result of the purchase, holding and sale of intangible personal property by the trade, profession, occupation, business, enterprise or undertaking, to the extent that (1) the activities related to the intangible personal property are for the account of the trade, profession, occupation, business, enterprise, or undertaking and (2) the trade, profession, occupation, business, enterprise, or undertaking does not hold the intangible personal property for sale to customers. For the purposes of this subsection: "intangible personal property" includes, but is not limited to, "commodities", as defined in paragraph (2) of subsection (e), and "securities," as defined in paragraph (2) of subsection (c), of section 475 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.475; and "purchase, holding and sale of intangible personal property" includes activities incidental thereto giving rise to income, including commitment fees, breakup fees, income from securities lending, and any other incidental activities as prescribed or authorized by the director. The director shall adopt such regulations as the director deems necessary to accomplish the purposes of this section.

d. (1) The provisions of subsection c. of this section shall not apply to income from investment management services provided to a partnership, S corporation, or other entity.

(2) As used in this subsection:

"Investment management services" means providing a substantial quantity of any of the following services to a partnership, S corporation, or other entity as a partner thereto:

(a) advising as to the advisability of investing in, purchasing, or selling a specified asset;

(b) managing, acquiring, or disposing of a specified asset;

(c) arranging financing with respect to acquiring specified assets; or

(d) any activity in support of the services described in subparagraphs (a) through (c) of this paragraph.

A partner shall not be deemed to be providing investment management services under this section if the partnership interest is held directly or indirectly by a corporation, or any capital interest in the partnership, which provides the taxpayer with a right to share in partnership capital commensurate with the amount of capital contributed, determined at the time of receipt of such partnership interest, or the value of partnership interest subject to tax under section 83 of the Internal Revenue Code (26 U.S.C. s.83), upon the receipt or vesting of such interest.

"Specified asset" means certain securities, real estate held for rental or investment, interests in partnerships, commodities, or options or derivatives contracts, except if at least 80 percent of the average fair market value of the specified assets of the partnership, S corporation, or other entity during the taxable year consists of real estate.

(3) This subsection shall remain inoperative until enactment into law by the states of Connecticut, New York, and Massachusetts of legislation having an identical effect with this subsection, sections 7 and 9 of P.L.2018, c.45 (C.54A:5-16 and C.54:10A-6.4), and subsection (D) of section 6 of P.L.1945, c.162 (C.54:10A-6), as shall be determined by the Director of the Division of Taxation in the Department of the Treasury.

e. For an individual who is a nonresident of this State and who has income from employee compensation from a New Jersey employer for the performance of personal services performed outside of New Jersey that were not required by the employer to be performed outside of New Jersey, and whose state of residence imposes an income or wage tax that requires employee compensation to be sourced to an employer's location if the nonresident renders the personal services from an out-of-state location for the convenience of the nonresident employee and not due to the necessity of the employer, this State shall impose a similar New Jersey sourcing rule on that income of the nonresident.

f. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt, immediately upon filing with the Office of Administrative Law, regulations that the director deems necessary to implement the provisions of this section, which regulations shall be effective for a period not to exceed 180 from the date of filing. The director shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

§ 54A:5-9 S corporation tax exemption.

11. Except as otherwise provided by P.L.2019, c.320 (C.54A:12-1 et al.), an S corporation as such shall not be subject to the tax imposed by the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., but the S corporation income, dividends, and gain of a shareholder of an S corporation shall be subject to the tax, and the tax shall be imposed on the shareholder's pro rata share, whether or not distributed, of the S corporation income for its taxable year ending within or with the shareholder's taxable year.

§ 54A:5-10 Definitions

12. For the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.:

"New Jersey S corporation" means a corporation that has made a valid election to be an S corporation for federal tax purposes for the taxable year, and that has not made a valid election pursuant to subsection d. of section 20 of P.L.2022, c.133 (C.54:10A-5.22).

"Pro rata share" means the portion of any items attributable to an S corporation shareholder for a taxable year determined in the manner provided in, and subject to any election made under subsection (a) of section 1377 or subsection (e) of section 1362 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1377 and s.1362.

"Pro rata share of S corporation income" means the sum of the shareholder's proportionate share of:

For a New Jersey S corporation, the S corporation income allocated to this State of all New Jersey S corporations; and the S corporation income not allocated to this State.

"S corporation" means a corporation that has elected to be an "S corporation" pursuant to section 1361 of the federal Internal Revenue Code, 26 U.S.C. s.1361, for the taxable year.

"S corporation income" means the net of an S corporation's items of income, loss or deduction taken into account by the shareholder in the manner provided in section 1366 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1366; provided however that:

a. S corporation income shall be determined without the exclusion, deduction or credit of:

(1) any dividend exclusion or deduction otherwise allowed pursuant to paragraph 5 of subsection (k) of section 4 of P.L.1945, c.162 (C.54:10A-4);

(2) taxes paid or accrued to the United States, a possession or territory of the United States, a state including this State, a political subdivision thereof, or the District of Columbia on or measured by profits or income, or business presence or business activity, of the corporation;

(3) any income taxes paid or accrued to the United States, a possession or territory of the United States, a state including this State, a political subdivision thereof, or the District of Columbia paid or accrued by the S corporation on behalf of, or in satisfaction of the liabilities of, shareholders of the corporation;

(4) interest income on obligations of any state other than this State, or of a political subdivision thereof, or of the federal government, except as deducted pursuant to subsection b. of this section; or

(5) interest on indebtedness incurred or continued, expenses paid and incurred to purchase, carry, manage or conserve, and expenses of collection of the income or gain from obligations the income or gain from which is deductible pursuant to subsection b. of this definition; and

b. S corporation income shall be determined after deduction of:

(1) any gains or income derived from obligations which are referred to in N.J.S.54A:6-14 or from securities which evidence ownership in a qualified investment fund as defined in section 2 of P.L.1987, c.310 (C.54A:6-14.1), and any interest excluded from gross income pursuant to N.J.S.54A:6-14, or distributions excluded from income pursuant to section 2 of P.L.1987, c.310 (C.54A:6-14.1); and

(2) (a) in the case of a taxpayer that is a cannabis licensee, an amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed because cannabis is a controlled substance under federal law;

(b) for purposes of this paragraph, "licensee" means the same as that term is defined in section 3 of P.L.2021, c.16 (C.24:6I-33); and

c. The character of any S corporation item taken into account by a shareholder of an S corporation shall be determined as if such items were received or incurred by the S corporation and not its shareholder.

"S corporation income allocated to this State" means that portion of the S corporation income that is allocated to this State by the allocation factor of the corporation for the fiscal or calendar accounting period pursuant to sections 6 through 10 of P.L.1945, c.162 (C.54:10A-6 through 54:10A-10), reduced by any tax imposed pursuant to paragraph (3) of subsection (c) of section 5 of P.L.1945, c.162 (C. 54:10A-5).

"S corporation income not allocated to this State" means S corporation income less S corporation income allocated to this State.

§ 54A:5-11 Initial basis of shareholder of S corporation stock

13. a. A resident shareholder of S corporation stock held by the shareholder on the first day of the first taxable year following enactment of this section shall have an initial basis in the stock of that S corporation and any indebtedness of the S corporation equal to the basis of the stock determined as though the stock was stock of a corporation not an S corporation plus any indebtedness of the S corporation to the shareholder and shall be determined as of the first day of the first taxable year following enactment of this section.

b. A resident shareholder of S corporation stock to which subsection a. of this section does not apply shall have an initial basis in the stock of the S corporation and any indebtedness of the S corporation as determined pursuant to the federal Internal Revenue Code of 1986, determined as of the date that is the latest to occur of: the date on which the shareholder last became a resident of this State; the date on which the shareholder acquired the stock of the corporation; or the effective date of the corporation's most recent S election under the federal Internal Revenue Code of 1986.

c. The initial basis of a resident shareholder in the stock and indebtedness of an S corporation shall be adjusted after the date specified in subsections a. or b. of this section in the manner required by section 1011 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1011, except that such adjustments shall be limited to that portion of S corporation income allocated to this State and S corporation income not allocated to this State that is included in the shareholder's pro rata share of S corporation income and except that, with respect to any taxable period during which the shareholder is a resident of this State:

(1) any modification made pursuant to the definition of S corporation income pursuant to section 12 of P.L.1993, c.173 (C.54A:5-10) other than those for income exempt from taxation by this State pursuant to paragraph (5) of subsection a. and subsection b. of that definition shall be taken into account; and

(2) any adjustments made pursuant to section 1367 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1367, for a taxable period during which this State did not measure the income of a shareholder of an S corporation by reference to the S corporation's income shall not be taken into account.

d. A nonresident shareholder of S corporation stock shall have an initial basis in the stock of the S corporation and any indebtedness of the S corporation of zero as of the date that is the latest to occur of: the date on which the shareholder last became a nonresident of this State; the date on which the shareholder acquired the stock of the corporation; or the effective date of the corporation's most recent S election under the federal Internal Revenue Code of 1986.

e. The initial basis of a nonresident shareholder in the stock and indebtedness of an S corporation shall be adjusted after the date specified in subsection d. of this section as provided in section 1367 of the of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1367, except that such adjustments shall be limited to that portion of S corporation income allocated to this State that is included in the shareholder's pro rata share of S corporation income. In computing S corporation income allocated to this State any modification made pursuant to the definition of S corporation income pursuant to section 12 of P.L.1993, c.173 (C.54A:5-10) for income exempt from taxation by this State pursuant to paragraph (5) of subsection a. and subsection b. of that definition shall not be taken into account.

f. The basis in the hands of a resident shareholder of an S corporation in stock of the S corporation shall be reduced by the amount of any cash distribution which is not taxable to the shareholder as a result of the application of section 16 of P.L.1993, c.173 (C.54A:5-14).

g. For purposes of this section, any person acquiring stock or indebtedness of an S corporation by gift shall be considered to have acquired the stock or indebtedness at the time the donor acquired the stock or indebtedness.

§ 54A:5-12 Limits on shareholder's losses

14. a. The aggregate amount of losses or deductions of an S corporation taken into account by a shareholder of the S corporation for a taxable period pursuant to section 11 of P.L.1993, c.173 (C.54A:5-9), shall not exceed the shareholder's combined adjusted basis, determined in accordance with section 13 of P.L.1993, c.173 (C.54A:5-11), in the stock of the S corporation and any indebtedness of the S corporation to the shareholder.

b. Any loss or deduction of an S corporation which is disallowed for a taxable period pursuant to subsection a. of this section shall not be treated as incurred by the corporation in any succeeding taxable period with respect to that shareholder.

§ 54A:5-13 Shareholder's share of S corporation income prorated for periods of residence

15. For purposes of this act, if a shareholder of an S corporation is both a resident and a nonresident of this State during any taxable year, the shareholder's pro rata share of the S corporation income allocated to this State and S corporation income not allocated to this State for the taxable period shall be further prorated between the shareholder's periods of residence and nonresidence during the taxable period, in accordance with the number of days in each period.

§ 54A:5-14 Distributions made by S corporation, treatment

16. a. Subject to subsection c. of this section, a distribution made by an S corporation with respect to its stock to a resident shareholder shall be taken into account by the shareholder for purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to the extent that the distribution is treated as a dividend or as gain from the sale or exchange of property in the manner provided by section 1368 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1368.

b. Subject to subsection c. of this section, a distribution of money made by a corporation with respect to its stock to a resident shareholder during a post-termination transition period shall not be taken into account by the shareholder for purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to the extent the distribution is applied against and reduces the adjusted basis of the stock of the shareholder in the manner provided by section 1371(e) of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1371.

c. In applying sections 1368 and 1371(e) of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1368 and 1371, to any distribution referred to in subsection a. or b. of this section:

(1) the term "adjusted basis of the stock" means the shareholder's adjusted basis in the stock of the S corporation, as determined under section 13 of P.L.1993, c.173 (C.54A:5-11); and

(2) the term "accumulated adjustments account" means an amount that is equal to, and adjusted in the same manner as, the S corporation's accumulated adjustments account defined in section 1368(e)(1)(A) of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1368, except that any modifications required to be made pursuant to the definition of S corporation income shall be taken into account.

§ 54A:5-15 Determination of amount of category of income, certain disallowances.

2. Notwithstanding the provisions of N.J.S.54A:5-1, if any, or any other law to the contrary, for the purposes of determining the amount of a category of income pursuant to N.J.S.54A:5-1 that is net of expenses, no amounts shall be taken as a deduction pursuant to section 199 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.199, and the deduction of any amounts pursuant to section 199 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.199 shall be disallowed except that this disallowance shall not apply to amounts deducted pursuant to section 199 of the federal Internal Revenue Code of 1986 that are exclusively based upon domestic production gross receipts of the taxpayer or allocable to the taxpayer under that section which are derived only from any lease, rental, license, sale, exchange, or other disposition of qualifying production property which the taxpayer shall demonstrate to the satisfaction of the director was manufactured or produced by the taxpayer in whole or in significant part within the United States but not qualified production property that was grown or extracted by the taxpayer. "Manufactured or produced" as used in this paragraph shall be limited to performance of an operation or series of operations the object of which is to place items of tangible personal property in a form, composition, or character different from that in which they were acquired. The change in form, composition, or character shall be a substantial change, and result in a transformation of property into a different or substantially more usable product.

For tax years beginning after December 31, 2017, notwithstanding the provisions of N.J.S.54A:5-1 or any other law to the contrary, for the purposes of determining the amount of a category of income pursuant to N.J.S.54A:5-1 that is net of expenses, no amounts shall be taken as a deduction pursuant to section 199A of the federal Internal Revenue Code (26 U.S.C. s.199A).

§ 54A:5-16 Definitions.

7. a. As used in this section:

"Investment management services" means providing a substantial quantity of any of the following services to a partnership, S corporation, or other entity as a partner thereto:

(1) advising as to the advisability of investing in, purchasing, or selling a specified asset;

(2) managing, acquiring, or disposing of a specified asset;

(3) arranging financing with respect to acquiring specified assets; or

(4) any activity in support of the services described in paragraphs (1) through (3) of this subsection.

A partner shall not be deemed to be providing investment management services under this section if the partnership interest is held directly or indirectly by a corporation, or any capital interest in the partnership, which provides the taxpayer with a right to share in partnership capital commensurate with the amount of capital contributed, determined at the time of receipt of such partnership interest, or the value of partnership interest subject to tax under section 83 of the Internal Revenue Code (26 U.S.C. s.83), upon the receipt or vesting of such interest.

"Specified asset" means certain securities, real estate held for rental or investment, interests in partnerships, commodities, or options or derivatives contracts, except if at least 80 percent of the average fair market value of the specified assets of the partnership, S corporation, or other entity during the taxable year consists of real estate.

b. Notwithstanding the provisions of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to the contrary, in addition to the tax imposed on the income of a non-resident taxpayer pursuant to N.J.S.54A:5-8, there shall be imposed an additional surtax of 17 percent on income from investment management services received during the taxpayer's taxable year.

c. Notwithstanding the provisions of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to the contrary, in addition to the tax imposed on the income of a resident taxpayer from the categories of gross income enumerated and classified in N.J.S.54A:5-1 et seq., there shall be imposed an additional surtax of 17 percent on income received during the taxpayer's taxable year from investment management services provided to a partnership, S corporation, or other entity.

d. This section shall remain inoperative until enactment into law by the states of Connecticut, New York, and Massachusetts of legislation having an identical effect with this section, subsection d. of N.J.S.54A:5-8, subsection (D) of section 6 of P.L.1945, c.162 (C.54:10A-6), and section 9 of P.L.2018, c.45 (C.54:10A-6.4), as shall be determined by the Director of the Division of Taxation in the Department of the Treasury.

§ 54A:5-17 Cannabis licensees, gross income.

3. a. For cannabis licensees, New Jersey gross income under subsections b. and k. of N.J.S.54A:5-1 shall be determined without regard to section 280E of the Internal Revenue Code (26 U.S.C. s.280E).

b. For purposes of this section, "licensee" means the same as that term is defined in section 3 of P.L.2021, c.16 (C.24:6I-33).

§ 54A:5-18 Regulations.

4. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the director may adopt, immediately, upon filing with the Office of Administrative Law, regulations that the director deems necessary to implement the provisions of P.L.2023, c.50 (C.54A:5-17 et al.), which regulations shall be effective for a period not to exceed 360 days from the date of the filing. The director may thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

§ 54A:5-19 Income sourced, Corporation Business Tax Act, New Jersey Gross Income Tax Act, business conducted partly within, without State.

13. a. For the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for taxable years beginning on and after January 1, 2023, notwithstanding any provision in N.J.S.54A:1-1 et seq. or the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) to the contrary, a taxpayer that is subject to the provisions of N.J.S.54A:1-1 et seq. and engages in a trade or business, regardless of business form, or is a partner in a partnership or shareholder of an S corporation, which trade, business, partnership, or S corporation conducts business operations partly within and partly without this State and, as a result thereof or for other reasons that portion of the income from sources within the State cannot readily or accurately be ascertained, the income from the trade, business, partnership, or S corporation shall be sourced in a manner consistent with the provisions of sections 6 through 10 of the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-6 through C.54:10A-10). Income that is representative of the taxpayer's salary, wages, tips, fees, commissions, bonuses, and other remuneration shall be sourced pursuant to the provisions of N.J.S.54A:1-1 et seq.

b. The director shall promulgate rules and regulations necessary to carry out the provisions of this section.

Chapter 6

§ 54A:6-1 Items in 54A:6-2 to 54A:6-9 excluded

The items in sections 54A:6-2 to 54A:6-9, inclusive, shall be specifically excluded from gross income.

§ 54A:6-2 Federal social security benefits

All payments received under the Federal Social Security Act, whether they be regularly monthly benefits or lump sum death benefits.

§ 54A:6-3 Railroad retirement benefits

All payments received under the Railroad Retirement Act administered by the Federal Government.

§ 54A:6-4 Certain death benefits

a. Proceeds of life insurance contracts payable by reason of death.

b. Employees' death benefits, if such amounts are paid by or on behalf of an employer and are paid by reason of the death of the employee.

§ 54A:6-5 Gifts and inheritances

a. The value of property acquired by gift, bequest, devise or inheritance.

b. Income. Subsection a. shall not exclude from gross income:

1. The income from any property referred to in subsection a.

2. Where the gift, bequest, devise or inheritance is of income from property, the amount of such income.

§ 54A:6-6 Compensation for injuries or sickness

a. Amounts received under workmen's compensation acts as compensation for personal injuries or sickness.

b. The amount of damages received, whether by suit or agreement, on account of personal injuries or sickness.

c. Amounts received through accident or health insurance for personal injuries or sickness.

d. Amounts received as a pension, annuity or similar allowance for personal injuries or sickness resulting from active service in the Armed Forces of the United States or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the Foreign Service Act of 1946.

§ 54A:6-7 Certain pay of members of the armed forces, NJNG, exemption from taxable gross income.

a. Compensation paid by the United States for service in the Armed Forces of the United States performed by an individual not domiciled in this State.

b. Amounts received during the taxable year as mustering-out payments with respect to service in the Armed Forces of the United States.

c. Amounts received during the taxable year as housing and subsistence allowances by members of the active and reserve components of the Armed Forces of the United States, and by New Jersey National Guard members while on State active duty.

§ 54A:6-8 Scholarships and fellowship grants

a. Any amount received as a scholarship at an educational institution.

b. Any amount received as a fellowship grant.

c. Any amount received to cover expenses for travel, research or equipment which are incident to a scholarship or research grant, but only to the extent that the amount is so expended by the recipient.

§ 54A:6-9.1 Gains from sale, exchange of principal residence, excludable from gross income; conditions

1. a. The gain realized from the sale or exchange of property by a taxpayer shall be excludable from the gross income of the taxpayer at the election of the taxpayer, which shall be in conformity with the election of the taxpayer made for federal income tax purposes pursuant to section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.121, if, during the five-year period ending on the date of the sale or exchange, that property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating two years or more.

b. The amount of gain excludable from gross income under subsection a. of this section with respect to any sale or exchange shall not exceed:

(1) $250,000; or

(2) $500,000, in the case of a husband and wife filing jointly for the taxable year of the sale or exchange of the property, if:

(i) either spouse meets the ownership requirements of subsection a. with respect to the property;

(ii) both spouses meet use requirements of subsection a. of this section with respect to the property; and

(iii) neither spouse is ineligible for the exclusion provided in subsection a. of this section with respect to the property by reason of the limitations of subsection c. of this section.

c. The exclusion provided in subsection a. shall not apply to any sale or exchange by the taxpayer if, during the two-year period ending on the date of sale or exchange, there was another sale or exchange after May 6, 1997 by the taxpayer to which an election made pursuant to subsection a. applied, except that this limitation shall not prevent a husband and wife filing jointly from each excluding up to $250,000 of gain from the sale or exchange of each spouse's principal residence provided that each spouse would be allowed to exclude up to $250,000 of gain if each spouse had filed separately.

d. If a sale or exchange to which this section would apply but for the failure to meet the aggregate two-year period of ownership and use by the taxpayer as the taxpayer's principal residence during the five-year period ending on the date of the sale or exchange, and the sale or exchange is by reason of a change in place of employment, health, or unforeseen circumstances, to the extent provided for a similar exemption for federal income tax purposes pursuant to section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.121, then notwithstanding the amount of excludable gain allowed under subsection b. of this section, the amount of gain excludable from gross income with respect to such sale or exchange shall not exceed the amount which bears the same ratio to the amount which would be so excluded under this section if such requirements had been met as the shorter of

(1) the aggregate periods, during the five-year period ending on the date of such sale or exchange, the property has been owned and used by the taxpayer as the taxpayer's principal residence, or

(2) the period after the date of the most recent prior sale or exchange by the taxpayer to which subsection a. of this section applied and before the date of such sale or exchange bears to two years.

e. (1) An exclusion allowed pursuant to this section shall be available if a husband and wife file jointly for the taxable year of the sale or exchange and either spouse meets the ownership and use requirements of subsection a. of this section with respect to the property.

(2) For the purposes of this section, in the case of an unmarried individual whose spouse is deceased on the date of sale or exchange of property, the period the unmarried individual owned and used the property shall include the period the deceased spouse owned and used the property before the deceased spouse's death.

(3) For the purposes of this section, in the case of an individual holding property transferred to the individual in a transaction described in subsection (a) of section 1041 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1041, the period the individual owns the property shall include the period the transferor owned the property. An individual shall be treated as using the property as the individual's principal residence during any period of ownership while the individual's spouse or former spouse is granted use of the property under a divorce or separation instrument as defined in paragraph (2) of subsection (b) of section 71 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.71.

f. The provisions of this section shall apply with respect to qualified tenant-shareholders in cooperatives.

g. The exclusion of gain allowed pursuant to this section shall not apply to so much of the gain from the sale of any property as does not exceed the portion of the depreciation adjustments (as deemed in paragraph (3) of subsection (b) of section 1250 of the federal Internal Revenue Code of 1986) attributable to periods after May 6, 1997, in respect of that property.

h. For the purposes of this section, the destruction, theft, seizure, requisition, or condemnation of property shall be treated as the sale of the property.

i. In the case of a taxpayer who

(1) becomes physically or mentally incapable of self-care, and

(2) owns property and uses that property as the taxpayer's principal residence for periods aggregating at least one year during the five-year period described in subsection a. of this section;

that taxpayer shall be treated as using that property as the taxpayer's principal residence during any time during such five-year period in which the taxpayer owns the property and resides in any facility (including a nursing home) licensed by the State or political subdivision to care for an individual in the taxpayer's condition.

j. At the election of the taxpayer, the exclusion provided pursuant to this section shall apply to the sale or exchange of an interest in a principal residence by reason of that interest being a remainder interest in that residence, but this section shall not apply to any other interest in such residence which is sold or exchanged separately. However, this subsection shall not apply to any sale to, or exchange with, any person who bears a relationship to the taxpayer which is described in subsection (b) of section 267 or subsection (b) of section 707 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.267 or 26 U.S.C. s.707.

k. This section shall not apply to any sale or exchange by an individual if the treatment provided by paragraph (1) of subsection (a) of section 877 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.877, applies to that individual for federal income tax purposes.

l. In the case of property the acquisition of which by the taxpayer resulted under N.J.S.54A:6-9 in the exclusion of any part of the gain realized on the sale or exchange of another residence, there shall be included in determining the period for which the taxpayer has owned and used such property as the taxpayer's personal residence, the aggregate periods for which such other residence had been so owned and used.

§ 54A:6-9.2 Applicability of federal "Taxpayer Relief Act of 1997"

3. a. Notwithstanding the provisions of any law to the contrary, a taxpayer who elects to apply the provisions of paragraph (2) or (4) of subsection (d) of section 312 of the federal "Taxpayer Relief Act of 1997" (Pub. L.105-34), for federal income tax purposes shall be subject to the same provisions for New Jersey gross income tax purposes.

b. Notwithstanding the provision of any law to the contrary, the exclusion of gain realized from the sale or exchange of property by a taxpayer that has been owned and used by the taxpayer as the taxpayer's principal residence shall be excludable from the gross income of the taxpayer, upon the election of the taxpayer made pursuant to paragraph (3) of subsection (d) of section 312 of the federal "Taxpayer Relief Act of 1997" (Pub. L.105-34), for federal income tax purposes, and shall be determined pursuant to the proration method allowed pursuant to subsection d. of section 1 of P.L.1998, c.3 (C.54A:6-9.1), notwithstanding that the sale or exchange is not by reason of a change in place of employment, health, or unforeseen circumstances, and notwithstanding that the taxpayer does not meet the use and ownership requirement for periods aggregating two years, if the sale or exchange takes place during the two-year period beginning on August 5, 1997 and the taxpayer held the property on August 5, 1997.

§ 54A:6-10 Pensions and annuities.

a. Gross income shall not include that part of any amount received as an annuity under an annuity, endowment, or life insurance contract which bears the same ratio to such amount as the investment in the contract as of the annuity starting date bears to the expected return under the contract as of such date. Where (1) part of the consideration for an annuity, endowment, or life insurance contract is contributed by the employer, and (2) during the three-year period beginning on the date on which an amount is first received under the contract as an annuity, the aggregate amount receivable by the employee under the terms of the contract is equal to or greater than the consideration for the contract contributed by the employee, then all amounts received as an annuity under the contract shall be excluded from gross income until there has been so excluded an amount equal to the consideration for the contract contributed by the employee.

b. (1) In addition to that part of any amount received as an annuity which is excludable from gross income as herein provided, gross income shall not include payments:

for taxable years beginning before January 1, 2000, of up to $10,000 for a married couple filing jointly, $5,000 for a married person filing separately, or $7,500 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2000, but before January 1, 2001, of up to $12,500 for a married couple filing jointly, $6,250 for a married person filing separately, or $9,375 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2001, but before January 1, 2002, of up to $15,000 for a married couple filing jointly, $7,500 for a married person filing separately, or $11,250 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2002, but before January 1, 2003, of up to $17,500 for a married couple filing jointly, $8,750 for a married person filing separately, or $13,125 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2003, but before January 1, 2017 of up to $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $15,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2017, but before January 1, 2018, of up to $40,000 for a married couple filing jointly, $20,000 for a married person filing separately, or $30,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2018, but before January 1, 2019, of up to $60,000 for a married couple filing jointly, $30,000 for a married person filing separately, or $45,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2019, but before January 1, 2020, of up to $80,000 for a married couple filing jointly, $40,000 for a married person filing separately, or $60,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2020, of up to $100,000 for a married couple filing jointly, $50,000 for a married person filing separately, or $75,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $100,000, but not more than $125,000, 50 percent of payments for a married couple filing jointly, 25 percent of payments for a married couple filing separately, or 37.5 percent of payments for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $125,000, but not more than $150,000, 25 percent of payments for a married couple filing jointly, 12.5 percent of payments for a married couple filing separately, or 18.75 percent of payments for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1,

which are received as an annuity, endowment or life insurance contract, or payments of any such amounts which are received as pension, disability, or retirement benefits, under any public or private plan, whether the consideration therefor is contributed by the employee or employer or both, by any person who is 62 years of age or older or who, by virtue of disability, is or would be eligible to receive payments under the federal Social Security Act.

(2) For taxable years beginning on or after January 1, 2005, but before January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $100,000.

For taxable years beginning on or after January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $150,000.

c. Gross income shall not include any amount received under any public or private plan by reason of a permanent and total disability.

d. Gross income shall not include distributions from an employees' trust described in section 401(a) of the Internal Revenue Code of 1986, as amended (hereinafter referred to as "the Code"), which is exempt from tax under section 501(a) of the Code if the distribution, except the portion representing the employees' contributions, is rolled over in accordance with section 402(a)(5) or section 403(a)(4) of the Code. The distribution shall be paid in one or more installments which constitute a lump-sum distribution within the meaning of section 402(e)(4)(A) (determined without reference to subsection (e)(4)(B)), or be on account of a termination of a plan of which the trust is a part or, in the case of a profit-sharing or stock bonus plan, a complete discontinuance of contributions under such plan.

§ 54A:6-11 Lottery winnings.

Gross income shall not include lottery winnings from the New Jersey Lottery, except that New Jersey Lottery winnings from a prize in an amount exceeding $10,000 shall be included in gross income.

§ 54A:6-13 Unemployment insurance benefits

All payments and benefits received under any unemployment insurance law.

§ 54A:6-14 Interest on certain obligations

Gross income shall not include interest on obligations (1) issued by or on behalf of this State or any county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation (including one created or existing pursuant to agreement or compact with this or any other state), body corporate and politic or political subdivision of this State, or (2) those obligations which are statutorily free from State or local taxation under any other act of this State or under the laws of the United States.

§ 54A:6-14.1 Exemption of distributions of qualified investment fund

2. Gross income shall not include distributions paid by a qualified investment fund, to the extent that the distributions are attributable to interest or gain from obligations described in N.J.S.54A:6-14.

For the purposes of this act, "qualified investment fund" means any investment company or trust registered with the Securities and Exchange Commission, or any series of such investment company or trust, which for the calendar year in which the distribution is paid:

a. Has no investments other than interest-bearing obligations, obligations issued at a discount, and cash and cash items, including receivables, and financial options, futures, forward contracts, or other similar financial instruments related to interest-bearing obligations, obligations issued at a discount or bond indexes related thereto; and

b. Has not less than 80% of the aggregate principal amount of all of its investments, excluding financial options, futures, forward contracts, or other similar financial instruments related to interest-bearing obligations, obligations issued at a discount or bond indexes related thereto to the extent such instruments are authorized by section 851(b) of the federal Internal Revenue Code of 1986, 26 U.S.C. s.851(b), cash and cash items, which cash items shall include receivables, in obligations described in N.J.S.54A:6-14.

For purposes of this section, "series" means a segregated portfolio of assets, the beneficial interests in which are owned by the holders of a class or series of stock or shares of the investment company or trust that is preferred over all other classes or series in respect to the portfolio of assets.

§ 54A:6-15 Other retirement income.

3. Other retirement income. a. (1) Gross income shall not include income:

for taxable years beginning before January 1, 2000, of up to $10,000 for a married couple filing jointly, $5,000 for a married person filing separately, or $7,500 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2000, but before January 1, 2001, of up to $12,500 for a married couple filing jointly, $6,250 for a married person filing separately, or $9,375 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2001, but before January 1, 2002, of up to $15,000 for a married couple filing jointly, $7,500 for a married person filing separately, or $11,250 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for the taxable year beginning on or after January 1, 2002, but before January 1, 2003, of up to $17,500 for a married couple filing jointly, $8,750 for a married person filing separately, or $13,125 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2003, but before January 1, 2017, gross income shall not include income of up to $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $15,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2017 but before January 1, 2018, gross income shall not include income of up to $40,000 for a married couple filing jointly, $20,000 for a married person filing separately, or $30,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2018, but before January 1, 2019, gross income shall not include income of up to $60,000 for a married couple filing jointly, $30,000 for a married person filing separately, or $45,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2019, but before January 1, 2020, gross income shall not include income of up to $80,000 for a married couple filing jointly, $40,000 for a married person filing separately, or $60,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2020, gross income shall not include income of up to $100,000 for a married couple filing jointly, $50,000 for a married person filing separately, or $75,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $100,000, but not more than $125,000, 50 percent of income for a married couple filing jointly, 25 percent of income for a married couple filing separately, or 37.5 percent of income for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1;

for taxable years beginning on or after January 1, 2021, for a taxpayer with income in excess of $125,000, but not more than $150,000, 25 percent of gross income for a married couple filing jointly, 12.5 percent of income for a married couple filing separately, or 18.75 percent of income for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1,

when received in any tax year by a person aged 62 years or older who received no income in excess of $3,000 from one or more of the sources enumerated in subsections a., b., k. and p. of N.J.S.54A:5-1.

(2) For taxable years beginning on or after January 1, 2005, but before January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $100,000.

For taxable years beginning on or after January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $150,000.

(3) The total exclusion under this subsection and that allowable under N.J.S.54A:6-10 shall not exceed the amounts of the exclusions set forth in this subsection.

b. In addition to the exclusion provided under N.J.S.54A:6-10 and subsection a. of this section, gross income shall not include income of up to $6,000 for a married couple filing jointly or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, or $3,000 for a single person or a married person filing separately, who is not covered under N.J.S.54A:6-2 or N.J.S.54A:6-3, but who would be eligible in any year to receive payments under either section if he or she were covered thereby.

§ 54A:6-21 Contributions to certain employee trusts

Gross income shall not include amounts contributed by an employer on behalf of and at the election of an employee to a trust which is part of a qualified cash or deferred arrangement which meets the requirements of Section 401(k) of the 1954 Internal Revenue Code, as amended.

§ 54A:6-22 Gross income exclusion.

2. Gross income shall not include payments and benefits directly received by a taxpayer under homeless persons' assistance programs, including but not limited to assistance in obtaining housing, temporary shelter and short-term financial assistance, as may be established pursuant to subsection h. of section 24 of P.L.1944, c.85 (C.52:27C-24), or benefits, including imputed income, received pursuant to the "Mortgage Stabilization and Relief Act," P.L.2008, c.127 (C.55:14K-82 et al.).

§ 54A:6-23 Commuter transportation benefits not considered gross income.

1. a. For the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., "gross income" shall not include employer provided commuter transportation benefits as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3), up to and including the limit per taxable year per employee pursuant to subsection b. of this section. Should an employee receive commuter transportation benefits in excess of those limits in a taxable year, only the amount in excess of those limits shall be included in gross income. If an employee receives money towards commuter transportation benefits from the employee's employer, as an advance, a reimbursement, or both, the employee shall furnish suitable proof to the employer in the form of receipts, ticket stubs or the like that the employee used the employer provided money for alternative means of commuting as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3).

b. (1) The limit per taxable year per employee shall be $720 for the taxable years beginning on and after January 1, 1993 but before January 1, 1997.

(2) The limit per taxable year per employee shall be $1,000 for the taxable years beginning on and after January 1, 1997 but before January 1, 2002. For taxable years beginning on or after January 1, 1994 but before January 1, 2002, the director shall adjust the limit, rounded down to the nearest $5, in proportion to the change in the average consumer price index for all urban consumers in the New York and Northeastern New Jersey and the Philadelphia areas, as reported by the United States Department of Labor, from calendar year 1993 to the calendar year ending immediately before the taxable year.

(3) The limit per taxable year per employee shall be $1,200 for the taxable years beginning on or after January 1, 2002, provided however that in the case of any taxable year beginning in a calendar year after 2002 the director shall adjust the limit for inflation in parallel with the adjustment pursuant to paragraph (6) of subsection (f) of section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132, so that the taxable year limit pursuant to this paragraph is equal to 12 times the adjusted federal monthly limit pursuant to subparagraph (A) of paragraph (2) of subsection (f) of section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132.

c. The exclusion provided by subsection a. of this section shall not apply to any commuter transportation benefit unless such benefit is provided in addition to and not in lieu of any compensation otherwise payable to the employee.

d. Acceptance of the cash value of qualified parking, pursuant to section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132, on the part of one employee of an employer in place of qualified parking fringe benefits provided to the other employees of the employer in addition to and not in lieu of compensation, shall not cause the qualified parking fringe to become a taxable benefit for employees who do not accept the cash value.

§ 54A:6-24 Cafeteria plan, qualified option, certain; not gross income

1. Gross income shall not include the value of an employee's qualified option under a cafeteria plan if the employee does not elect to receive cash and the value of the option is excludable from federal taxable income.

As used in this section:

"Cafeteria plan" means an employee benefit plan that meets the requirements of section 125 of the federal Internal Revenue Code of 1986, 26 U.S.C. s. 125;

"Qualified option" means an option to receive cash in lieu of a qualified employer-provided benefit which option may only be exercised if the employee derives a substantially similar benefit from a source other than the employer;

"Qualified employer-provided benefit" means a benefit the value of which is excludable from federal taxable income under a cafeteria plan but which is not a benefit provided pursuant to a salary reduction agreement; and

"Salary reduction agreement" means an agreement between an employer and an employee under which the employee individually chooses to reduce the employee's compensation, or to forgo increases in compensation, and to have the amount provided, as an employer-provided benefit, by the employer to the employee; including but not limited to the agreements commonly known as flexible spending accounts and premium conversion options.

§ 54A:6-25 Certain earnings, distributions excluded from gross income.

13. a. Gross income shall not include earnings on a Coverdell education savings account, a qualified tuition program account, or a qualified ABLE account until the earnings are distributed from the account, at which time the amount of the distribution attributable to earnings on the account and the amount of the distribution attributable to contributions allowed as a deduction pursuant to section 3 of P.L.2021, c.128 (C.54A:3-12) shall be includible in the gross income of the distributee except as provided in this section.

b. Gross income shall not include qualified distributions as defined in paragraph (3) of subsection c. of this section.

c. For purposes of this section:

(1) "Coverdell education savings account" means a Coverdell education savings account as defined pursuant to paragraph (1) of subsection (b) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.530.

(2) "Qualified tuition program account" means an account established pursuant to the "New Jersey Better Educational Savings Trust (NJBEST) Program," (N.J.S.18A:71B-35 et seq.) or an account established pursuant to any qualified tuition program, as defined pursuant to subsection (b) of section 529 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529 or a tuition credit or certificate purchased pursuant to any such program.

(3) "Qualified distribution" means any of the following:

(a) a distribution from a qualified tuition program account that is used for qualified higher education expenses as defined pursuant to paragraph (3) of subsection (e) of section 529 or a distribution from a qualified ABLE account that is used for qualified disability expenses as defined pursuant to paragraph (5) of subsection (e) of section 529A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529 or 529A;

(b) a rollover from one account to another account as described in clause (i) of subparagraph (C) of paragraph (3) of subsection (c) of section 529, clause (i) of subparagraph (C) of paragraph (1) of subsection (c) of section 529A, or paragraph (5) of subsection (d) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529, 529A, or 530; or

(c) a change in designated beneficiaries of an account as described in clause (ii) of subparagraph (C) of paragraph (3) of subsection (c) of section 529, clause (ii) of subparagraph (C) of paragraph (1) of subsection (c) of section 529A, or paragraph (6) of subsection (d) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529, 529A, or 530; and

(d) any other transfer involving a qualified ABLE account which is a qualified distribution for the purposes of section 529A of the federal Internal Revenue Code, 26 U.S.C. s.529A.

(4) "Qualified ABLE account" means an account established pursuant to P.L.2015, c.185 (C.52:18A-250 et al.) or an account established pursuant to any qualified State ABLE Program established pursuant to section 529A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529A.

d. The portion of a distribution from a Coverdell education savings account, a qualified ABLE account, or a qualified tuition program account that is attributable to earnings and the amount of the distribution attributable to contributions allowed as a deduction pursuant to section 3 of P.L.2021, c.128 (C.54A:3-12) shall be determined in accordance with the principles of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72, as applied for purposes of sections 529, 529A, and 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. ss.529, 529A, and 530.

§ 54A:6-25.1 Loan redemption exempt from taxation.

12. Gross income, for the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall not include amounts received as a loan redemption under the "Social Services Student Loan Redemption Program," established pursuant to P.L.2005, c.157 (C.18A:71B-87 et al).

§ 54A:6-25.2 Gross income, student loan debt, total, permanently disabled veterans.

1. Gross income shall not include amounts discharged through the Total and Permanent Disability discharge process of the United States Department of Education for student loan indebtedness of a taxpayer who is a totally and permanently disabled veteran. As used herein, "totally and permanently disabled veteran" means an individual who has been determined by the United States Department of Veterans Affairs to have a service-connected disability that is 100 percent disabling or to be totally disabled based on an individual unemployability rating.

§ 54A:6-26 Military pension, survivor's benefit payments excluded from gross income.

1. Gross income shall not include military pension payments or military survivor's benefit payments paid to individuals by the United States with respect to service in the Armed Forces of the United States.

§ 54A:6-27 Contributions to medical savings account not included in gross income.

5. a. Gross income shall not include contributions to a taxpayer's medical savings account that are excluded from the taxpayer's federal gross income pursuant to section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220.

b. Gross income shall not include amounts paid or distributed, or deemed paid or distributed, out of a taxpayer's medical savings account that are excluded from the taxpayer's federal gross income pursuant to section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220.

c. The exclusions provided by subsections a. and b. of this section shall, notwithstanding any amendment or supplement to federal law, be allowed only to "eligible individuals" qualifying under the limitations of subsection (i), and subject to the numerical limits of subsection (j), of section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220, as in effect on January 1, 1997.

§ 54A:6-28 Roth IRA distributions excluded from gross income.

2. a. Gross income shall not include distributions from a Roth IRA that are qualified distributions or that are rolled over to a Roth IRA.

b. "Roth IRA" means an individual retirement plan, as defined pursuant to section 7701 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.7701, that is designated in the manner prescribed by the federal Secretary of the Treasury pursuant to section 408A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.408A, as a Roth IRA and is subject to the contribution limits of that section.

"Qualified distribution" means any payment or distribution:

(1) made on or after the date on which the individual attains age 591/2,

(2) made to a beneficiary (or to the estate of the individual) on or after the death of the individual,

(3) attributable to the individual's being disabled within the meaning of paragraph (7) of subsection (m) of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72, or

(4) which is a qualified first time home buyer distribution as defined by, and subject to the limitations of, paragraph (2) of subsection (t) of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72;

provided, however, that a payment or distribution shall not be treated as a qualified distribution if it is made within the 5-taxable-year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individual's spouse made a contribution to a Roth IRA) established for such individual, or in the case of a payment or distribution allocable to a qualified rollover contribution from an individual retirement plan other than a Roth IRA (or income allocable thereto), it is made within the 5-taxable year period beginning with the taxable year in which the rollover contribution was made.

§ 54A:6-29 Holocaust reparations, restitution excluded from gross income

1. Gross income shall not include amounts received as reparations or restitution for the loss of liberty or damage to health by the victims of National Socialist (Nazi) persecution; returns of tangible or intangible property seized, misappropriated, or lost as a result of National Socialist (Nazi) actions or policies and any cash values in replacement of such property; payments of insurance policies purchased by the victims of National Socialist (Nazi) persecution; and any accumulated or accrued interest on such amounts.

National Socialist (Nazi) actions or policies include, but are not limited to, actions and policies taken by Germany and other countries, or by organizations and institutions within those countries, against the victims of the Nazi Holocaust.

§ 54A:6-30 Victims of September 11, 2001 terrorist attacks, income exempt from New Jersey gross income tax

1. a. Gross income shall not include the income otherwise taxable under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of any individual who dies as a result of wounds or injury incurred as a result of the terrorist attacks against the United States on September 11, 2001, with respect to the taxpayer's taxable year in which falls the date of death of the taxpayer and with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred.

b. This section shall not apply to any individual identified by the Attorney General of the United States to have been a participant or conspirator in those attacks.

c. The amount of any income tax paid that is excludable pursuant to this section shall be an overpayment for the purposes of N.J.S.54A:9-7, provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. Notwithstanding the periods of limitation for refunds of overpayments set forth in N.J.S.54A:9-8, a claim for a refund of overpayment shall be filed on behalf of a taxpayer within four years after the taxpayer's taxable year in which falls the date of death of the taxpayer.

§ 54A:6-31 Family leave benefits not included in gross income.

16. Gross income shall not include benefits for family temporary disability leave paid pursuant to P.L.1948, c.110 (C.43:21-25 et al.) and P.L.2008, c.17 (C.43:21-39.1 et al.).

§ 54A:6-32 Combat zone compensation not considered gross income.

1. Gross income shall not include amounts received as combat zone compensation by members of the Armed Forces of the United States that is excluded from federal taxable income pursuant to section 112 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.112.

§ 54A:6-33 Gross income, not including compensation for services performed, district board of elections.

3. Gross income, for the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall not include any compensation received pursuant to R.S.19:6-9.1 and R.S.19:45-6 for the services performed by a member of a district board of elections or for such services performed pursuant to subsection d. of section 1 of P.L.2021, c.40 (C.19:15A-1).

§ 54A:6-34 Gross income, certain exemptions, small business stock.

1. Notwithstanding any law or regulation to the contrary, gross income shall not include net gains or income derived from the sale, exchange, or other disposition of qualified small business stock to the extent such gains or income are exempt from federal taxation pursuant to section 1202 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.1202).

Chapter 7

§ 54A:7-1 Requirement of withholding tax from wages.

(a) General.--From and after September 1, 1976, every employer maintaining an office or transacting business within this State and making payment of any wages subject to New Jersey personal income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law" pursuant to R.S.43:21-1 et seq. that is subject to New Jersey personal income tax to a resident or nonresident individual shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due resulting from the inclusion in the employee's New Jersey income of his wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the director, with due regard to the withholding exemptions of the employee.

(b) Withholding exemptions.--For purposes of this section:

An employee shall be entitled to the equivalent of the same number of New Jersey withholding exemptions as the number of withholding exemptions to which he is entitled for Federal income tax withholding purposes. An employer may rely upon the number of Federal withholding exemptions claimed by the employee.

(c) The payor of New Jersey gambling winnings shall withhold New Jersey gross income tax on those winnings at a rate of 3% in all instances where the payor is required to withhold for federal income tax purposes under subsection (q) of section 3402 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.3402), as amended, except that this subsection shall not apply to the New Jersey State Lottery, except if winnings paid by the New Jersey State Lottery are included in gross income pursuant to N.J.S.54A:6-11. The rate of withholding for gambling winnings paid by the New Jersey State Lottery shall be determined by the director.

§ 54A:7-1.1 Voluntary withholding from pensions and annuities

Voluntary withholding from pensions and annuities. a. Every payor of a pension or annuity, under an annuity, endowment or life insurance contract, or payments of any such amounts which are received as pension disability or retirement benefits, to a taxpayer under any public or private plan, shall withhold the amount specified by the recipient of a pension or annuity.

b. The amount to be withheld shall be a minimum of $10.00 per payment period or an even dollar amount greater than the minimum as specified by the recipient of the pension or annuity.

c. The recipient of a pension or annuity shall make a request in writing to the payor for the amount to be withheld on a form and in the manner specified by the director. The amount being withheld may be changed or terminated upon request by the recipient of the pension or annuity in the same manner.

d. The director shall promulgate the regulations necessary to implement voluntary withholding from pensions and annuities.

§ 54A:7-1.2 Entities making payments to unincorporated contractors, 7 percent withholding; exceptions; definitions.

2. a. A person, other than a governmental entity, homeowner, or tenant, maintaining an office or transacting business in this State and making a payment of compensation or remuneration for services rendered in this State to a resident unincorporated contractor or nonresident unincorporated contractor shall deduct and withhold from the payment a tax equal to 7 percent of the amount paid, except as otherwise provided by this section.

b. A person that obtains from its unincorporated contractor proof of the contractor's registration with the Division of Revenue in the Department of the Treasury shall not be required to withhold pursuant to subsection a. of this section. The types of proof required and the length of the retention period of the proofs shall be as prescribed by the Director of the Division of Taxation.

c. Withholding pursuant to subsection a. of this section shall not be required for payments for which withholding is required pursuant to N.J.S.54A:7-1 or such other payments as the director may prescribe by regulation.

d. A person required to deduct and withhold tax from a payment under subsection a. of this section shall furnish to each unincorporated contractor an annual written statement reflecting the total of all payments made and tax withheld in a calendar year on or before February 15 following the close of that calendar year in the form prescribed by the director.

e. Payments to an unincorporated contractor for which withholding is required by subsection a. of this section shall be taxable or subject to employer withholding under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as if no withholding were required by this section, but any amount actually deducted and withheld under this section in any calendar year shall be deemed to have been paid to the director on behalf of the unincorporated contractor from whom withheld, and the contractor shall be credited with having paid that amount for the taxable year beginning in such calendar year.

A person required to deduct and withhold tax under subsection a. of this section shall, for each calendar month, on or before the 15th day of the month following the close of the calendar month, file a return as prescribed by the director and pay over to the director or to a depository designated by the director the amounts required to be deducted and withheld. The director may, if the director believes such action necessary for the protection of the revenues, require a person to make a return and pay to the director the amounts deducted and withheld at any time, or from time to time. The director may, by regulation, require the filing of withholding returns and the payment of withheld amounts on a semimonthly or more frequent basis or require the filing of returns on a quarterly basis, with payments of the amounts withheld on a monthly or more frequent basis, if the director deems such action in the best interest of the State.

Any reconciliation of withholding shall be filed on or before February 15 following the close of the calendar year in accordance with rules and regulations prescribed by the director.

f. If a person required to deduct and withhold tax under subsection a. of this section fails to collect, truthfully account for, pay over the withholding, or make returns of the withholding as required in this section, the director may serve a notice requiring such person to withhold the amounts that become withholdable after service of such notice, to deposit such withholdings in a bank approved by the director in a separate account, in trust for and payable to the State of New Jersey and keep the amount of such withholdings in such account until payment over to the director. Such notice shall remain in effect until a notice of cancellation is served by the director.

g. (1) A person required to deduct and withhold tax under subsection a. of this section is hereby made liable for such withholding, except as that person may be excused from that withholding pursuant to subsection b. of this section.

(2) The owner or lessor of the real property to which construction, improvement, alteration, or repair of a building, structure, or improvement shall be made, required to deduct and withhold tax under subsection a. of this section for a contractor with whom the owner or lessor is in direct privity of contract and who is liable pursuant to paragraph (1) of this subsection for such withholding, is hereby also made liable for that contractor's withholding from a subcontractor, or the subcontractor's withholding from a lower tier subcontractor on that contract, except as the contractor, subcontractor or lower tier subcontractor may be excused from that withholding pursuant to subsection b. of this section.

(3) For purposes of assessment and collection, any tax required to be withheld and paid over to the director and any additions to tax, penalties and interest with respect to that tax shall be considered the tax of that person required to deduct and withhold. Any amount actually withheld under this section shall be held to be a special fund in trust for the director. No unincorporated contractor shall have any right of action against a person required to deduct and withhold an amount of a payment in respect to any moneys deducted and withheld and paid over to the director in compliance or in intended compliance with this section.

h. If a person required to withhold under subsection a. of this section fails to deduct and withhold tax as required, and thereafter the tax against which the tax may be credited is paid, the tax required to be deducted and withheld shall not be collected from the person required to withhold under subsection a. of this section, provided however that the person required to withhold under subsection a. of this section shall not be relieved from liability for any additions to tax, penalties and interest with respect to that tax otherwise applicable in respect of that failure to deduct and withhold.

i. For the purposes of this section:

"Contractor" means a person entering into a contract for services to construct, improve, alter, or repair a building, structure, or improvement to real property and includes a subcontractor, but shall not include professional services as defined in section 1 of P.L.1960, c.40 (C.17:16C-1 );

"Governmental entity" means: the State of New Jersey, or any of its agencies, instrumentalities, public authorities, political subdivisions or public corporations, including a public corporation created pursuant to agreement or compact with another state; the United States of America and any of its agencies and instrumentalities; and the United Nations or any international organization of which the United States of America is a member;

"Homeowner" means an individual who makes a payment to a contractor to construct, improve, alter, or repair a dwelling which the individual owns and in which the individual resides or will reside;

"Subcontractor" means a person entering into a contract with a contractor for services to construct, improve, alter, or repair a building, structure, or improvement to real property, but shall not include professional services as defined in section 1 of P.L.1960, c.40 (C.17:16C-1 );

"Tenant" means an individual who makes a payment to a contractor to construct, improve, alter, or repair a dwelling unit which the individual rents or leases and in which the individual resides or will reside; and

"Unincorporated contractor" means an individual contractor or a contractor organized as a sole proprietorship, a partnership, or any other business form not taxable as a corporation for federal tax purposes.

§ 54A:7-2 Information statement for employee or recipient of other payments, earned income credit.

a. Every employer or payor of a pension or annuity required to deduct and withhold tax under this act from the wages of an employee or from the payment of a pension or annuity, or an employer who would have been required so to deduct and withhold tax if an employee had claimed no more than one withholding exemption, shall furnish to each such employee, or pension or annuity recipient or the estate thereof, in respect of the wages or pension or annuity payments paid by such employer or payor to such employee or pension or annuity recipient during the calendar year on or before February 15 of the succeeding year, or, if his employment or pension or annuity is terminated before the close of such calendar year, within 30 days from the date on which the last payment of the wages or pension or annuity is made, a written statement as prescribed by the director showing the amount of wages or pension or annuity payments paid by the employer or payor to the employee or pension or annuity recipient, the cost of commuter transportation benefits, as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3), excludable by the employee pursuant to section 1 of P.L.1993, c.108 (C.54A:6-23), and the cost of such benefits not so excludable, provided by the employer to the employee, the amount deducted and withheld as tax, the amount deducted and withheld as worker contributions for unemployment and disability insurance as provided under the New Jersey "Unemployment Compensation Law," and such other information as the director shall prescribe.

b. In addition to the statement furnished pursuant to subsection a. of this section, each employer shall notify an employee in writing of the availability of the earned income tax credit under the provisions of section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.32, and the New Jersey earned income tax credit provided in section 2 of P.L.2000, c.80 (C.54A:4-7). The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L.2005, c.210 (C.52:18-11.3) for this purpose. The employer shall notify only those employees whom the employer knows, or reasonably believes, may be eligible for the federal credit based on the wages reported on the statement distributed pursuant to subsection a. of this section.

§ 54A:7-3 Credit for tax withheld

Wages or pensions or annuities upon which tax is required to be withheld shall be taxable under this act as if no withholding were required, but any amount of tax actually deducted and withheld under this act in any calendar year shall be deemed to have been paid to the director on behalf of the person from whom withheld, and such person shall be credited with having paid that amount of tax for the taxable year beginning in such calendar year. For a taxable year of less than 12 months the credit shall be made under regulations of the director.

§ 54A:7-4 Employer's or other payor's return and payment of withheld taxes

(a) General. -- Every employer or payor of a pension or annuity required to deduct and withhold tax under this act shall, for each calendar month, on or before the 15th day of the month following the close of such calendar month, file a withholding return as prescribed by the director and pay over to the director or to a depository designated by the director the taxes so required to be deducted and withheld. Any return due with respect to the last quarter of a calendar year shall be filed and the amount of the withholding shall be paid on or before January 31 next following. The director may, if the director believes such action necessary for the protection of the revenues, require any employer or payor of a pension or annuity to make such return and pay to the director the tax deducted and withheld at any time, or from time to time. Where the amount of wages paid by an employer is not sufficient under this act to require the withholding of tax from the wages of any of that employer's employees, the director may, by regulation, permit such employer to file an annual return on or before February 28 of the following calendar year.

The director may, by regulation, require the filing and payment of withholding returns and taxes on a semimonthly or more frequent basis or require the filing of returns on a quarterly basis, with payments of the taxes withheld on a monthly or more frequent basis, if the director deems such action in the best interest of the State.

(b) Deposit in trust for director. --Whenever any employer or payor of a pension or annuity fails to collect, truthfully account for, pay over the tax, or make returns of the tax as required in this section, the director may serve a notice requiring such employer or payor to collect the taxes which become collectible after service of such notice, to deposit such taxes in a bank approved by the director in a separate account, in trust for and payable to the State of New Jersey and keep the amount of such tax in such account until payment over to the director. Such notice shall remain in effect until a notice of cancellation is served by the director.

§ 54A:7-5 Liability for withheld taxes

Every employer or payor of pension or annuity required to deduct and withhold tax under this act is hereby made liable for such tax. For purposes of assessment and collection, any amount required to be withheld and paid over to the director, and any additions to tax, penalties and interest with respect thereto, shall be considered the tax of the employer or payor. Any amount of tax actually deducted and withheld under this act shall be held to be a special fund in trust for the director. No employee or pension or annuity recipient shall have any right of action against an employer or payor of a pension or annuity in respect to any moneys deducted and withheld from the wages or pension or annuity and paid over to the director in compliance or in intended compliance with this act.

§ 54A:7-6 Failure to withhold

If an employer or payor of a pension or annuity fails to deduct and withhold tax as required, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer or payor, but the employer or payor shall not be relieved from liability for any penalties, interest, or additions to the tax otherwise applicable in respect of such failure to deduct and withhold.

§ 54A:7-7 Filing annual reconciliation of tax withheld

Any reconciliation of tax withheld shall be filed by the employer or payor of a pension or annuity with the Division of Taxation on or before February 15 following the close of the calendar year in accordance with rules and regulations prescribed by the director.

Chapter 8

§ 54A:8-1 Payment of tax; returns; extension of time.

With respect to each taxpayer, the tax imposed by this act shall be due and payable annually, hereafter, in the manner provided in this section:

a. Every taxpayer shall annually pay the tax imposed by this act with respect to all or any part of each of his fiscal or calendar accounting years beginning on and after July 1, 1976, to be computed as in this act provided, for such fiscal or calendar accounting year or part thereof, on a return which shall be filed, in the case of a taxpayer reporting on a calendar year basis, on or before April 15 following the close of such calendar year, or, in the case of a taxpayer reporting on a fiscal year basis, on or before the fifteenth day of the fourth month following the close of such fiscal year, and the full amount of the tax shall be due and payable on or before the date prescribed herein for the filing of the return.

In the case of a taxable year which ends on or after July 1, 1976, and prior to December 31, 1976, an income tax return for such taxable year shall be filed on or before April 15, 1977.

Notwithstanding any law to the contrary, the director may extend either the filing or payment due date, or both, for any return under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to coincide with a similar extended filing or payment due date established for federal personal income tax returns and may adopt the same terms or conditions specified by federal law or regulation for any such filing extension or payment due date.

b. Each return shall carry a signature by the taxpayer certifying that all statements contained therein are true, under the same penalties as for perjury committed. The director is authorized to promulgate regulations and procedures setting forth the manner in which a taxpayer may satisfy the signature requirement. Blank forms of return shall be furnished on application, but failure to secure the form shall not relieve any taxpayer of the obligation of making any return herein required. Subject to regulations under this act and in such form as may be indicated thereby, taxpayers whose net income taxable under this act is or may be subject to tax under a similar law of another jurisdiction may be permitted to file a simple, short form return attached to a copy of his return as filed or about to be filed by him in such other jurisdiction.

Subject to regulations under this act, reasonable extensions of time for good cause shown, may be granted for not more than six months unless exceptional circumstances justify a longer period, within which returns may be filed.

In addition, persons in active service with the Armed Forces of the United States, who may be prevented by distance or injury or hospitalization arising out of such service, may be allowed such extension of time for the filing of returns, without interest or penalty, as may be fixed by regulations under this act.

§ 54A:8-2 Optional tax tables

(a) General.--The director may promulgate uniform tax tables for individual taxpayers for any taxable year. An individual may elect to use or not to use any such tax table for which he is eligible.

(b) Preparation of tax tables.--Tax tables promulgated hereunder shall be based either upon (i) the individual's New Jersey income, or (ii) the individual's taxable income. In computing such tables, the director shall make allowance for the deductions and personal exemptions allowed under this act. In either case the director shall by regulation prescribe the conditions of eligibility for the use of a tax table. In no case shall the amount of tax calculated by use of a tax table deviate by more than $5.00 from the amount otherwise due under section 54A:2-1.

§ 54A:8-3 Accounting periods and methods

54A:10A-3. Accounting periods and methods. (a) Accounting periods. - A taxpayer's taxable year under this act shall be the same as his taxable year for Federal income tax purposes.

(b) Change of accounting periods. - If a taxpayer's taxable year is changed for Federal income tax purposes, his taxable year for purposes of this act shall be similarly changed.

(c) Accounting methods. - A taxpayer's accounting method under this act shall be the same as his accounting method for Federal income tax purposes. In the absence of any accounting method for Federal income tax purposes, New Jersey taxable income shall be computed under such method as in the opinion of the director clearly reflects income.

(d) Change of accounting methods. - (1) If a taxpayer's accounting method is changed for federal income tax purposes, his accounting method for purposes of this act shall be similarly changed.

(2) If a taxpayer's accounting method is changed, other than from an accrual to an installment method, any additional tax which results from adjustments determined to be necessary solely by reason of the change shall not be greater than if such adjustments were ratably allocated and included for the taxable year of the change and the preceding taxable years, not in excess of two, during which the taxpayer used the accounting method from which the change is made.

(3) If a taxpayer's accounting method is changed from an accrual to an installment method, any additional tax for the year of such change of method and for any subsequent year which is attributable to the receipt of installment payments properly accrued in a prior year, shall be reduced by the portion of tax for any prior taxable year attributable to the accrual of such installment payments, in accordance with regulations of the director.

§ 54A:8-3.1 Persons required to file

a. On or before the filing date prescribed in section 1 of this chapter (N.J.S.54A:8-1), an income tax return shall be made and filed by or for:

(1) A taxpayer filing as an unmarried individual, an estate or trust, with a gross income

(a) in excess of $3,000 for taxable years beginning before January 1, 1994,

(b) in excess of $7,500 for taxable years beginning on or after January 1, 1994 but before January 1, 1999, and

(c) in excess of $10,000 for taxable years beginning on or after January 1, 1999;

(2) A taxpayer determining tax pursuant to subsection a. of N.J.S.54A:2-1 having gross income, or a married couple filing a joint return having joint gross income

(a) in excess of $3,000 for taxable years beginning before January 1, 1994,

(b) in excess of $7,500 for taxable years beginning on or after January 1, 1994 but before January 1, 1999,

(c) in excess of $10,000 for taxable years beginning on or after January 1, 1999 but before January 1, 2000,

(d) in excess of $15,000 for taxable years beginning on or after January 1, 2000 but before January 1, 2001, and

(e) in excess of $20,000 for taxable years beginning on or after January 1, 2001; or

(3) A taxpayer who is a married person filing separately with gross income of

(a) in excess of $1,500 for taxable years beginning before January 1, 1994,

(b) in excess of $3,750 for taxable years beginning on or after January 1, 1994 but before January 1, 1999,

(c) in excess of $5,000 for taxable years beginning on or after January 1, 1999 but before January 1, 2000,

(d) in excess of $7,500 for taxable years beginning on or after January 1, 2000 but before January 1, 2001, and

(e) in excess of $10,000 for taxable years beginning on or after January 1, 2001.

b. If the income tax liability of husband and wife is determined on a separate return for federal income tax purposes, they shall each also file a separate return for New Jersey income tax purposes and their income tax liabilities under this act shall be separate.

c. If the income tax liabilities of husband and wife, both residents, are determined on a joint return for federal income tax purposes, they shall also file a joint return for New Jersey income tax purposes and their tax liabilities under this act shall be joint and several.

d. If either husband or wife is a resident and the other is a nonresident, they shall file separate tax returns under this act on such single or separate forms as may be required by the director in which event their tax liabilities shall be separate unless both elect to determine their joint taxable income as if both were residents, in which event their liabilities shall be joint and several.

e. The return for any deceased individual shall be made and filed by his fiduciary or other person charged with his property.

f. The return for an individual who is unable to make a return by reason of minority or other disability shall be made and filed by his fiduciary or other person charged with the care of his person or property (other than a receiver in possession of only a part of his property), or by his duly authorized agent.

g. Any tax under this act, and any increase, interest or penalty thereon, shall, from the time it is due and payable, be a personal debt of the person liable to pay the same, to the State of New Jersey.

h. If both husband and wife are nonresidents but only one spouse earns, receives or acquires income from sources within this State, they shall file separate forms as may be required by the director and their tax liabilities shall be separate, unless both elect to determine their joint taxable income in accord with N.J.S.54A:5-7 and their liabilities under this act shall be joint and several.

§ 54A:8-4 Declarations of estimated tax.

(a) Requirement of filing. Every resident and nonresident individual shall make a declaration of the individual's estimated New Jersey personal income tax for each taxable year beginning after June 30, 1976, if the individual's estimated New Jersey personal income tax can reasonably be expected to be more than $400 in excess of any credits allowable against the individual's tax, whether or not the individual is required to file a federal declaration of estimated tax for such year.

(b) Definition of estimated tax. The term "estimated tax" means the amount which an individual estimates to be the individual's income tax under this act for the taxable year, less the amount which the individual estimates to be the sum of any credits allowable against the tax.

(c) Joint declaration of husband and wife. A husband and wife may make a joint declaration of estimated tax as if they were one taxpayer, in which case the liability with respect to the estimated tax shall be joint and several. No joint declaration may be made if husband and wife are separated under a decree of divorce or of separate maintenance, or if they have different taxable years. If a joint declaration is made but husband and wife elect to determine their taxes under this act separately, the estimated tax for such year may be treated as the estimated tax of either husband or wife, or may be divided between them, as they may elect.

(d) Time for filing declaration. Beginning in the taxable year 1976 and every taxable year thereafter a declaration of estimated tax of an individual other than a farmer shall be filed on or before April 15 of the taxable year, except that if the requirements of subsection (a) are first met:

(1) After April 1 and before June 2 of the taxable year, the declaration shall be filed on or before June 15; or

(2) After June 1 and before September 2 of the taxable year the declaration shall be filed on or before September 15; or

(3) After September 1 of the taxable year, the declaration shall be filed on or before January 15 of the succeeding year.

(e) Declaration of estimated tax by a farmer. A declaration of estimated tax of an individual having an estimated New Jersey income from farming (including oyster farming) for the taxable year which is at least two-thirds of the individual's total estimated New Jersey income for the taxable year may be filed at any time on or before January 15 of the succeeding year, in lieu of the time otherwise prescribed.

(f) Declaration of estimated tax of $400 or less. A declaration of estimated tax of an individual having a total estimated tax for the taxable year of $400 or less may be filed at any time on or before January 15 of the succeeding year under regulations of the director.

(g) Amendments of declaration. An individual may amend a declaration under regulations of the director.

(h) Return as declaration or amendment. If on or before February 15 of the succeeding taxable year an individual files his return for the taxable year for which the declaration is required, and pays therewith the full amount of the tax shown to be due on the return:

(1) Such return shall be considered as his declaration if no declaration was required to be filed during the taxable year, but is otherwise required to be filed on or before January 15;

(2) Such return shall be considered as the amendment permitted by subsection (g) to be filed on or before January 15 if the tax shown on the return is greater than the estimated tax shown in a declaration previously made.

(i) Fiscal year. This section shall apply to a taxable year other than a calendar year by the substitution of the months of such fiscal year for the corresponding months specified in this section.

(j) Short taxable year. An individual having a taxable year of less than 12 months shall make a declaration in accordance with regulations of the director.

(k) Declaration for individual under a disability. The declaration of estimated tax for an individual who is unable to make a declaration by reason of minority or other disability shall be made and filed by the individual's guardian, committee, fiduciary or other person charged with the care of the individual's person or property (other than a receiver in possession of only a part of the individual's property), or by the individual's duly authorized agent.

(l) In the taxable year 1976, no declaration shall be required until the lapse of at least one full calendar quarter following enactment of this act.

(m) This section shall also apply to an estate or trust taxpayer other than an estate or trust that meets the two-year limitation and other criteria of paragraph (2) of subsection (l) of section 6654 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.6654.

§ 54A:8-5 Payments of estimated tax

(a) General. The estimated tax with respect to which a declaration is required shall be paid as follows:

(1) If the declaration is filed on or before April 15 of the taxable year the estimated tax shall be paid in four equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second, third and fourth installments shall be paid on the following June 15, September 15, and January 15, respectively.

(2) If the declaration is filed after April 15 and not after June 15 of the taxable year, the estimated tax shall be paid in three equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second and third installments shall be paid on or before the following September 15 and January 15, respectively.

(3) If the declaration is filed after June 15 and not after September 15 of the taxable year, and is not required to be filed on or before June 15 of the taxable year, the estimated tax shall be paid in two equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second shall be paid on or before the following January 15.

(4) If the declaration is filed after September 15 of the taxable year, and is not required to be filed on or before September 15 of the taxable year, the estimated tax shall be paid in full at the time of the filing of the declaration.

(5) If the declaration is filed after the time prescribed therefor, or after the expiration of any extension of time therefor, paragraphs (2), (3), and (4) of this subsection shall not apply, and there shall be paid at the time of such filing all installments of estimated tax payable at or before such time, and the remaining installments shall be paid at the times at which, and in the amounts in which, they would have been payable if the declaration had been filed when due.

(b) Farmers. If an individual referred to in subsection (e) of section 54A:8-4 (relating to income from farming) makes a declaration of estimated tax after September 15 of the taxable year and on or before the following January 15, the estimated tax shall be paid in full at the time of the filing of the declaration.

(c) Amendments of declaration. If any amendment of a declaration is filed, the remaining installments, if any, shall be ratably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment, and if any amendment is made after September 15 of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.

(d) Application to short taxable year. This section shall apply to a taxable year of less than 12 months in accordance with regulations of the director.

(e) Fiscal year. This section shall apply to a taxable year other than a calendar year by the substitution of the months of such fiscal year for the corresponding months specified in this section.

(f) Installments paid in advance. An individual may elect to pay any installment of his estimated tax prior to the date prescribed for its payment.

§ 54A:8-6 Requirements concerning returns, notices, records and statements.

(a) General. The director may prescribe regulations as to the keeping of records, the content and form of returns and statements, and the filing of copies of federal income tax returns and determinations. The director may require any person, by regulation or notice served upon such person, to make such returns, render such statements, or keep such records, as the director may deem sufficient to show whether or not such person is liable under this act for tax or for collection of tax.

(b) Partnerships. (1) Each entity classified as a partnership for federal income tax purposes, including but not limited to a partnership, a limited liability partnership, or a limited liability company, having a resident owner of an interest in the entity or having any income derived from New Jersey sources, shall make a return for the taxable year setting forth all items of income, gain, loss and deduction and such other pertinent information as the director may by regulations and instructions prescribe. The director shall prescribe a State return form that, at a minimum, includes the name and address of each partner, member, or other owner of an interest in the entity however designated, of the entity for taxable years ending on or after December 31, 1994. Such return shall be filed on or before the fifteenth day of the fourth month following the close of each taxable year.

(2) (A) Each entity classified as a partnership for federal income tax purposes, other than an investment club, having any income derived from New Jersey sources, including but not limited to a partnership, a limited liability partnership, or a limited liability company, that has more than two owners shall at the prescribed time for making the return required under this subsection make a payment of a filing fee of $150 for each owner of an interest in the entity, up to a maximum of $250,000. For the purposes of this paragraph, "investment club" means an entity: that is classified as a partnership for federal income tax purposes; all of the owners of which are individuals; all of the assets of which are securities, cash, or cash equivalents; the market value of the total assets of which do not exceed, as measured on the last day of its taxable year, an amount equal to the lesser of $250,000 or $35,000 per owner of the entity; and which is not required to register itself or its membership interests with the federal Securities and Exchange Commission; provided that beginning with taxable years commencing on or after January 1, 2003 the director shall prescribe the total asset value amounts which shall apply by increasing the $250,000 total asset amount and the per owner $35,000 amount hereinabove by an inflation adjustment factor, which amounts shall be rounded to the next highest multiple of $100. The inflation adjustment factor shall be equal to the factor calculated by dividing the consumer price index for urban wage earners and clerical workers for the nation, as prepared by the United States Department of Labor for September of the calendar year prior to the calendar year in which the taxable year begins, by that index for September of 2001;

(B) Each entity required to make a payment pursuant to subparagraph (A) of this paragraph shall also make, at the same time as making its payment pursuant to subparagraph (A) of this paragraph, an installment payment of its filing fee for the succeeding return period in an amount equal to 50% of the amount required to be paid pursuant to subparagraph (A). The amount of the installment payment shall be credited against the amount of the filing fee due for the succeeding return period, or, if the amount of the installment payment exceeds the amount of the filing fee due for the succeeding return period, successive return periods.

(C) Notwithstanding the provisions of R.S.54:48-2 and R.S.54:48-4 to the contrary, the fee required pursuant to subparagraph (A) of this paragraph and the installment payment required pursuant to subparagraph (B) of this paragraph shall, for purposes of administration, be payments to which the provisions of the State Uniform Tax Procedure Law, R.S.54:28-1 et seq., shall be applicable and the collection thereof may be enforced by the director in the manner therein provided.

(3) Each entity required to file a return under this subsection for any taxable year shall, on or before the day on which the return for the taxable year is required to be filed, furnish to each person who is a partner or other owner of an interest in the entity however designated, or who holds an interest in such entity as a nominee for another person at any time during that taxable year a copy of such information required to be shown on such return as the director may prescribe.

(4) For the purposes of this subsection, "taxable year" means a year or period which would be a taxable year of the partnership if it were subject to tax under this act.

(c) Information at source. The director may prescribe regulations and instructions requiring returns of information to be made and filed on or before February 15 of each year as to the payment or crediting in any calendar year of amounts of $100.00 or more to any taxpayer under this act. Such returns may be required of any person, including lessees or mortgagors of real or personal property, fiduciaries, employers, and all officers and employees of this State, or of any municipal corporation or political subdivision of this State, having the control, receipt, custody, disposal or payment of interest, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments or other fixed or determinable gains, profits or income, except interest coupons payable to bearer. A duplicate of the statement as to tax withheld on wages, required to be furnished by an employer to an employee, shall constitute the return of information required to be made under this section with respect to such wages.

(d) Notice of qualification as receiver, et cetera. Every receiver, trustee in bankruptcy, assignee for benefit of creditors, or other like fiduciary shall give notice of his qualification as such to the director, as may be required by regulation.

§ 54A:8-6.1 Certain tax preparers required to use electronic methods for filing.

4. a. (1) Notwithstanding any other law to the contrary, for New Jersey gross income tax returns for taxable years beginning in 2006, if a tax preparer prepared or filed 100 or more gross income tax returns for the prior taxable year, the tax preparer shall use electronic methods for filing the returns and paying the tax for all the returns prepared or filed by the tax preparer for a taxable year, subject to such exceptions as the Director of the Division of Taxation may determine are reasonable. The director may exercise discretion to extend this requirement to a tax preparer that has prepared or filed 100 or more gross income tax returns for any of the five prior taxable years.

(2) The director is authorized to extend by regulation the electronic methods filing requirement, commencing with New Jersey gross income tax returns filed for taxable years beginning in 2007, to tax preparers that prepared or filed 50 or more gross income tax returns for the prior taxable year. The director , by regulation, may exercise discretion to extend this requirement to a tax preparer that has prepared or filed 50 or more gross income tax returns for any of the five prior taxable years.

b. As used in this section, "tax preparer" means any person who prepares for compensation, or who employs one or more persons to prepare for compensation, any return of tax or claim for refund under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

c. The director shall determine the method or methods of electronic filing of returns and paying tax that satisfy the requirements imposed in this section including a procedure by which a taxpayer may elect that the tax preparer not file the taxpayer's return by electronic methods.

d. The director is authorized to determine if the requirements of this section shall apply to declarations and payments of estimated tax made by a tax preparer. To the extent that the director determines it will not be unduly burdensome, the director is authorized to require employers and payors of gambling winnings that withhold tax under N.J.S.54A:7-1, and payors of voluntary withholdings under section 1 of P.L.1989, c.328 (C.54A:7-1.1), to file returns and pay tax by electronic methods.

e. A tax preparer, employer or payor, other than an individual taxpayer preparing the taxpayer's own gross income tax return or a tax preparer preparing a return pro bono, failing to use electronic methods as required in this section shall be liable for the penalties provided in subsection b. of R.S.54:49-4 or as otherwise provided under the State Uniform Tax Procedure Law, R.S.54:48-1 et seq.

§ 54A:8-6.2 Status of health care coverage, question on the New Jersey Gross Income Tax return, determination of eligibility; definitions.

7. a. Beginning with the 2008 tax year and for each tax year thereafter, the Department of the Treasury shall require that each individual who files a resident New Jersey Gross Income Tax return indicate on the taxpayer's income tax return whether the taxpayer and dependents, if applicable, has health insurance coverage on the date of filing of the return.

b. The department shall transmit to the Department of Human Services information permitting the Department of Human Services to identify taxpayers who are uninsured and may be eligible to enroll in the Medicaid or NJ FamilyCare program. The Department of Human Services shall use this information in furtherance of its Medicaid and NJ FamilyCare outreach and enrollment initiative established pursuant to section 26 of P.L.2008, c.38 (C.30:4J-18).

c. As used in this section:

"Medicaid" means the New Jersey Medical Assistance and Health Services Program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

"NJ FamilyCare" or "program" means the NJ FamilyCare Program established pursuant to P.L.2005, c.156 (C.30:4J-8 et al.).

§ 54A:8-7 Report of change in federal taxable income or credit

a. Report of change in federal taxable income or credit. If the amount of a taxpayer's federal taxable income or earned income tax credit reported on the taxpayer's federal income tax return for any taxable year is changed or corrected by the United States Internal Revenue Service or other competent authority, or as the result of a renegotiation of a contract or subcontract with the United States, the taxpayer shall report such change or correction in federal taxable income or earned income tax credit within 90 days after the final determination of such change, correction, or renegotiation, or as otherwise required by the director, and shall concede the accuracy of such determination or state wherein it is erroneous. Any taxpayer filing an amended federal income tax return, including a return or other information filed pursuant to section 6225(c) of the Internal Revenue Code (26 U.S.C. s. 6225(c)), shall also file within 90 days thereafter an amended return under this act, and shall give such information as the director may require. The director may by regulation prescribe such exceptions to the requirements of this section as the director deems appropriate.

b. A partnership shall report the Final Federal Adjustments from a federal partnership audit or administrative adjustment request pursuant to section 6225(a)(1) of the Internal Revenue Code (26 U.S.C. s.6225(a)(1)) by filing the Federal Adjustments Report as prescribed by the director within 90 days after the Final Determination Date of the federal adjustments arising from a partnership-level audit.

c. The director may assess the federally audited partnership, partners, or both, for taxes they owe, using the best information available, even if the partnership or tiered partner fails to timely make any report required by this section for any reason.

d. The director shall adopt rules and regulations the director may deem necessary to effectuate the provisions of this section.

§ 54A:8-8 Definitions relative to payment of estimated gross income tax on real property sales by nonresidents.

1. As used in P.L.2004, c.55 (C.54A:8-8 et seq.):

"Administrative costs" means an amount equal to $10.00 per estimated gross income tax form filed with a county recording officer, which may be retained by the county treasurer from the estimated gross income tax payment accompanying such form to provide the resources necessary to offset the additional direct expenditures incurred by the county recording officer and the county treasurer for the implementation of their responsibilities under P.L.2004, c.55 (C.54A:8-8 et seq.);

"County recording officer" means the register of deeds and mortgages in counties having such an officer and the county clerk in the other counties;

"Date of sale or transfer" means the date the deed affecting the conveyance is delivered by the seller or transferor to the transferee;

"Gain" on the sale or transfer of real property means the amount determined pursuant to section 1001 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1001, as that section applies to the sale or transfer of real property;

"Nonresident taxpayer" means:

a. an individual who qualifies as a nonresident taxpayer as defined in subsection (n) of N.J.S.54A:1-2, and an estate or trust that qualifies as a nonresident estate or trust as defined in subsection (p) of N.J.S.54A:1-2; or

b. An individual who is not domiciled in New Jersey but who may be considered a resident of New Jersey for tax purposes under paragraph (2) of subsection m. of N.J.S.54A:1-2 at the end of a taxable year, by virtue of maintaining a permanent place of abode in New Jersey for substantially all of the taxable year and by spending in aggregate more than 183 days of the taxable year in New Jersey, unless the individual has already qualified as a resident on the date of sale or transfer of real property;

"Sale or transfer of real property" means the change of ownership of a fee simple interest in real property by any method; and

"Seller or transferor" means the individual, estate or trust making the sale or transfer of a fee simple interest in real property.

§ 54A:8-9 Payment of estimated tax by nonresident taxpayer on certain gains.

2. a. A nonresident taxpayer shall estimate and pay the gross income tax liability on the gain, if any, upon the sale or transfer of real property within this State. A nonresident taxpayer shall estimate the gross income tax due on a form prescribed by the director, using an estimated tax rate that is equal to the highest rate of tax for the taxable year provided in N.J.S.54A:2-1. The estimated tax due shall equal the gain, if any, multiplied by that rate. The amount of gain used in the computation shall equal the amount of gain reportable for federal income tax purposes for the taxable year, but the estimated tax payment shall not be less than 2% of the consideration for the sale or transfer stated in the deed affecting the conveyance.

b. If the real property sold or transferred is located partly with and partly without this State, the nonresident taxpayer shall estimate the tax due using only the portion of the gain reasonably attributable to the portion of the real property located within this State.

c. If the nonresident is an estate or trust, the taxpayer shall estimate the tax due based upon the gain, if any, computed without reduction for any distribution of income to the beneficiaries during the taxable year in which the sale or transfer occurred.

§ 54A:8-10 Filing of estimated tax form required, exceptions.

3. a. A nonresident taxpayer shall file the estimated tax form with the county recording officer, along with the payment of any estimated tax due, at the time the deed is filed with the county recording officer for recording using the procedures prescribed in such form and accompanying instructions as the director shall prescribe. The nonresident taxpayer shall make that estimated tax payment payable to the Department of the Treasury for the estimated tax which payment shall be separate from any other payment required to be made by the seller or transferor pursuant to law. Except for a nonresident taxpayer who meets one of the exemptions provided in subsection b. of this section, a nonresident taxpayer who is a seller or transferor of real property within this State shall file the estimated tax form, whether or not they have a gain on the sale or transfer.

b. The requirements of this section shall not apply if:

(1) the real property being sold or transferred is used exclusively as the principal residence of the seller or transferor within the meaning of section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.121;

(2) the seller or transferor is a mortgagor conveying the mortgaged property to a mortgagee in foreclosure or in a transfer in lieu of foreclosure with no additional consideration; or

(3) the seller or transferor, or transferee is an agency or authority of the United States of America, an agency or authority of the State of New Jersey, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or a private mortgage insurance company.

c. The principal residence exemption set forth in paragraph (1) of subsection b. of this section, shall apply only if the property sold or transferred was used exclusively as the principal residence of the seller or transferor. If the real property sold or transferred includes both the principal residence and other real property, the taxpayer shall file and pay the estimated tax due based upon the gain on the other real property.

d. A county recording officer shall not record or accept for recording any deed for the sale or transfer of real property subject to P.L.2004, c.55 (C.54A:8-8 et seq.), unless accompanied by a form prescribed by the director pursuant to subsection a. of this section and the payment of any estimated tax shown as payable on such form, or unless such form includes a certification by the seller or transferor on the deed who is an individual, estate or trust that this section is not applicable to the sale or transfer. The method for the certification under this subsection shall be set forth in forms and instructions as shall be prescribed by the director.

e. A county recording officer shall act as an agent of the director for purposes of collecting the estimated gross income tax, if any, shown to be payable upon the form prescribed pursuant to subsection a. of this section. The director, by regulation, shall prescribe one or more methods for the county recording officer's collection of such estimated tax. Every county recording officer shall account for and remit to the county treasurer any funds collected and any returns filed with such county recording officer and the county treasurer shall remit those returns and those funds, net of administrative costs, to the director on such days as the director shall set by regulation consistent with the administration of the provisions of P.L.1968, c.49 (C.46:15-5 et seq.) as amended and supplemented. Every county recording officer also shall follow such procedures and keep such records in respect to the implementation of this section as the director may prescribe.

f. A county recording officer shall not be liable under this section for any inaccuracy in any statement on the form prescribed pursuant to subsection a. of this section or in the amount of estimated gross income tax a county recording officer shall collect under this section so long as the county recording officer shall collect the estimated gross income tax shown as payable on such form.

g. If a deed is recorded notwithstanding an omission or inaccuracy in the form prescribed pursuant to subsection a. of this section or in any certification by the transferor on such form or a deficiency in the payment of estimated gross income tax required by this section, the recording of such deed shall not be invalidated by reason of such omission, inaccuracy, erroneous certification or deficiency nor shall the title founded on such deed be impaired thereby.

h. If there has been an overpayment of tax required to be paid through the estimated tax payments made with the filing of the deed, the overpayment of tax may be refunded prior to the filing of a gross income tax return under such requirements and in a manner as the director shall prescribe, but no interest shall be allowed or paid on such overpayment.

Chapter 9

§ 54A:9-1 Applicability of State Tax Uniform Procedure Law.

The taxes imposed by this act shall be governed in all respects by the provisions of the State Tax Uniform Procedure Law (subtitle 9 of Title 54 of the Revised Statutes) except only to the extent that a specific provision of this act may be in conflict therewith.

§ 54A:9-2 Notice of deficiency.

(a) General. If upon examination of a taxpayer's return under this act the director determines that there is a deficiency of income tax, he may mail a notice of deficiency to the taxpayer. If a taxpayer fails to file an income tax return required under this act, the director is authorized to estimate the taxpayer's New Jersey income and tax thereon, from any information in his possession, and to mail a notice of deficiency to the taxpayer. A notice of deficiency shall be mailed to the taxpayer at his last known address in or out of this State. If a husband and wife are jointly liable for tax, a notice of deficiency may be a single joint notice, except that if the director has been notified in writing by either spouse that separate residences have been established, then, in lieu of the single joint notice, a duplicate original of the joint notice shall be mailed to each spouse at his or her last known address in or out of this State. If the taxpayer is deceased or under a legal disability, a notice of deficiency may be mailed to his last known address in or out of this State, unless the director has received written notice of the existence of a fiduciary relationship with respect to the taxpayer.

(b) Notice of deficiency as assessment. After 90 days from the mailing of a notice of deficiency, such notice shall be an assessment of the amount of tax specified in such notice, together with the interest, additions to tax and penalties stated in such notice, except only for any such tax or other amounts as to which the taxpayer has within such 90-day period filed with the director a petition under section 54A:9-9. If the notice of deficiency is addressed to a person outside of the United States, such period shall be 150 days instead of 90 days.

(c) Restrictions on assessment and levy. No assessment of a deficiency in tax and no levy or proceeding in court for its collection shall be made, begun or prosecuted, except as otherwise provided in section 54A:9-14, until a notice of deficiency has been mailed to the taxpayer, nor until the expiration of the time for filing a petition contesting such notice, nor, if a petition with respect to the taxable year has been filed with the director, until the decision of the director has become final. For exception in the case of review of the decision of the director, see subsection (c) of section 54A:9-10.

(d) Exceptions for mathematical errors. If a mathematical error appears on a return (including an overstatement of the credit for income tax withheld at the source, or of the amount paid as estimated income tax), the director shall notify the taxpayer that an amount of tax in excess of that shown upon the return is due, and that such excess has been assessed. Such notice shall not be considered as a notice of deficiency for the purposes of this section, subsection (e) of section 54A:9-8 (limiting credits or refunds after petition to the director), or subsection (b) of section 54A:9-9 (authorizing the filing of a petition with the director based on a notice of deficiency) nor shall such assessment or collection be prohibited by the provisions of subsection (c).

(e) Exception where change in Federal taxable income is not reported.

(1) If the taxpayer fails to comply with section 54A:8-7 in not reporting a change or correction increasing his Federal taxable income as reported on his Federal income tax return or in not reporting a change or correction which is treated in the same manner as if it were a deficiency for Federal income tax purposes or in not filing an amended return, instead of the mode and time of assessment provided for in subsection (b) of this section, the director may assess a deficiency based upon such changed or corrected Federal taxable income by mailing to the taxpayer a notice of additional tax due specifying the amount of the deficiency, and such deficiency, together with the interest, additions to tax and penalties stated in such notice, shall be deemed assessed on the date such notice is mailed unless within 30 days after the mailing of such notice a report of the Federal change or correction or an amended return, where such return was required by section 54A:8-7, is filed accompanied by a statement showing wherein such Federal determination and such notice of additional tax due are erroneous.

(2) Such notice shall not be considered as a notice of deficiency for the purposes of this section, subsection (e) of section 54A:9-8 (limiting credits or refunds after petition to the director), or subsection (b) of section 54A:9-9 (authorizing the filing of a petition with the director based on a notice of deficiency), nor shall such assessment or the collection thereof be prohibited by the provisions of subsection (c).

(3) If a husband and wife are jointly liable for tax, a notice of additional tax due may be a single joint notice, except that if the director has been notified in writing by either spouse that separate residences have been established, then, in lieu of the joint notice, a duplicate original of the joint notice shall be mailed to each spouse at his or her last known address in or out of this State. If the taxpayer is deceased or under a legal disability, a notice of additional tax due may be mailed to his last known address in or out of this State, unless the director has received written notice of the existence of a fiduciary relationship with respect to the taxpayer.

(f) Waiver of restrictions. The taxpayer shall at any time (whether or not a notice of deficiency has been issued) have the right to waive the restrictions on assessment and collection of the whole or any part of the deficiency by a signed notice in writing filed with the director.

(g) Deficiency defined. For purposes of this act, a deficiency means the amount of the tax imposed by this act, less (i) the amount shown as the tax upon the taxpayer's return (whether the return was made or the tax computed by him or by the director), and less (ii) the amounts previously assessed (or collected without assessment) as a deficiency and plus (iii) the amount of any rebates. For the purpose of this definition, the tax imposed by this act and the tax shown on the return shall both be determined without regard to payments on account of estimated tax or the credit for withholding tax; and a rebate means so much of an abatement, credit, refund or other repayment (whether or not erroneous) made on the ground that the amounts entering into the definition of a deficiency showed a balance in favor of the taxpayer.

§ 54A:9-3 Assessment.

(a) Assessment date. The amount of tax which a return shows to be due, or the amount of tax which a return would have shown to be due but for a mathematical error, shall be deemed to be assessed on the date of filing of the return (including any amended return showing an increase of tax). In the case of a return properly filed without computation of tax, the tax computed by the director shall be deemed to be assessed on the date on which payment is due. If a notice of deficiency has been mailed, the amount of the deficiency shall be deemed to be assessed on the date specified in subsection (b) of section 54A:9-2 if no petition to the director is filed, or if a petition is filed, then upon the date when a decision of the director establishing the amount of the deficiency becomes final. If an amended return or report filed pursuant to section 54A:8-7 concedes the accuracy of a Federal change or correction, any deficiency in tax under this act resulting therefrom shall be deemed to be assessed on the date of filing such report or amended return, and such assessment shall be timely notwithstanding section 54A:9-4. If a notice of additional tax due, as prescribed in subsection (e) of section 54A:9-2 has been mailed, the amount of the deficiency shall be deemed to be assessed on the date specified in such subsection unless within 30 days after the mailing of such notice a report of the Federal change or correction or an amended return, where such return was required by section 54A:8-7 is filed accompanied by a statement showing wherein such Federal determination and such notice of additional tax due are erroneous. Any amount paid as a tax or in respect of a tax, other than amounts withheld at the source or paid as estimated income tax, shall be deemed to be assessed upon the date of receipt of payment, notwithstanding any other provisions.

(b) Other assessment powers. If the mode or time for the assessment of any tax under this act (including interest, additions to tax and assessable penalties) is not otherwise provided for, the director may establish the same by regulations.

(c) Estimated income tax. No unpaid amount of estimated tax under section 54:8-5 shall be assessed.

(d) Supplemental assessment. The director may, at any time within the period prescribed for assessment, make a supplemental assessment, subject to the provisions of section 54A:9-2 where applicable, whenever it is ascertained that any assessment is imperfect or incomplete in any material respect.

§ 54A:9-4 Limitations on assessment.

(a) General. Except as otherwise provided in this section, any tax under this act shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed).

(b) Time return deemed filed.

(1) Early return. For purposes of this section a return of income tax, except withholding tax, filed before the last day prescribed by law or by regulations promulgated pursuant to law for the filing thereof, shall be deemed to be filed on such last day.

(2) Return of withholding tax. For purposes of this section, if a return of withholding tax for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, such return shall be deemed to be filed on April 15 of such succeeding calendar year.

(c) Exceptions.

(1) Assessment at any time. The tax may be assessed at any time if--

(A) No return is filed,

(B) A false or fraudulent return is filed with intent to evade tax, or

(C) The taxpayer fails to comply with N.J.S.54A:8-7, in not reporting a change or correction increasing the taxpayer's Federal taxable income as reported on his Federal income tax return, or in not reporting a change or correction which is treated in the same manner as if it were a deficiency for Federal income tax purposes, in not filing an amended return, or, for both partners and partnerships, in not reporting final federal adjustments resulting from a partnership audit pursuant to section 6225(a)(1) of the Internal Revenue Code (26 U.S.C. s. 6225(a)(1)).

(2) Extension by agreement. Where, before the expiration of the time prescribed in this section for the assessment of tax, both the director and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(3) Report of changed or corrected Federal income. If the taxpayer shall, pursuant to subsection a. of N.J.S.54A:8-7, report a change or correction or file an amended return increasing the taxpayer's Federal taxable income or report a change or correction which is treated in the same manner as if it were a deficiency for Federal income tax purposes, the assessment (if not deemed to have been made upon the filing of the report or amended return) may be made at any time within 2 years after such report or amended return was filed. The amount of such assessment of tax shall not exceed the amount of the increase in New Jersey tax attributable to such Federal change or correction. The provisions of this paragraph shall not affect the time within which or the amount for which an assessment may otherwise be made.

(4) Recovery of erroneous refund. An erroneous refund shall be considered an underpayment of tax on the date made, and an assessment of a deficiency arising out of an erroneous refund may be made at any time within 3 years from the making of the refund, except that the assessment may be made within 5 years from the making of the refund if it appears that any part of the refund was induced by fraud or misrepresentation of a material fact.

(5) Request for prompt assessment. If a return is required for a decedent or for the decedent's estate during the period of administration, the tax shall be assessed within 18 months after written request therefor (made after the return is filed) by the executor, administrator or other person representing the estate of such decedent, but not more than 3 years after the return was filed, except as otherwise provided in this subsection and subsection (d).

(6) Final federal adjustments resulting from a Federal Partnership Audit. Tax may be assessed against the partnership, direct or indirect partners, or both, within two years of the time that a partnership files a Federal Adjustments Report as required by N.J.S.54A:8-7 that includes Final Federal Adjustments from a federal partnership audit or administrative adjustments request that would result in additional New Jersey income tax for one or more direct or indirect partners.

(d) Omission of income on return. The tax may be assessed at any time within 6 years after the return was filed if--

(1) An individual omits from his New Jersey income an amount properly includible therein which is in excess of 25% of the amount of New Jersey income stated in the return; or

(2) An estate or trust omits income from its return in an amount in excess of 25% of its income determined as if it were an individual, computing his New Jersey income under this act.

For purposes of this subsection there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the director of the nature and amount of such item.

(e) Suspension of running of period of limitation. The running of the period of limitations on assessment or collection of tax or other amount (or of a transferee's liability) shall, after the mailing of a notice of deficiency, be suspended for the period during which the director is prohibited under subsection (c) of section N.J.S.54A:9-2 from making the assessment or from collecting by levy.

§ 54A:9-5 Interest on underpayment.

(a) General. If any amount of income tax is not paid on or before the last date prescribed in this act for payment, interest on such amount at the rate as is required under the State Tax Uniform Procedure Law, R.S.54:48-1 et seq. If the time for filing of a return of tax withheld by an employer is extended, the employer shall pay interest for the period for which the extension is granted and may not charge such interest to the employee.

(b) Exception as to estimated tax. This section shall not apply to any failure to pay estimated tax under section 54A:8-5.

(c) (Deleted by amendment, P.L.1987, c.76.)

(d) (Deleted by amendment, P.L.1987, c.76.)

(e) Suspension of interest on deficiencies. If a waiver of restrictions on assessment of a deficiency has been filed by the taxpayer, and if notice and demand by the director for payment of such deficiency is not made within 30 days after the filing of such waiver, interest shall not be imposed on such deficiency for the period beginning immediately after such 30th day and ending with the date of notice and demand.

(f) Interest treated as tax. Interest under this section shall be paid upon notice and demand and shall be assessed, collected and paid in the same manner as income tax. Any reference in this act to the tax imposed by this act shall be deemed also to refer to interest imposed by this section on such tax.

(g) (Deleted by amendment, P.L.1992, c.175.)

(h) Payment prior to notice of deficiency. If, prior to the mailing to the taxpayer of a notice of deficiency under subsection (b) of section 54A:9-2, the director mails to the taxpayer a notice of proposed increase of tax and within 30 days after the date of the notice of proposed increase the taxpayer pays all amounts shown on the notice to be due to the director, no interest under this section on the amount so paid shall be imposed for the period after the date of such notice of proposed increase.

(i) Payment within 10 days after notice and demand. If notice and demand is made for payment of any amount under subsection (b) of section 54A:9-12, and if such amount is paid within 10 days after the date of such notice and demand, interest under this section on the amount so paid shall not be imposed for the period after the date of such notice and demand.

(j) Limitation on assessment and collection. Interest prescribed under this section may be assessed and collected at any time during the period within which the tax or other amount to which such interest relates may be assessed and collected, respectively.

(k) Interest on erroneous refund. Any portion of tax or other amount which has been erroneously refunded, and which is recoverable by the director, shall bear interest as is required under the State Tax Uniform Procedure Law, R.S.54:48-1 et seq.

(l) Satisfaction by credits. If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this section on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment.

§ 54A:9-6 Additions to tax and civil penalties.

(a) Failure to file tax return. In case of failure to file a tax return under this act on or before the prescribed date (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return such amount as is required under the State Tax Uniform Procedure Law, R.S.54:48-1 et seq. For this purpose, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return.

(b) Deficiency due to negligence. If any part of a deficiency is due to negligence or intentional disregard of this act or rules or regulations hereunder (but without intent to defraud), there shall be added to the tax an amount equal to 10% of the deficiency.

(c) Failure to file declaration or underpayment of estimated tax. If any taxpayer fails to file a declaration of estimated tax or fails to pay all or any part of an installment of estimated tax, the taxpayer shall be deemed to have made an underpayment of estimated tax except as provided pursuant to subsection (d) of this section. There shall be added to the tax for the taxable year an amount at the rate as is required under the State Tax Uniform Procedure Law, R.S.54:48-1 et seq., upon the amount of the underpayment for the period of the underpayment but not beyond the 15th day of the fourth month following the close of the taxable year. The amount of underpayment shall be the excess of the lesser of: (1) the amount of the installment which would be required to be paid if the estimated tax were equal to 80% of the tax (two-thirds of the tax for farmers referred to in subsection (e) of section 54A:8-4) shown on the return for the taxable year (or if no return was filed, of the tax for such year), or (2) 100% of the tax shown on the tax return of the taxpayer for the preceding taxable year; over the amount, if any, of the installment paid on or before the last day prescribed for such payment. No underpayment shall be deemed to exist with respect to a declaration or installment otherwise due on or after the taxpayer's death.

(d) Exception to addition for underpayment of estimated tax. The addition to tax under subsection (c) with respect to any underpayment of any installment shall not be imposed if the total amount of all payments of estimated tax and all payments of tax made pursuant to subsection a. of section 12 of P.L.2002, c.40 (C.54:10A-15.11) and credited to the taxpayer pursuant to subsection b. of section 12 of P.L.2002, c.40 made on or before the last date prescribed for the payment of such installment equals or exceeds whichever of the following set forth in paragraphs (1) and (2) and subject to paragraph (3) is the lesser--

(1) The amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the least--

(A) An amount equal to 100% of the tax shown on the return of the taxpayer for the preceding taxable year, except as provided pursuant to paragraph (3) of this subsection, if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and such preceding year was a taxable year of 12 months, or

(B) An amount equal to 100% of the tax computed, except as provided pursuant to paragraph (3) of this subsection, at the rates applicable to the taxable year, on the basis of the taxpayer's status with respect to the taxpayer's personal exemptions for the taxable year, but otherwise on the basis of the facts shown on the taxpayer's return for, and the law applicable to, the preceding taxable year, or

(C) An amount equal to 80% of the tax for the taxable year (two-thirds of the tax for farmers referred to in subsection (e) of section 54A:8-4) computed by placing on an annualized basis the income for the months in the taxable year ending before the month in which the installment is required to be paid (or, in the case of a trust or estate, the income for the months ending before the date one month before the month in which the installment is required). For purposes of this subparagraph, the income shall be placed on an annualized basis by--

(i) Multiplying by 12 (or, in the case of a taxable year of less than 12 months, the number of months in the taxable year) the income for the months in the taxable year ending before the month in which the installment is required to be paid (or, in the case of a trust or estate, the income for the months ending before the date one month before the month in which the installment is required),

(ii) Dividing the resulting amount by the number of months in the taxable year ending before the month in which such installment date falls (or, in the case of a trust or estate, the number of months ending before the date one month before the month in which such installment date falls), and

(iii) Deducting from such amount the deductions for personal exemptions allowable for the taxable year (such personal exemptions being determined as of the last date prescribed for payment of the installment); or

(2) An amount equal to 90% of the tax computed, at the rates applicable to the taxable year, on the basis of the actual income for the months in the taxable year ending before the month in which the installment is required to be paid.

(3) If the taxable gross income shown on the return of the taxpayer for the preceding taxable year exceeds $150,000 ($75,000 in the case of a married individual within the meaning of section 7703 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.7703, filing separately for the taxable year for which the amount of the installment is being determined) subparagraphs (A) and (B) of paragraph (1) of this subsection shall be applied by substituting "110%" for "100%". For purposes of this paragraph, "taxable gross income" means gross income after any allowable deductions under chapter 3 or 3A of the "New Jersey Gross Income Tax Act" (C.54A:3-1 et seq. or 54A:3A-1 et seq.); or, in the case of a trust or estate, gross income after any allowable deductions or exemptions, income commissions and amounts distributed or credited to beneficiaries; and "gross income" for a nonresident means gross income calculated as if such nonresident were a resident.

(e) Deficiency due to fraud. If any part of a deficiency is due to fraud, there shall be added to the tax an amount equal to 50% of the deficiency. This amount shall be in lieu of any other addition to tax imposed by subsection (a) or (b).

(f) Nonwillful failure to pay withholding tax. If any employer, without intent to evade or defeat any tax imposed by this act or the payment thereof, shall fail to make a return and pay a tax withheld by him at the time required by or under the provisions of section 54A:7-4, such employer shall be liable for such tax and shall pay the same together with interest thereon and the addition to tax provided in subsection (a), and such interest and addition to tax shall not be charged to or collected from the employee by the employer. The director shall have the same rights and powers for the collection of such tax, interest and addition to tax against such employer as are now prescribed by this act for the collection of tax against an individual taxpayer.

(g) Willful failure to collect and pay over tax. Any person required to collect, truthfully account for, and pay over the tax imposed by this act who willfully fails to collect such tax or truthfully account for and pay over such tax or willfully attempts in any manner to evade or defeat the tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No addition to tax under subsection (b) or (c) shall be imposed for any offense to which this subsection applies.

(h) Failure to file certain information returns. In case of each failure to file a statement of a payment to another person, required under authority of subsection (c) of section 54A:8-6 (relating to information at source, including the duplicate statement of tax withheld on wages) on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice and demand by the director and in the same manner as tax, be paid by the person so failing to file the statement, a penalty of $2.00 for each statement not so filed, but the total amount imposed on the delinquent person for all such failures during any calendar year shall not exceed $2,000.00.

(i) Additional penalty. Any person who with fraudulent intent shall fail to pay, or to deduct or withhold and pay, any tax, or to make, render, sign or certify any return or declaration of estimated tax or to supply any information within the time required by or under this act, shall be liable to a penalty of not more than $5,000.00, in addition to any other amounts required under this act, to be imposed, assessed and collected by the director. The director shall have the power, in his discretion, to waive, reduce or compromise any penalty under this subsection.

(j) Additions treated as tax. The additions to tax and penalties provided by this section shall be paid upon notice and demand and shall be assessed, collected and paid in the same manner as taxes and any reference in this act to income tax or tax imposed by this act, shall be deemed also to refer to the additions to tax and penalties provided by this section. For purposes of section 54A:9-2, this subsection shall not apply to:

(1) Any addition to tax under subsection (a) except as to that portion attributable to a deficiency;

(2) Any addition to tax under subsection (e); and

(3) Any additional penalty under subsection (i).

(k) Determination of deficiency. For purposes of subsections (b) and (c), the amount shown as the tax by the taxpayer upon his return shall be taken into account in determining the amount of the deficiency only if such return was filed on or before the last day prescribed for the filing of such return, determined with regard to any extension of time for such filing.

(l) Person defined. For purposes of subsections (f), (g), (h) and (i), the term person or employer includes an individual, corporation or partnership or an officer or employee of any corporation (including a dissolved corporation) or a member or employee of any partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

§ 54A:9-7 Overpayment.

(a) General. The director, within the applicable period of limitations may credit an overpayment of income tax against any liability in respect of any tax imposed by the tax law on the person who made the overpayment, and the balance shall be refunded by the comptroller out of the proceeds of the tax retained by him for such general purpose. Any refund under this section shall be made only upon the filing of a return and upon a certificate of the director approved by the comptroller. The State Treasurer, as a condition precedent to the approval of such a certificate, may examine into the facts as disclosed by the return of the person who made the overpayment and other information and data available in the files of the director.

(b) Excessive withholding. If the amount allowable as a credit for tax withheld from the taxpayer exceeds his tax to which the credit relates, the excess shall be considered an overpayment.

(c) Overpayment by employer. If there has been an overpayment of tax required to be deducted and withheld under N.J.S.54A:7-4, refund shall be made to the employer only to the extent that the amount of the overpayment was not deducted and withheld by the employer.

(d) Credits against estimated tax. The director may prescribe regulations providing for the crediting against the estimated income tax for any taxable year of the amount determined to be an overpayment of the income tax for a preceding taxable year. If any overpayment of income tax is so claimed as a credit against estimated tax for the succeeding taxable year, such amount shall be considered as a payment of the income tax for the succeeding taxable year (whether or not claimed as a credit in the declaration of estimated tax for such succeeding taxable year), and no claim for credit or refund of such overpayment shall be allowed for the taxable year for which the overpayment arises.

(e) Rule where no tax liability. If there is no tax liability for a period in respect of which an amount is paid as income tax, such amount shall be considered an overpayment.

(f) Under regulations prescribed by the director with approval of the State Treasurer interest shall be allowed and paid at the rate determined by the director to be equal to the prime rate pursuant to R.S.54:48-2 upon any overpayment in respect of the tax imposed by this act, determined for each month or fraction thereof, compounded annually at the end of each year, from the date that such interest commences to accrue to the date of refund; but no interest shall be allowed or paid on an overpayment of less than $1.00, nor upon any overpayment refunded within six months after the last date prescribed, or permitted by extension of time, for filing the return or within six months after the return is filed, whichever is later.

§ 54A:9-8 Limitations on credit or refund

(a) General. Claim for credit or refund of an overpayment of income tax shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed, within 2 years from the time the tax was paid. If the claim is filed within the 3-year period, the amount of the credit or refund shall not exceed the portion of the tax paid within the 3 years immediately preceding the filing of the claim plus the period of any extension of time for filing the return. If the claim is not filed within the 3-year period, but is filed within the 2-year period, the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim. Except as otherwise provided in this section, if no claim is filed, the amount of a credit or refund shall not exceed the amount which would be allowable if a claim had been filed on the date the credit or refund is allowed.

(b) Extension of time by agreement. If an agreement under the provisions of paragraph (2) of subsection (c) of N.J.S.54A:9-4 (extending the period for assessment of income tax) is made within the period prescribed in subsection (a) for the filing of a claim for credit or refund, the period for filing a claim for credit or refund, or for making credit or refund if no claim is filed, shall not expire prior to 6 months after the expiration of the period within which an assessment may be made pursuant to the agreement or any extension thereof. The amount of such credit or refund shall not exceed the portion of the tax paid after the execution of the agreement and before the filing of the claim or the making of the credit or refund, as the case may be, plus the portion of the tax paid within the period which would be applicable under subsection (a) if a claim had been filed on the date the agreement was executed.

(c) Notice of change or correction of Federal income. If a taxpayer is required by N.J.S.54A:8-7 to report a change or correction in Federal taxable income reported on the taxpayer's Federal income tax return, or to report a change or correction which is treated in the same manner as if it were an overpayment for Federal income tax purposes, or to file an amended return with the director, claim for credit or refund of any resulting overpayment of tax shall be filed by the taxpayer within 2 years from the time the notice of such change or correction or such amended return was required to be filed with the director. The amount of such credit or refund shall not exceed the amount of the reduction in tax attributable to such Federal change, correction or items amended on the taxpayer's amended Federal income tax return. This subsection shall not affect the time within which or the amount for which a claim for credit or refund may be filed apart from this subsection.

(d) Failure to file claim within prescribed period. No credit or refund shall be allowed or made, except as provided in subsection (e) of this section or subsection (d) of N.J.S.54A:9-10, after the expiration of the applicable period of limitation specified in this act, unless a claim for credit or refund is filed by the taxpayer within such period. Any later credit shall be void and any later refund erroneous. No period of limitations specified in any other law shall apply to the recovery by a taxpayer of moneys paid in respect of taxes under this act.

(e) Effect of petition to director. If a notice of deficiency for a taxable year has been mailed to the taxpayer under N.J.S.54A:9-2 and if the taxpayer files a timely petition with the director under N.J.S.54A:9-9, the director may determine that the taxpayer has made an overpayment for such year (whether or not the director also determines a deficiency for such year). No separate claim for credit or refund for such year shall be filed, and no credit or refund for such year shall be allowed or made, except--

(1) As to overpayments determined by a decision of the director which has become final; and

(2) As to any amount collected in excess of an amount computed in accordance with the decision of the director which has become final; and

(3) As to any amount claimed as a result of a change or correction described in subsection (c).

(f) Limit on amount of credit or refund. The amount of overpayment determined under subsection (e) shall, when the decision of the director has become final, be credited or refunded in accordance with subsection (a) of section N.J.S. 54A:6-6 and shall not exceed the amount of tax which the director determines as part of the director's decision was paid--

(1) After the mailing of the notice of deficiency; or

(2) Within the period which would be applicable under subsections (a), (b) or (c), if on the date of the mailing of the notice of a deficiency a claim had been filed (whether or not filed) stating the grounds upon which the director finds that there is an overpayment.

(g) Early return. For purposes of this section, any return filed before the last day prescribed for the filing thereof shall be considered as filed on such last day, determined without regard to any extension of time granted the taxpayer.

(h) Prepaid income tax. For purposes of this section, any tax paid by the taxpayer before the last day prescribed for its payment, any income tax withheld from the taxpayer during any calendar year, and any amount paid by the taxpayer as estimated income tax for a taxable year shall be deemed to have been paid by the taxpayer on the fifteenth day of the fourth month following the close of the taxpayer's taxable year with respect to which such amount constitutes a credit or payment.

(i) Return and payment of withholding tax. Notwithstanding subsection (h), for purposes of this section with respect to any withholding tax--

(1) If a return for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, such return shall be considered filed on April 15 of such succeeding calendar year; and

(2) If a tax with respect to remuneration paid during any period ending with or within a calendar year is paid before April 15 of the succeeding calendar year, such tax shall be considered paid on April 15 of such succeeding calendar year.

(j) Final federal adjustments resulting from a partnership audit or administrative adjustments request. If a partnership files a Federal Adjustments Report with final federal adjustments resulting from a partnership audit or administrative adjustments request that do not result in a federal imputed underpayment, and which are not taken into account by the partnership in the federal adjustment year partnership return, then the partners may claim a credit or refund of the related State tax by filing an amended return or other schedule as required by the director. The amount of such credit or refund shall not exceed the amount of the reduction in New Jersey tax attributable to such final federal adjustments. This subsection shall not affect the time within which or the amount for which a claim for credit or refund may be filed apart from this subsection.

§ 54A:9-8.1 Setoff of indebtedness to State agencies; precedence of child support indebtedness.

1. a. Whenever any taxpayer or resident shall be entitled to any refund of taxes pursuant to the "New Jersey Gross Income Tax Act" (N.J.S.54A:1-1 et seq.), including an earned income tax credit provided as a refund pursuant to P.L.2000, c.80 (C.54A:4-6 et al.), or whenever any individual is eligible to receive a rebate pursuant to section 3 of P.L.2020, c.94 (C.54A:9-30), or a homestead rebate or credit pursuant to P.L.1990, c.61 (C.54:4-8.57 et al.), P.L.1999, c.63 (C.54:4-8.58a et al.), P.L.2004, c.40 or P.L.2007, c.62 (C.18A:7F-37 et al.), and if the rebate or credit is not required to be paid over to the municipal tax collector under the provisions of section 8 of P.L.1990, c.61 (C.54:4-8.64), and at the same time the taxpayer or resident shall be indebted to any agency or institution of State Government, to the Victims of Crime Compensation Board for the portion of an assessment ordered pursuant to section 2 of P.L.1979, c.396 (C.2C:43-3.1) for deposit in the Victims of Crime Compensation Board Account or restitution ordered to be paid to the board pursuant to N.J.S.2C:44-2 for deposit in the Victims of Crime Compensation Board Account, or for child support under Title IV-A, Title IV-D, or Title IV-E of the federal Social Security Act (42 U.S.C. s.601 et seq.), or other indebtedness in accordance with section 1 of P.L.1995, c.290 (C.2A:17-56.11b) the Department of the Treasury shall apply or cause to be applied the refund, homestead rebate or credit, or all, or so much of any or all as shall be necessary, to satisfy the indebtedness. Child support indebtedness shall take precedence over all other indebtedness. The Department of the Treasury shall retain a percentage of the proceeds of any collection setoff as shall be necessary to provide for any expenses of the collection effort.

b. A State department or agency which is owed a debt shall notify the Department of the Treasury of the existence of the debt and shall request that the Department of the Treasury execute a setoff as provided for in this section.

§ 54A:9-8.2 Regulations for procedures and methods.

2. The Department of the Treasury shall promulgate regulations concerning the procedures and methods to be employed by all agencies and institutions in the executive branch in the collection or the setting off of delinquent accounts. The regulations shall be consistent with all federal requirements or limitations regarding any information utilized in any collection or setoff, and shall in addition provide for due notice to the debtor and opportunity for a hearing upon request prior to any setoff; safeguards against the disclosure or inappropriate use of any personally identifiable information regarding the debtor obtained or maintained pursuant to this act; and the appropriate apportionment of any setoff in the case of a debtor's joint filing of a joint income tax return or homestead rebate or credit application.

§ 54A:9-8.3 Appropriation of sums collected

Any sums collected by the Department of the Treasury on behalf of State agencies or institutions during the fiscal year in which this act takes effect are appropriated for the expense of the collection effort.

§ 54A:9-8.4 Definitions relative to multistate personal income tax refund setoff program; authorization, procedure.

1. a. As used in this section:

"Taxpayer" means any person identified by a claimant state, under this section, as owing taxes to that claimant state, including the spouse of the taxpayer if the spouse filed a joint return with the taxpayer for the tax year for which tax is owed.

"Claimant state" means any other state of the United States, the City of Philadelphia, Pennsylvania, New York City, New York, or the District of Columbia that extends a like comity for the collection of tax owed to this State.

"Taxes" means any amount of tax imposed on the income of an individual or an estate and paid by the individual or estate under the laws of the claimant state, including any additions to tax for penalties and interest, which is finally due and payable to the claimant state, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed, and which is legally enforceable under the laws of the claimant state, whether or not there is an outstanding judgment for such sum.

"Refund" means any taxpayer's claim to repayment of an overpayment of gross income tax determined by this State to be owed to the taxpayer by this State, after the overpayment has been applied to any other debt of the taxpayer to this State.

"Tax officer" means a unit or official of a claimant state, or the duly authorized agent of such unit or official, charged with the imposition, assessment or collection of taxes of that state.

b. Upon the request and certification of the tax officer of a claimant state, the director may withhold all or a portion of any refund to which such taxpayer would otherwise be entitled and pay a withheld amount to the claimant state, in accordance with the provisions of this section. The director shall not withhold a refund unless the laws of the claimant state: allow the director to certify that an individual or an estate owes gross income tax, including any additions to tax for penalties and interest, to this State and to request that the tax officer of the claimant state withhold all or a portion of any claim to repayment of an overpayment of tax imposed on the income of an individual or an estate and paid by the individual or estate under the laws of the claimant state to which such person would otherwise be entitled and provide for the payment of such withheld amount to this State.

c. A certification from a claimant state shall include the full name and address of the taxpayer; the taxpayer's Social Security number or federal employer identification number; the amount of individual income tax owed to that state, including a detailed statement for each taxable period showing tax, interest and penalty; and a statement that any administrative or judicial remedies, or both, have been exhausted or have lapsed and that the amount of individual income tax is legally enforceable under the laws of that state.

d. Upon receipt by the director of the required certification, the director shall notify the taxpayer: that the director received a request to withhold the refund; that the taxpayer has the right to protest the withholding of the refund; that failure to file a protest in accordance with subsection e. of this section shall constitute a waiver of any demand against this State on account of the withheld amount; and that the withheld amount will be paid to the claimant state. The notice shall include a copy of the certification by the tax officer of the claimant state. Ninety-one days after the date on which it is mailed, a notice under this subsection shall be final, except only for such amounts as to which the taxpayer has filed a written protest with the director, as provided in subsection e. of this section.

e. A taxpayer notified in accordance with subsection d. of this section may, on or before the ninetieth day after the mailing of the notice by the director, protest the withholding of a refund, by filing with the director a written protest in which the taxpayer shall set forth the grounds on which the protest is based. If a timely protest is filed, the director shall impound the claimed amount of the refund and send a copy of the protest to the claimant state for determination of the protest on its merits in accordance with the laws of that state. The director shall pay the impounded amount to the taxpayer, if the claimant state fails, within 45 days of the director mailing the copy of the protest to the claimant state, to certify that the claimant state has reviewed the grounds on which the protest is based and to recertify the amount of taxes which is finally due and payable to the claimant state.

f. Subject to the provisions of subsections d. and e. of this section, the director shall: pay the claimant state the entire amount withheld or the amount certified, whichever is less; pay any refund in excess of the certified amount to the taxpayer; and, if the amount certified exceeds the amount withheld, withhold amounts from subsequent refunds due to the taxpayer, provided that claimant state agrees to withhold subsequent claims to repayment of an overpayment of tax imposed on the income of an individual or an estate and paid by the individual or estate under the laws of the claimant state due to persons certified by the director as owing gross income tax to this State.

g. For any refund amount paid to a claimant state under this section, interest as provided under section 7 of P.L.1992, c.175 (C.54:49-15.1) or subsection (f) of N.J.S.54A:9-7 shall not be allowed or paid to the claimant state, the taxpayer, or any other person or entity.

h. The director may enter into agreements with the tax officers of claimant states relating to procedures and methods to be employed by a claimant state with respect to: the operation of this section; safeguards against the disclosure or inappropriate use of any tax record information that identifies, directly or indirectly, a particular taxpayer; and a minimum amount of taxes owed by a taxpayer to a claimant state, so that, if a taxpayer owes less than that amount to such claimant state, the claimant state will not avail itself of the provisions of this section with respect to that taxpayer.

i. The collection procedures prescribed by this section shall not be construed as a substitute for any other remedy available by law to the director.

§ 54A:9-9 Petition to director.

(a) General. The form of a petition to the director, and further proceedings before the director in any case initiated by the filing of a petition, shall be governed by such rules as the director shall prescribe. No petition shall be deemed in whole or in part without opportunity for a hearing on reasonable prior notice. Such hearing shall be conducted by the director, or by a hearing officer designated by him to take evidence and report to the director. The director shall decide the case as quickly as practicable. Notice of the decision shall be mailed promptly to the taxpayer at his last known address, and such notice shall set forth the director's findings of fact and a brief statement of the grounds of decision in each case decided in whole or in part adversely to the taxpayer.

(b) Petition for redetermination of a deficiency. Within 90 days, or 150 days if the notice is addressed to a person outside of the United States, after the mailing of the notice of deficiency authorized by section 54A:9-2, the taxpayer may file a petition with the director for a redetermination of the deficiency. Such petition may also assert a claim for refund for the same taxable year or years, subject to the limitations of subsection (f) of section 54A:9-8.

(c) Petition for refund. A taxpayer may file a petition with the director for the amounts asserted in a claim for refund if--

(1) The taxpayer has filed a timely claim for refund with the director;

(2) The taxpayer has not previously filed with the director a timely petition under subsection (b) for the same taxable year unless the petition under this subsection relates to a separate claim for credit or refund properly filed under subsection (e) of section 54A:9-8; and

(3) Either (A) 6 months have expired since the claim was filed, or (B) the director has mailed to the taxpayer a notice of disallowance of such claim in whole or in part.

No petition under this subsection shall be filed more than 2 years after the date of mailing of a notice of disallowance, unless prior to the expiration of such 2-year period it has been extended by written agreement between the taxpayer and the director. If a taxpayer files a written waiver of the requirement that he be mailed a notice of disallowance, the 2-year period prescribed by this subsection for filing a petition for refund shall begin on the date such waiver is filed.

(d) Assertion of deficiency after filing petition.--

(1) Petition for redetermination of deficiency. If a taxpayer files with the director a petition for redetermination of a deficiency, the director shall have power to determine a greater deficiency than asserted in the notice of deficiency and to determine if there should be assessed any addition to tax or penalty provided in section 54A:9-6, if claim therefor is asserted at or before the hearing under rules of the director.

(2) Petition for refund. If the taxpayer files with the director a petition for credit or refund for a taxable year, the director may

(A) Determine a deficiency for such year as to any amount of deficiency asserted at or before the hearing under rules of the director, and within the period in which an assessment would be timely under section 54A:9-4, or

(B) Deny so much of the amount for which credit or refund is sought in the petition, as is offset by other issues pertaining to the same taxable year which are asserted at or before the hearing under rules of the director.

(3) Opportunity to respond. A taxpayer shall be given a reasonable opportunity to respond to any matters asserted by the director under this subsection.

(4) Restriction on further notices of deficiency. If the taxpayer files a petition with the director under this section, no notice of deficiency under section 54A:9-2 may thereafter be issued by the director for the same taxable year, except in case of fraud or with respect to a change or correction in Federal taxable income required to be reported under section 54A:8-7.

(e) Burden of proof. In any case before the director under this act, the burden of proof shall be upon the petitioner except for the following issues, as to which the burden of proof shall be upon the director:

(1) Whether the petitioner has been guilty of fraud with intent to evade tax;

(2) Whether the petitioner is liable as the transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax; and

(3) Whether the petitioner is liable for any increase in a deficiency where such increase is asserted initially after a notice of deficiency was mailed and a petition under this section filed, unless such increase in deficiency is the result of a change or correction of Federal taxable income required to be reported under section 54A:8-7, and of which change or correction the director had no notice at the time he mailed the notice of deficiency.

(f) Evidence of related Federal determination. Evidence of a Federal determination relating to issues raised in a case before the director under this section shall be admissible, under rules established by the director.

(g) Jurisdiction over other years. The director shall consider such facts with relation to the taxes for other years as may be necessary correctly to determine the tax for the taxable year, but in so doing shall have no jurisdiction to determine whether or not the tax for any other year has been overpaid or underpaid.

§ 54A:9-10 Appeal to tax court, claim for refund.

(a) Appeal to tax court. Any aggrieved taxpayer may, within 90 days after any decision, order, finding, assessment or action of the Director of the Division of Taxation made pursuant to the provisions of this act, appeal therefrom to the tax court in accordance with the provisions of the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq.

(b) Any aggrieved taxpayer that has neither protested or appealed from an additional assessment of tax may, pursuant to subsection b. of R.S.54:49-14, file a claim for refund of the assessment paid.

(c) Appeal exclusive remedy of taxpayer. The appeal provided by this section shall be the exclusive remedy available to any taxpayer for review of a decision of the director in respect of the determination of the liability of the taxpayer for the taxes imposed by this act.

(d) Credit, refund or abatement after review. If the amount of a deficiency determined by the director is disallowed in whole or in part, the amount so disallowed shall be credited or refunded to the taxpayer, without the making of claim therefor, or, if payment has not been made, shall be abated.

(e) Date of finality of director's decision. A decision of the director shall become final upon the expiration of the period specified in subsection (a) for filing a complaint with the tax court, if no such complaint has been filed within such time, or if such complaint has been duly made, upon expiration of the time for all further appeals, or upon the rendering by the director of a decision in accordance with the mandate of the tax court or the courts on appeal. Notwithstanding the foregoing, for the purpose of forming a complaint, the decision of the director shall be deemed final on the date the notice of decision is sent by mail to the taxpayer.

§ 54A:9-11 Mailing rules; holidays.

(a) Timely mailing. If any claim, statement, notice, petition, or other document (including to the extent authorized by the director, a return or a declaration of estimated tax) required to be filed within a prescribed period or on or before a prescribed date under authority of any provision of this act is, after such period or such date, delivered by United States mail to the director, bureau, office, officer or person with which or with whom such document is required to be filed, the date of the United States postmark stamped on the envelope shall be deemed to be the date of delivery. This subsection shall apply only if the postmark date falls within the prescribed period or on or before the prescribed date for the filing of such document, determined with regard to any extension granted for such filing, and only if such document was deposited in the mail, postage prepaid, properly addressed to the director, bureau, office, officer or person with which or with whom the document is required to be filed. If any document is sent by United States registered mail, such registration shall be prima facie evidence that such document was delivered to the director, bureau, office, officer or person to which or to whom addressed. To the extent that the director shall prescribe by regulation, certified mail may be used in lieu of registered mail under this section. This subsection shall apply to the case of postmarks not made by the United States Post Office only if and to the extent provided by regulations of the director.

(b) Last known address. For purposes of this act, a taxpayer's last known address shall be the address given in the last return filed by him, unless subsequently to the filing of such return the taxpayer shall have notified the director of a change of address.

(c) Last day a Saturday, Sunday or legal holiday. When the last day prescribed under authority of this act (including any extension of time) for performing any act falls on Saturday, Sunday, or a legal holiday in the State of New Jersey, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday or a legal holiday.

§ 54A:9-12 Collection, levy and liens

(a) Collection procedures. The taxes imposed by this act shall be collected by the director, and he may establish the mode or time for the collection of any amount due him under this act if not otherwise specified. The director shall, upon request, give a receipt for any sum collected under this act. The director may authorize banks or trust companies which are depositaries or financial agents of the State to receive and give a receipt for any tax imposed under this act in such manner, at such times, and under such conditions as the director may prescribe; and the director shall prescribe the manner, times and conditions under which the receipt of such tax by such banks and trust companies is to be treated as payment of such tax to the director.

(b) Notice and demand for tax. The director shall as soon as practicable give notice to each person liable for any amount of tax, addition to tax, penalty or interest, which has been assessed but remains unpaid, stating the amount and demanding payment thereof. Such notice shall be left at the dwelling or usual place of business of such person or shall be sent by mail to such person's last known address. Except where the director determines that collection would be jeopardized by delay, if any tax is assessed prior to the last date (including any date fixed by extension) prescribed for payment of such tax, payment of such tax shall not be demanded until after such date.

(c) Issuance of Certificate of Debt after notice and demand. If any person liable under this act for the payment of any tax, addition to tax, penalty or interest neglects or refuses to pay the same within 10 days after the notice and demand therefor is given to such person under subsection (b), the director may within 6 years after the date of such assessment issue a certificate of debt, pursuant to the State Tax Uniform Procedure Law (Subtitle 9 of Title 54 of the Revised Statutes).

(d) Taxpayer not a resident. Where a notice and demand under subsection (b) shall have been given to a taxpayer who is not then a resident, and it appears to the director that it is not practicable to find in this State property of the taxpayer sufficient to pay the entire balance of tax or other amount owing by such taxpayer who is not then a resident, the director may, in accordance with subsection (c), issue a certificate of debt. Thereupon the director may authorize the institution of any action or proceeding to collect or enforce the certificate of debt in any place and by any procedure that a civil certificate of debt of the Superior Court of the State of New Jersey could be collected or enforced. The director may also, in his discretion, designate agents or retain counsel for the purpose of collecting, outside the State of New Jersey, any unpaid taxes, additions to tax, penalties or interest which have been assessed under this act against taxpayers who are not residents of this State, may fix the compensation of such agents and counsel to be paid out of money appropriated or otherwise lawfully available for payment thereof, and may require of them bonds or other security for the faithful performance of their duties, in such form and in such amount as the director shall deem proper and sufficient.

(e) Action by State for recovery of taxes. Action may be brought by the Attorney General at the instance of the director in the name of the State to recover the amount of any unpaid taxes, additions to tax, penalties or interest which have been assessed under this act within 6 years prior to the date the action is commenced.

(f) Actions for collection of tax. (1) At the request of the Division of Taxation, the Attorney General may bring suit, in the name of this State, in the appropriate court of any other state to collect any tax legally due this State under this act.

(2) The courts of this State shall recognize and enforce liabilities for taxes lawfully imposed by any other state, upon incomes, which extends a like comity to this State, and the duly authorized officer of any such state may sue for the collection of such a tax in the courts of this State. A certificate by the secretary of state of such other state that an officer suing for the collection of such a tax is duly authorized to collect the same shall be conclusive proof of such authority.

(3) For the purposes of this section, the words "tax" and "taxes" shall include interest and penalties due under this act, and liability for such interest or penalties or both, due under a taxing statute of another state shall be recognized and enforced by the courts of this State to the same extent that the laws of such other state permit the enforcement in its courts of liability for such interest or penalties or both, due under this act.

(g) Renewal and release of lien. Within 20 years from the date of the filing or from the date of the last extension of the lien, the lien may be extended by the filing of a new warrant with the county recording officer. The director if he finds that the interests of the State will not thereby be jeopardized, and upon such conditions as he may require, may release any property from the lien of any warrant for unpaid taxes, additions to tax, penalties and interest filed pursuant to this section, and such release may be recorded in the office of any recording officer in which such warrant has been filed.

§ 54A:9-13 Transferees.

(a) General. The liability, at law or in equity, of a transferee of property of a taxpayer for any tax, additions to tax, penalty or interest due the director under this act, shall be assessed, paid, and collected in the same manner and subject to the same provisions and limitations as in the case of the tax to which the liability relates, except that the period of limitations for assessment against the transferee shall be extended by 1 year for each successive transfer, in order, from the original taxpayer to the transferee involved, but not by more than 3 years in the aggregate. The term transferee includes, donee, heir, legatee, devisee and distributee.

(b) Exceptions.

(1) If before the expiration of the period of limitations for assessment of liability of the transferee, a claim has been filed by the director in any court against the original taxpayer or the last preceding transferee based upon the liability of the original taxpayer, then the period of limitation for assessment of liability of the transferee shall in no event expire prior to 1 year after such claim has been finally allowed, disallowed or otherwise disposed of.

(2) If, before the expiration of the time prescribed in subsection (a) or the immediately preceding paragraph of this subsection for the assessment of the liability, the director and the transferee have both consented in writing to its assessment after such time, the liability may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. For the purpose of determining the period of limitation on credit or refund to the transferee of overpayments of tax made by such transferee or overpayments of tax made by the transferor as to which the transferee is legally entitled to credit or refund, such agreement and any extension thereof shall be deemed an agreement and extension thereof referred to in subsection (b) of section 54A:9-8. If the agreement is executed after the expiration of the period of limitation for assessment against the original taxpayer, then in applying the limitations under subsection (b) of section 54A:9-8 on the amount of the credit or refund, the periods specified in subsection (a) of section 54A:9-8 shall be increased by the period from the date of such expiration to the date of the agreement.

(c) Deceased transferor. If any person is deceased, the period of limitation for assessment against him shall be the period that would be in effect if he had lived.

(d) Evidence. Notwithstanding the provisions of R.S. 54:50-8 of the State Tax Uniform Procedure Law, Subtitle 9 of Title 54 of the Revised Statutes, the director shall use his powers to make available to the transferee evidence necessary to enable the transferee to determine the liability of the original taxpayer and of any preceding transferees, but without undue hardship to the original taxpayer or preceding transferee. See subsection (e) of section 54A:9-9 for rule as to burden of proof.

§ 54A:9-14 Jeopardy assessment.

(a) Authority for making. If the director believes that the assessment or collection of a deficiency will be jeopardized by delay, he shall, notwithstanding the provisions of N.J.S. 54A:9-2 and N.J.S. 54A:9-16, immediately assess such deficiency (together with all interests, penalties and additions to tax provided for by law), and notice and demand shall be made by the director for the payment thereof.

(b) Notice of deficiency. If the jeopardy assessment is made before any notice in respect of the tax to which the jeopardy assessment relates has been mailed under N.J.S. 54A:9-2, then the director shall mail a notice under such section within 60 days after the making of the assessment.

(c) Amount assessable before decision of director. The jeopardy assessment may be made in respect of a deficiency greater or less than of which notice is mailed to the taxpayer and whether or not the taxpayer has theretofore filed a petition with the director. The director may, at any time before rendering his decision, abate such assessment, or any unpaid portion thereof, to the extent that he believes the assessment to be excessive in amount. The director may in his decision redetermine the entire amount of the deficiency and of all amounts assessed at the same time in connection therewith.

(d) Amount assessable after decision of director. If the jeopardy assessment is made after the decision of the director is rendered, such assessment may be made only in respect of the deficiency determined by the director in his decision.

(e) Expiration of right to assess. A jeopardy assessment may not be made after the decision of the director has become final or after the taxpayer has filed a complaint with the tax court for review of the decision of the director.

(f) Collection of unpaid amounts. When a petition has been filed with the director and when the amount which should have been assessed has been determined by a decision of the director which has become final, then any unpaid portion, the collection of which has been stayed by bond, shall be collected as part of the tax upon notice and demand from the director, and any remaining portion of the assessment shall be abated. If the amount already collected exceeds the amount determined as the amount which should have been assessed, such excess shall be credited or refunded to the taxpayer as provided in N.J.S. 54A:9-7 without the filing of claim therefor. If the amount determined as the amount which should have been assessed is greater than the amount actually assessed, then the difference shall be assessed and shall be collected as part of the tax upon notice and demand from the director.

(g) Abatement if jeopardy does not exist. The director may abate the jeopardy assessment if he finds that jeopardy does not exist. Such abatement may not be made after a decision of the director in respect of the deficiency has been rendered or, if no petition is filed with the director, after the expiration of the period for filing such petition. The period of limitation on the making of assessments and levy or a proceeding for collection, in respect of any deficiency, shall be determined as if the jeopardy assessment so abated had not been made, except that the running of such period shall in any event be suspended for the period from the date of such jeopardy assessment until the expiration of the tenth day after the day on which such jeopardy assessment is abated.

(h) Bond to stay collection. The collection of the whole or any amount of any jeopardy assessment may be stayed by filing with the director, within such time as may be fixed by regulation, a bond in an amount equal to the amount as to which the stay is desired, conditioned upon the payment of the amount (together with interest thereon) the collection of which is stayed at the time at which, but for the making of the jeopardy assessment, such amount would be due. Upon the filing of the bond the collection of so much of the amount assessed as is covered by the bond shall be stayed. The taxpayer shall have the right to waive such stay at any time in respect of the whole or any part of the amount covered by the bond, and if as a result of such waiver any part of the amount covered by the bond is paid, then the bond shall, at the request of the taxpayer, be proportionately reduced. If any portion of the jeopardy assessment is abated, or if a notice of deficiency under N.J.S. 54A:9-2 is mailed to the taxpayer in a lesser amount, the bond shall, at the request of the taxpayer, be proportionately reduced.

(i) Petition to director. If the bond is given before the taxpayer has filed his petition under N.J.S. 54A:9-9, the bond shall contain a further condition that if a petition is not filed within the period provided in such section, then the amount, the collection of which is stayed by the bond, will be paid on notice and demand at any time after the expiration of such period, together with interest thereon from the date of the jeopardy notice and demand to the date of notice and demand under this subsection. The bond shall be conditioned upon the payment of so much of such assessment (collection of which is stayed by the bond) as is not abated by a decision of the director which has become final. If the director determines that the amount assessed is greater than the amount which should have been assessed, then the bond shall, at the request of the taxpayer, be proportionately reduced when the decision of the director is rendered.

(j) Stay of sale of seized property pending director's decision. Where a jeopardy assessment is made, the property seized for the collection of the tax shall not be sold--

(1) If subsection (b) is applicable, prior to the issuance of the notice of deficiency and the expiration of the time provided in N.J.S. 54A:9-9 for filing a petition with the director, and

(2) If a petition is filed with the director (whether before or after the making of such jeopardy assessment), prior to the expiration of the period during which the assessment of the deficiency would be prohibited if subsection (a) were not applicable.

Such property may be sold if the taxpayer consents to the sale, or if the director determines that the expenses of conservation and maintenance will greatly reduce the net proceeds, or if the property is perishable.

(k) Interest. For the purpose of subsection (a) of N.J.S. 54A:9-5, the last date prescribed for payment shall be determined without regard to any notice and demand for payment issued under this section prior to the last date otherwise prescribed for such payment.

( l ) Early termination of taxable year. If the director finds that a taxpayer designs quickly to depart from this State or to remove his property therefrom, or to conceal himself or his property therein, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect the income tax for the current or the preceding taxable year unless such proceedings be brought without delay, the director shall declare the taxable period for such taxpayer immediately terminated, and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable year or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing return and paying the tax has expired; and such taxes shall thereupon become immediately due and payable. In any proceeding brought to enforce payment of taxes made due and payable by virtue of the provisions of this subsection, the finding of the director made as herein provided, whether made after notice to the taxpayer or not, shall be for all purposes presumptive evidence of jeopardy.

(m) Reopening of taxable period. Notwithstanding the termination of the taxable period of the taxpayer by the director, as provided in subsection ( l ), the director may reopen such taxable period each time the taxpayer is found by the director to have received income, within the current taxable year, since the termination of such period. A taxable period so terminated by the director may be reopened by the taxpayer if he files with the director a true and accurate return of taxable income and credits allowed under this act for such taxable period, together with such other information as the director may by regulation prescribe.

(n) Furnishing of bond where taxable year is closed by the director. Payment of taxes shall not be enforced by any proceedings under the provisions of subsection ( l ) prior to the expiration of the time otherwise allowed for paying such taxes if the taxpayer furnishes, under regulations prescribed by the director, a bond to insure the timely making of returns with respect to, and payment of, such taxes or any income taxes for prior years.

§ 54A:9-16 Armed forces relief provisions.

(a) Time to be disregarded. In the case of an individual serving in the Armed Forces of the United States, or serving in support of such armed forces, in an area designated by the President of the United States by executive order as a "combat zone," or by federal statute as a "qualified hazardous duty area," at any time during the period designated by the President by executive order or by federal statute as the period of combatant activities in such zone or area, or hospitalized outside the State as a result of injury received while serving in such an area during such time, the period of service in such area, plus the period of continuous hospitalization outside the State attributable to such injury, and the next 180 days thereafter, shall be disregarded in determining, under this act, in respect of the income tax liability (including any interest, penalty, or addition to the tax) of such individual.

(1) Whether any of the following acts was performed within the time prescribed therefor:

(A) Filing any return of income tax (except withholding tax);

(B) Payment of any income tax (except withholding tax) or any installment thereof or of any other liability to the State, in respect thereof;

(C) Filing a petition with the director for credit or refund or for redetermination of a deficiency, or application for review of a decision rendered by the director;

(D) Allowance of a credit or refund of income tax;

(E) Filing a claim for credit or refund of income tax;

(F) Assessment of income tax;

(G) Giving or making any notice or demand for the payment of any income tax, or with respect to any liability to the State in respect of income tax;

(H) Collection, by the director, by levy or otherwise of the amount of any liability in respect of income tax;

(I) Bringing suit by the State, or any officer, on its behalf, in respect of any liability in respect of income tax; and

(J) Any other act required or permitted under this act or specified in regulations prescribed under this section by the director.

(2) The amount of any credit or refund (including interest).

(b) Action taken before ascertainment of right to benefits. The assessment or collection of the tax imposed by this act or of any liability to the State in respect of such tax, or any action or proceeding by or on behalf of the State in connection therewith, may be made, taken, begun, or prosecuted in accordance with law, without regard to the provisions of subsection (a), unless prior to such assessment, collection, action, or proceeding it is ascertained that the person concerned is entitled to the benefits of subsection (a).

(c) Members of armed forces dying in action. In the case of any person who dies during an induction period while in active service as a member of the Armed Forces of the United States, if such death occurred while serving in a combat zone or a qualified hazardous duty area during a period of combatant activities in such zone or area, as described in subsection (a), or as a result of wounds, disease or injury incurred while so serving, the tax imposed by this act shall not apply with respect to the taxable year in which falls the date of death, or with respect to any prior taxable year ending on or after the first day served in a combat zone, and no return shall be required in behalf of such person or such person's estate for such year, and the tax of any such taxable year which is unpaid at the date of death, including interest, additions to tax and penalties, if any, shall not be assessed and, if assessed, the assessment shall be abated and, if collected, shall be refunded to the legal representative of the estate if one has been appointed and has qualified, or, if no legal representative has been appointed or has qualified, to the surviving spouse.

§ 54A:9-17 General powers of the director.

(a) General. The director shall administer and enforce the tax imposed by this act and is authorized to make such rules and regulations, and to require such facts and information to be reported as he may deem necessary to enforce the provisions of this act. The director may divide the State into districts in each of which a branch office may be maintained by him, but in no case shall a county be divided in forming a district.

(b) Delegation of powers. The director may delegate to any officer or employee of his division such of his powers as he may deem necessary to carry out efficiently the provisions of this act, and the person or persons to whom such power has been delegated shall possess and may exercise all of the power and perform all of the duties herein conferred and imposed upon the director.

(c) Examination of books and witnesses. The director for the purpose of ascertaining the correctness of any return, or for the purpose of making an estimate of taxable income of any person, shall have power to examine or to cause to have examined, by any agent or representative designated by him for that purpose, any books, papers, records or memoranda bearing upon the matters required to be included in the return, and may require the attendance of the person rendering the return or any officer or employee of such person, or the attendance of any other person having knowledge in the premises, and may take testimony and require proof material for his information, with power to administer oaths to such person or persons.

(d) Abatement authority. The director, on his own motion, may abate any small unpaid balance of an assessment of income tax, or any liability in respect thereof, if the director determines under uniform rules prescribed by him that the administration and collection costs involved would not warrant collection of the amount due. He may also abate, on his own motion, the unpaid portion of the assessment of any tax or any liability in respect thereof, which is excessive in amount, or is assessed after the expiration of the period of limitation properly applicable thereto, or is erroneously or illegally assessed. No claim for abatement under this subsection shall be filed by a taxpayer.

(e) The Department of the Treasury, Division of Taxation, may enter into an agreement with the taxing authorities of any state which imposes a tax on or is measured by income to provide that compensation paid in such state to residents of this State shall be exempt from such tax; in such case any compensation paid in this State to residents of such state shall be exempt from New Jersey personal income tax. The Division of Taxation, in such agreements, may provide for reciprocal withholding, employer liability, exchange of information and all other matters relating to cooperation between the states. The provisions of subsection (e) of N.J.S.54A:4-1 and subsection e. of N.J.S.54A:5-8 shall not affect any agreement entered into by the Division of Taxation and the taxing authorities of another state pursuant to this subsection.

§ 54A:9-17.1 Identifying numbers.

(a) Supplying of identifying numbers. When required by regulations prescribed by the director:

(1) Inclusion in returns. Any person required under the authority of this act to make a return, statement, or other document shall include in such return, statement, or other document such identifying number as may be prescribed for securing proper identification of such person.

(2) Furnishing number to other person. Any person with respect to whom a return, statement, or other document is required under the authority of this act to be made by another person shall furnish to such other person such identifying number as may be prescribed for securing his proper identification.

(3) Furnishing number of another person. Any person required under the authority of this act to make a return, statement, or other document with respect to another person shall request from such other person, and shall include in any such return, statement, or other document, such identifying number as may be prescribed for securing proper identification of such other person.

(b) Limitation. (1) Except as provided in paragraph (2), a return of any person with respect to his liability for tax, or any statement or other document in support thereof, shall not be considered for purposes of paragraphs (2) and (3) of subsection (a) as a return, statement, or other document with respect to another person.

(2) For purposes of paragraphs (2) and (3) of subsection (a), a return of an estate or trust with respect to its liability for tax, and any statement or other document in support thereof, shall be considered as a return, statement, or other document with respect to each beneficiary of such estate or trust.

(c) Requirement of information. For purposes of this section, the director is authorized to require such information as may be necessary to assign an identifying number to any person.

§ 54A:9-17.2 Filing of tax returns for domestic service workers.

1. a. Notwithstanding the provisions of subsection (a) of N.J.S.54A:7-4 to the contrary, except for an employer also liable for withholding taxes with respect to remuneration for services rendered other than for domestic service, tax returns filed with respect to domestic service shall be filed on a calendar year basis. Such a return shall be filed on or before January 31 following the close of the calendar year and the amount of tax withheld shall be paid over to the Director of the Division of Revenue at that time, together with those contributions treated as taxes pursuant to the provisions of section 2 of P.L.1999, c.94 (C.43:21-11.3).

b. The director shall prescribe such regulations as the director deems necessary to carry out the purpose of allowing employers to convert from a quarterly system of payments and filing to annual filing, and to simplify employer filing by allowing the combination of unemployment compensation, disability benefits and gross income tax remittance for reporting and payment purposes for employees providing domestic services by treating the taxes payable pursuant to subsection a. of this section and those contributions treated as taxes pursuant to the provisions of section 2 of P.L.1999, c.94 (C.43:21-11.3) as taxes subject to the remittance requirements of N.J.S.54A:7-1 et seq. These regulations shall include:

(1) Provisions for the forwarding of contributions treated as taxes pursuant to the provisions of subsection b. of section 2 of P.L.1999, c.94 (C.43:21-11.3), together with such information as may be necessary, to the Office of the Assistant Commissioner for Administration and Finance of the Department of Labor for deposit in the proper funds and accounts established pursuant to the "unemployment compensation law," R.S.43:21-1 et seq., and the "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-25 et seq.);

(2) Provisions for the apportionment of interest and penalties imposed between liabilities pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. and those contributions treated as liabilities pursuant to the "New Jersey Gross Income Tax Act" pursuant to the provisions of subsection b. of section 2 of P.L.1999, c.94 (C.43:21-11.3), and forwarding the latter to the Office of the Assistant Commissioner for Administration and Finance and the Director of the Division of Accounting in the Department of Labor for deposit in the proper funds established pursuant to the "unemployment compensation law," R.S.43:21-1 et seq., and the "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-25 et seq.).

c. Notwithstanding the provisions of subsection a. of this section, an employer subject to the provisions of this section shall, within 10 days of the separation from employment of an employee in domestic service whose contributions are treated as taxes pursuant to the provisions of section 2 of P.L.1999, c.94 (C.43:21-11.3), report to the Commissioner of the Department of Labor, on a form determined by the commissioner, wage information for all completed calendar quarters of employment not previously reported and such other separation information as may be required to properly process an unemployment compensation claim.

d. For the purposes of this section, "domestic service" means domestic service as an employee in a private home of the employer, such as service as a babysitter, nanny, health aide, private nurse, maid, caretaker, yard worker or similar domestic employee.

§ 54A:9-18 Order to compel compliance.

(a) Failure to file tax return. If any person willfully refuses to file an income tax return required by this act, the director may apply to a judge of the superior court for an order directing such person to file the required return. If a person fails or refuses to obey such order, he shall be guilty of contempt of court.

(b) Failure to furnish records or testimony. If any person willfully refuses to make available any books, papers, records or memoranda for examination by the director or his representative or willfully refuses to attend and testify, pursuant to the powers conferred on the director under this act, the director may apply to a judge in the superior court in the county where such person resides, for an order directing that person to comply with the director's request for books, papers, records or memoranda or for his attendance and testimony. If the books, papers, records or memoranda required by the director are in the custody of a corporation, the order of the court may be directed to any principal officer of such corporation. If a person fails or refuses to obey such order, he shall be guilty of contempt of court.

§ 54A:9-19 Exercise of powers and duties of Division of Taxation by director.

All the powers, duties and responsibilities vested in the Division of Taxation by this act shall be exercised by the director thereof or his duly designated representative.

§ 54A:9-20 Appropriation.

There is hereby appropriated to the Division of Taxation in the Department of the Treasury the sum of $5.0 million or so much thereof as shall be required to carry out the provisions of this act from the effective date hereof through the period ending June 30, 1977.

§ 54A:9-21 Severability clause.

If any provision of this act, or any application of any provision, is held invalid, the invalidity shall not affect other applications of the provision, or other provisions of the act, which reasonably can be given effect despite the invalidity.

§ 54A:9-24 Repeal of Tax on Capital Gains and Other Unearned Income.

Chapter 172, Laws of 1975 (C. 54:8B-1 et seq.) is hereby repealed, effective July 1, 1976, and shall be inoperative with respect to capital gains and other unearned income subject to tax, under said act, paid or accrued on and after said date. Such repeal shall not affect the obligation, lien or duty to pay any taxes, interest or penalties which have accrued or may accrue by virtue of any assessment made or which may be made with respect to taxes levied for any taxable year or part of a taxable year prior to July 1, 1976, nor shall this act affect the legal authority to assess and collect the taxes which may be or have been due and payable under said chapter 172, laws of 1975 as amended, together with such interest and penalties as would have accrued thereon under any provision of law amended or repealed hereby; nor shall this act invalidate any assessments or affect any proceeding for the enforcement thereof. In the event of such repeal, the adjusted gross income requirements and the personal exemptions allowed shall be prorated according to the number of taxable months required to be reported divided by 12. The taxpayer may, at his option, determine actual adjusted gross income for the period required to be reported.

§ 54A:9-25 Property Tax Relief Fund.

Taxes collected under the provisions of this act shall be deposited by the State Treasurer in a special account to be known as the Property Tax Relief Fund. Moneys in the Property Tax Relief Fund shall be annually appropriated, pursuant to formulas established from time to time by the Legislature, to the several counties, municipalities and school districts of this State exclusively for the purpose of providing property tax relief and for the purpose of reducing or offsetting property taxes, including the funding of the requirements of P.L.1975, c. 212, and homestead exemptions under 1976 Assembly Bill No. 1330, as said acts may hereafter be amended or supplemented and provided there may be deducted the administrative costs of the collection hereof and in replacement of revenues resulting from the repeal of certain laws under this and companion legislation.

§ 54A:9-25.1 Gubernatorial Election Fund checkoff.

There is hereby established within the General Treasury a special fund to be known as the "Gubernatorial Elections Fund." Where a taxpayer has indicated on a return filed pursuant to this act that one dollar of his taxes is to be reserved for such fund, the Treasurer shall credit such fund from the taxes collected under the provisions of this act. The fund shall be available for appropriation pursuant to section 5 of P.L.1974, c. 26 (C.19:44A-30), provided however that establishment of the "Gubernatorial Elections Fund" shall in no way affect the operation of said section.

Blank forms of return provided by the director for use in reporting under this act shall include, in a conspicuous place, the opportunity for a taxpayer to indicate his preference under this section in substantially the following manner:

Yes No

"Gubernatorial Elections Fund" Do you wish to

designate $1 of your

taxes for this fund?

NOTE: If you check the "Yes" If joint return, does

box(es) it will not increase your spouse wish to

your tax or reduce your refund. designate $1?

§ 54A:9-25.2 "Endangered and Nongame Species of Wildlife Conservation Fund."

1. There is hereby established in the Department of the Treasury a special fund to be known as the "Endangered and Nongame Species of Wildlife Conservation Fund." Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in such fund. The Director of the Division of Taxation shall provide the taxpayer with the opportunity to indicate his preference on the tax return in substantially the following way:

Endangered and Nongame Species of Wildlife Conservation Fund: I wish to contribute $10 , $20 , other amount $...... , to this fund. The State Treasurer shall deposit into the fund all moneys designated for the fund pursuant to this supplementary act.

§ 54A:9-25.3 Appropriation of deposited moneys.

The Legislature shall annually appropriate all moneys deposited in the "Endangered and Nongame Species Conservation Fund" established pursuant to this act to the Department of Environmental Protection to effectuate the purposes of P.L.1973, c. 309 (C. 23:2A-1 et seq.).

§ 54A:9-25.4 "Children's Trust Fund."

2. a. There is established in the Department of the Treasury a special fund to be known as the "Children's Trust Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in the special fund. The Director of the Division of Taxation in the Department of the Treasury shall provide each taxpayer with the opportunity to indicate his preference on the tax return in substantially the following manner:

Children's Trust Fund: I wish to contribute $10 , $20 , other amount $...... , to this fund.

The State Treasurer shall deposit into the fund all moneys designated for the fund pursuant to this act.

§ 54A:9-25.5 All funds to commission.

The Legislature shall annually appropriate all moneys deposited in the "Children's Trust Fund" established by this act to the Child Life Protection Commission to effectuate the purposes of sections 4 and 5 of this act.

§ 54A:9-25.6 Contribution to Vietnam Veterans' Memorial Fund; indication on income tax return.

1. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the Vietnam Veterans' Memorial Fund established pursuant to section 4 of P.L.1985, c.494 (C.52:18A-208). The Director of the Division of Taxation in the Department of the Treasury shall provide each taxpayer with the opportunity to indicate the taxpayer's preference on the tax return to contribute to the fund in substantially the following way:

"Vietnam Veterans' Memorial Fund: I wish to contribute $10 , $20 , other amount $........ to this fund."

Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting.

The State Treasurer shall deposit net contributions collected pursuant to this act into the Vietnam Veterans' Memorial Fund.

§ 54A:9-25.7 "New Jersey Breast Cancer Research Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Breast Cancer Research Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in the special fund. The Director of the Division of Taxation in the Department of the Treasury shall provide each taxpayer with the opportunity to indicate the taxpayer's preference on the tax return in substantially the following way:

New Jersey Breast Cancer Research Fund: I wish to contribute $10 , $20 , other amount $....... to this fund.

Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting.

The State Treasurer shall deposit net contributions collected pursuant to this act into the New Jersey Breast Cancer Research Fund.

§ 54A:9-25.8 Legislative appropriations; breast cancer research project defined.

2. The Legislature shall annually appropriate all monies deposited in the "New Jersey Breast Cancer Research Fund" established pursuant to this act to the New Jersey State Commission on Cancer Research, established pursuant to P.L.1983, c.6 (C.52:9U-1 et seq.) for breast cancer research projects. As used in this act, "breast cancer research project" means a scientific research project which is approved by the commission and which focuses on the causes, prevention, screening, treatment or cure of breast cancer and may include, but is not limited to, basic, behavioral, clinical, demographic, epidemiologic and psychosocial research.

§ 54A:9-25.9 U.S.S. New Jersey Educational Museum Fund; tax return contribution.

1. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in the U.S.S. New Jersey Educational Museum Fund established pursuant to this act. The Director of the Division of Taxation shall provide each taxpayer with the opportunity to indicate the taxpayer's preference on the tax return to contribute to the fund in substantially the following way:

"U.S.S. New Jersey Educational Museum Fund: I wish to contribute $10 , $20 , other amount $...... to this fund."

§ 54A:9-25.10 U.S.S. New Jersey Educational Museum Fund established.

2. There is established in the Department of the Treasury a special fund to be known as the U.S.S. New Jersey Educational Museum Fund. The State Treasurer shall deposit into the fund net contributions collected pursuant to this act. All moneys deposited in the U.S.S. New Jersey Educational Museum Fund shall be annually appropriated to the Home Port Alliance to support the maintenance and operation of the U.S.S. New Jersey as a memorial and museum.

§ 54A:9-25.11 Cost incurred, deducted from receipts.

3. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to section 1 of this act, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury.

§ 54A:9-25.12 "Drug Abuse Education Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Drug Abuse Education Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Drug Abuse Education Fund."

§ 54A:9-25.13 Appropriation of all funds deposited in "Drug Abuse Education Fund."

2. The Legislature shall annually appropriate all funds deposited in the "Drug Abuse Education Fund" established pursuant to this act to the Department of Education for distribution to non-governmental entities operating in the public interest that, utilizing law enforcement personnel, provide drug abuse education programs on a Statewide basis, such as, but not limited to, Project DARE (Drug Abuse Resistance Education).

Any costs incurred by the Department of Education for administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting.

§ 54A:9-25.14 Taxpayer options to contribute portion of refund to certain funds, methodology.

1. The Director of the Division of Taxation shall provide each taxpayer with the opportunity to indicate the taxpayer's preference on the tax return that a portion of the taxpayer's tax refund or an enclosed contribution be contributed to a fund that the taxpayer has, by statute, the opportunity to contribute to on the taxpayer's New Jersey gross income tax return. Except as may otherwise be provided by the authorizing statute, the taxpayer shall indicate the taxpayer's preference on the tax return by numerical designation coding or codings. The numbers used in the coding shall be in numerical sequence, with the lowest number to be assigned to the fund established by the first statute authorizing such a fund, and the coding of other funds to continue in that sequence assigned in order corresponding to the order in which the several statutes authorizing those other funds were enacted. Subject to the foregoing provisions of this section, the director shall determine the form and manner of the indication, and the presentation and explanation of the taxpayer's contribution options in the return instructions.

§ 54A:9-25.15 Option to contribute portion of tax refund to Korean Veterans' Memorial Fund.

1. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Korean Veterans' Memorial Fund," established pursuant to section 4 of P.L.1996, c.72 (C.52:18A-218).

Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Korean Veterans' Memorial Fund."

§ 54A:9-25.16 Appropriation of funds deposited.

2. The Legislature shall annually appropriate all funds deposited in the "Korean Veterans' Memorial Fund" to the Department of Military and Veterans' Affairs.

§ 54A:9-25.17 "Organ and Tissue Donor Awareness Education Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Organ and Tissue Donor Awareness Education Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Organ and Tissue Donor Awareness Education Fund."

d. Revenues derived from the issuance of special "Be An Organ Donor" license plates, pursuant to P.L.2001, c.164 (C.39:3-27.127 et al.), shall be deposited in the fund and shall be allocated as provided in subsection c. of section 1 of P.L.2001, c.164 (C.39:3-27.127).

§ 54A:9-25.18 Appropriation of funds in Organ and Tissue Donor Awareness Education Fund.

2. Except for those funds deposited and allocated pursuant to paragraphs (1) and (2) of subsection c. of section 1 of P.L.2001, c.164 (C.39:3-27.127), the Legislature shall annually appropriate all funds deposited in the "Organ and Tissue Donor Awareness Education Fund" established pursuant to this act to the organ procurement organizations designated by the federal government to provide services in this State. These funds shall be proportionally distributed to the organ procurement organizations, based upon the adjusted population base specified by the federal Health Care Financing Administration for these organizations, for expenses and educational materials concerning organ donor and tissue sharing Statewide.

§ 54A:9-25.19 NJ-AIDS Services Fund; tax return contribution

1. a. There is established in the Department of the Treasury a special fund to be known as the "NJ-AIDS Services Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from the receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit into the "NJ-AIDS Services Fund" net contributions collected pursuant to this section for distribution to the Commissioner of Health and Senior Services, for grants to agencies within the State assisting and supporting individuals living with HIV/AIDS.

d. The Legislature shall annually appropriate all funds deposited in the "NJ-AIDS Services Fund" to the Department of Health and Senior Services and the Department of the Treasury in accordance with the purposes and provisions of this act.

§ 54A:9-25.20 "Literacy Volunteers of America - New Jersey Fund;" tax return contribution

1. a. There is established in the Department of the Treasury a special fund to be known as the "Literacy Volunteers of America - New Jersey Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Literacy Volunteers of America - New Jersey Fund."

d. The Legislature shall annually appropriate all funds deposited in the "Literacy Volunteers of America - New Jersey Fund" established pursuant to this section to the Literacy Volunteers of America - New Jersey, Inc., for the purposes of literacy training, technical assistance, and program development.

§ 54A:9-25.21 "New Jersey Prostate Cancer Research Fund"; tax return contribution.

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Prostate Cancer Research Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "New Jersey Prostate Cancer Research Fund."

§ 54A:9-25.22 Appropriation of monies deposited.

2. The Legislature shall annually appropriate all monies deposited in the "New Jersey Prostate Cancer Research Fund" established pursuant to this act to the New Jersey State Commission on Cancer Research, established pursuant to P.L.1983, c.6 (C.52:9U-1 et seq.) for prostate cancer research projects. As used in this act, "prostate cancer research project" means a scientific research project which is approved by the commission and which focuses on the causes, prevention, screening, treatment or cure of prostate cancer and may include, but is not limited to, basic, behavioral, clinical, demographic, epidemiologic and psychosocial research.

§ 54A:9-25.23 Income tax returns, option for contribution to NJ World Trade Center Scholarship Fund.

1. a. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the New Jersey World Trade Center Scholarship Fund established pursuant to section 3 of P.L.2001, c.442 (C.18A:71B-23.3).

b. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the New Jersey World Trade Center Scholarship Fund.

c. The Legislature shall annually appropriate all funds deposited in the New Jersey World Trade Center Scholarship Fund to the New Jersey Higher Education Student Assistance Authority for the New Jersey World Trade Center Scholarship Board for the purposes of providing support to scholarship recipients for higher education.

§ 54A:9-25.24 "New Jersey Veterans Haven Support Fund," tax return contribution.

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Veterans Haven Support Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section to the "New Jersey Veterans Haven Support Fund."

d. The Legislature shall annually appropriate all funds deposited in the "New Jersey Veterans Haven Support Fund" to the Department of Military and Veterans' Affairs to support the vocational and transitional housing program at the New Jersey Veterans Haven facilities.

§ 54A:9-25.25 "Community Food Pantry Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Community Food Pantry Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund in accordance with the provisions of P.L.1999, c.21 (C.54A:9-25.14).

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Community Food Pantry Fund."

d. The Legislature shall annually appropriate all funds deposited in the "Community Food Pantry Fund" to the Department of Agriculture for distribution to community food pantries through the State Food Purchase Program. All such funds received by community food pantries shall be utilized exclusively for the purchase of food. The Department of Agriculture shall cooperate with the Department of Human Services and the Department of Health and Senior Services to distribute the funds.

§ 54A:9-25.26 "Cat and Dog Spay/Neuter Fund."

2. a. There is hereby established in the Department of the Treasury a special fund to be known as the "Cat and Dog Spay/Neuter Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution be deposited in such fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Cat and Dog Spay/Neuter Fund."

d. The Legislature shall annually appropriate all moneys deposited in the "Cat and Dog Spay/Neuter Fund" established pursuant to subsection a. of this section to the "Animal Population Control Fund," established pursuant to section 6 of P.L.1983, c.172 (C.4:19A-5).

§ 54A:9-25.27 "New Jersey Lung Cancer Research Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Lung Cancer Research Fund."

b. The Legislature shall annually appropriate all monies deposited in the "New Jersey Lung Cancer Research Fund" established pursuant to this section to the New Jersey State Commission on Cancer Research, established pursuant to section 4 of P.L.1983, c.6 (C.52:9U-4), for lung cancer research projects. As used in this section, "lung cancer research project" means a scientific research project which is approved by the commission and which focuses on the causes, prevention, education, screening, treatment or cure of lung cancer and may include, but is not limited to, basic, clinical, and epidemiologic research.

c. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "New Jersey Lung Cancer Research Fund".

d. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the "New Jersey Lung Cancer Research Fund."

§ 54A:9-25.28 "Boys and Girls Clubs in New Jersey Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Boys and Girls Clubs in New Jersey Fund."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Boys and Girls Clubs in New Jersey Fund."

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section to the "Boys and Girls Clubs in New Jersey Fund."

d. The Legislature shall annually appropriate all monies deposited in the "Boys and Girls Clubs in New Jersey Fund" established pursuant to this section to the Boys and Girls Clubs in New Jersey, Inc. for the purposes of supporting programs and services.

§ 54A:9-25.29 "NJ National Guard State Family Readiness Council Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "NJ National Guard State Family Readiness Council Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "NJ National Guard State Family Readiness Council Fund."

d. The Legislature shall annually appropriate all funds deposited in the "NJ National Guard State Family Readiness Council Fund" established pursuant to this section to the National Guard State Family Readiness Council for the purposes of providing support to members of the New Jersey National Guard and their families affected by extended deployment during Operations Enduring Freedom and Iraqi Freedom.

§ 54A:9-25.30 "American Red Cross-NJ Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "American Red Cross-NJ Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section to the "American Red Cross-NJ Fund."

d. The Legislature shall annually appropriate all funds deposited in the "American Red Cross-NJ Fund" to the American Red Cross of Central New Jersey for allocation to each of the New Jersey Chapters of the American Red Cross to support its programs of emergency response with its aim of preventing and relieving suffering.

§ 54A:9-25.31 "Girl Scouts Councils in New Jersey Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Girl Scouts Councils in New Jersey Fund."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Girl Scouts Councils in New Jersey Fund."

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section to the "Girl Scouts Councils in New Jersey Fund."

d. The Legislature shall annually appropriate all monies deposited in the "Girl Scouts Councils in New Jersey Fund" established pursuant to this section for distribution in equal amounts among the chartered local councils of the Girl Scouts of the United States of America in New Jersey for the purposes of supporting their programs and services.

§ 54A:9-25.32 "2014 NJ Special Olympics Home Team Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "2014 NJ Special Olympics Home Team Fund."

b. For the taxable years beginning in calendar years 2012 and 2013, a taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "2014 NJ Special Olympics Home Team Fund" in accordance with the provisions of section 1 of P.L.1999, c.21 (C.54A:9-25.14).

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section into the "2014 NJ Special Olympics Home Team Fund."

d. The Legislature shall annually appropriate all funds deposited in the "2014 NJ Special Olympics Home Team Fund" to Special Olympics New Jersey. All monies appropriated to Special Olympics New Jersey shall be used solely to fund expenses associated with the training of New Jersey athletes participating in the 2014 Special Olympics USA Games and the participation of New Jersey athletes in the 2014 Special Olympics USA Games, including but not limited to: equipment, insurance, room and board, travel, and uniforms.

e. On the first day of the seventh month after the conclusion of the 2014 Special Olympics USA Games, monies within the "2014 NJ Special Olympics Home Team Fund" shall be appropriated to Special Olympics New Jersey and used solely to fund expenses associated with New Jersey athletes' training for and participation in future Special Olympics games, including but not limited to: equipment, insurance, room and board, travel, and uniforms.

§ 54A:9-25.33 "Homeless Veterans Grant Fund."

4. a. There is established in the Department of the Treasury a special fund to be known as the "Homeless Veterans Grant Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in such fund in accordance with the provisions of section 1 of P.L.1999, c.21 (C.54A:9-25.14).

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Homeless Veterans Grant Fund."

d. The Legislature shall annually appropriate all funds deposited in the "Homeless Veterans Grant Fund" to the Department of Military and Veterans' Affairs to be used exclusively for the awarding of grants to organizations that assist homeless veterans in this State under the New Jersey Homeless Veterans Grant Program established pursuant to section 3 of P.L.2013, c.239 (C.38A:3-6.2b). The Legislature may deposit funds not collected pursuant to this section into the "Homeless Veterans Grant Fund," as it may, from time to time, deem appropriate.

§ 54A:9-25.34 "The Leukemia & Lymphoma Society - New Jersey Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as "The Leukemia & Lymphoma Society - New Jersey Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into "The Leukemia & Lymphoma Society - New Jersey Fund."

d. The Legislature shall annually appropriate all funds deposited in "The Leukemia & Lymphoma Society - New Jersey Fund" established pursuant to this section to the New Jersey chapter of The Leukemia & Lymphoma Society, for the purposes of providing support programs for leukemia and lymphoma patients and their families, advocacy for research, and public education on the issues of leukemia and lymphoma.

§ 54A:9-25.35 "Northern New Jersey Veterans Memorial Cemetery Development Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Northern New Jersey Veterans Memorial Cemetery Development Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Northern New Jersey Veterans Memorial Cemetery Development Fund."

d. The Legislature shall annually appropriate all funds deposited in the "Northern New Jersey Veterans Memorial Cemetery Development Fund" established pursuant to this section to the Department of Military and Veterans' Affairs for the purposes of facilitating the development and operation of the Northern New Jersey Veterans Memorial Cemetery.

§ 54A:9-25.36 "New Jersey Farm to School and School Garden Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Farm to School and School Garden Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting in the Department of Taxation. The State Treasurer shall deposit net contributions collected pursuant to this section to the "New Jersey Farm to School and School Garden Fund."

d. The Legislature shall annually appropriate all funds deposited in the "New Jersey Farm to School and School Garden Fund" established pursuant to this section to the New Jersey Department of Agriculture for use in support of its Farm to School program and grants for the development and expansion of the Farm to School program and school gardens activities.

§ 54A:9-25.37 "Local Library Support Fund," contributions through gross income tax returns permitted.

1. a. There is established in the Department of the Treasury a special fund to be known as the "Local Library Support Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's gross income tax refund or an enclosed contribution be deposited in the "Local Library Support Fund" and provided to the State Librarian, who shall annually distribute the moneys received from the "Local Library Support Fund" in accordance with the State Library Aid Law, N.J.S.18A:74-1 et seq.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to the "Local Library Support Fund" may be deducted from contributions collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Local Library Support Fund."

d. The Legislature shall annually appropriate all moneys deposited in the "Local Library Support Fund" established pursuant to subsection a. of this section to the State Librarian, who shall annually distribute the moneys received from the "Local Library Support Fund" in accordance with the State Library Aid Law, N.J.S.18A:74-1 et seq.

e. As used in this section:

"County library" means a public library established pursuant to chapter 33 of Title 40 of the Revised Statutes.

"Local library" means a county library or a municipal library.

"Municipal library" means a public library established pursuant to chapter 54 of Title 40 of the Revised Statutes.

§ 54A:9-25.38 "ALS Association Support Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "ALS Association Support Fund."

b. For taxable years beginning on or after the date of enactment of this section, a taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's gross income tax refund or an enclosed contribution be deposited in the ALS Association Support Fund and used in accordance with this section.

c. The costs incurred by the Division of Taxation for collection or administration attributable to the ALS Association Support Fund may be deducted from contributions collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the ALS Association Support Fund.

d. The Legislature shall annually appropriate the moneys deposited in the ALS Association Support Fund established pursuant to subsection a. of this section to the ALS Association to provide support services to New Jersey residents as follows: 50 percent of the amounts deposited in the fund shall be appropriated to the Greater Philadelphia Chapter of the ALS Association serving residents in southern New Jersey and 50 percent shall be appropriated to the Greater New York Chapter of the ALS Association serving residents in central and northern New Jersey.

§ 54A:9-25.39 "Fund for the Support of New Jersey Nonprofit Veterans Organizations."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Fund for the Support of New Jersey Nonprofit Veterans Organizations."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the Fund for the Support of New Jersey Nonprofit Veterans Organizations for the annual distribution of grants to private nonprofit veteran organizations for programs and services supporting New Jersey veterans.

c. Any costs incurred by the Division of Taxation or the Department of Military and Veterans' Affairs for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit the net contributions collected pursuant to this section in the Fund for the Support of New Jersey Nonprofit Veterans Organizations.

d. The Legislature shall annually appropriate all monies deposited in the Fund for the Support of New Jersey Nonprofit Veterans Organizations to the Department of Military and Veterans' Affairs for annual grants to be distributed to applicant private nonprofit veteran organizations for programs and services supporting New Jersey veterans.

§ 54A:9-25.40 "New Jersey Yellow Ribbon Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Yellow Ribbon Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "New Jersey Yellow Ribbon Fund."

d. The Legislature shall annually appropriate all funds deposited in the "New Jersey Yellow Ribbon Fund" established pursuant to this section to the Department of Military and Veterans' Affairs for the purposes of providing support that shall include, but not be limited to, support to defray the costs of food, housing, medical services, and other expenses to active duty members of the United States Armed Forces, the Reserve components thereof, and the National Guard from New Jersey and their families affected by extended deployment during Operations Enduring Freedom and Iraqi Freedom or their successor operations.

§ 54A:9-25.41 "Autism Programs Fund."

1. a. There is established in the Department of the Treasury a special fund within the "Autism Medical Research and Treatment Fund" to be known as the "Autism Programs Fund."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Autism Programs Fund" in accordance with the provisions of section 1 of P.L.1999, c.21 (C.54A:9-25.14).

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Autism Programs Fund."

d. The Legislature shall annually appropriate all funds deposited in the "Autism Programs Fund" to the Department of Health to be used exclusively for the support of service-oriented autism programs throughout the State.

§ 54A:9-25.42 "Boy Scouts of America Councils in New Jersey Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Boy Scouts of America Councils in New Jersey Fund."

b. For taxable years beginning on or after the date of enactment of this section, each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's gross income tax refund or an enclosed contribution be deposited in the Boy Scouts of America Councils in New Jersey Fund and be distributed in equal amounts among the chartered local councils of the Boy Scouts of America in New Jersey to support programs and services.

c. The costs incurred by the Division of Taxation for collection or administration attributable to the Boy Scouts of America Councils in New Jersey Fund may be deducted from contributions collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the Boy Scouts of America Councils in New Jersey Fund for distribution in equal amounts among the chartered local councils of the Boy Scouts of America in New Jersey to support programs and services.

d. The Legislature shall annually appropriate all moneys deposited in the Boy Scouts of America Councils in New Jersey Fund established pursuant to subsection a. of this section for distribution in equal amounts among the chartered local councils of the Boy Scouts of America in New Jersey to support programs and services. The distribution shall be administered by the Monmouth Council of Boy Scouts of America or its successor. To administer the distribution amongst the chartered local councils of the Boy Scouts of America in New Jersey, the Monmouth Council of Boy Scouts of America shall establish an account and make the distribution in equal amounts among the chartered local councils of the Boy Scouts of America in New Jersey on no less than an annual basis.

§ 54A:9-25.43 "NJ Memorials to War Veterans Maintenance Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "NJ Memorials to War Veterans Maintenance Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "NJ Memorials to War Veterans Maintenance Fund."

d. The Legislature shall annually appropriate all funds deposited in the "NJ Memorials to War Veterans Maintenance Fund" established pursuant to this section to the Department of Military and Veterans' Affairs for the purposes of providing maintenance to the memorials honoring New Jersey's veterans from the Korean War, the Vietnam War, and World War II.

§ 54A:9-25.44 "Jersey Fresh Program Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Jersey Fresh Program Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this act into the "Jersey Fresh Program Fund."

d. The Legislature shall annually appropriate all funds deposited in the " Jersey Fresh Program Fund" established pursuant to this section to the Department of Agriculture for the purposes of providing support to the Jersey Fresh Program, which shall include, but need not be limited to, funding advertising, promotional, and quality grading program activities to inform consumers about the availability of locally grown agricultural products.

e. As used in this section, "Jersey Fresh Program" means Jersey Fresh for fruits and vegetables, Jersey Grown for nursery crops, Jersey Seafood for aquacultured and wild-caught fish and shellfish, Jersey Equine for equine livestock, and Made with Jersey Fresh for processed food made with New Jersey sourced agricultural products.

§ 54A:9-25.45 NJ World War II Veterans' Memorial Fund.

1. a. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the NJ World War II Veterans' Memorial Fund established pursuant to section 1 of P.L.2005, c.59 (C.38A:3-2.4).

b. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the NJ World War II Veterans' Memorial Fund for the purpose of the fund.

§ 54A:9-25.46 "Meals on Wheels in New Jersey Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "Meals on Wheels in New Jersey Fund."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Meals on Wheels in New Jersey Fund."

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Meals on Wheels in New Jersey Fund."

d. The Legislature shall annually appropriate all monies deposited in the "Meals on Wheels in New Jersey Fund" established pursuant to this section for distribution to the Meals on Wheels America organization for allocation to each of the independently-run local programs operating in the State of New Jersey to support its programs enabling senior citizens to live healthier lives in their own home.

§ 54A:9-25.47 "New Jersey Pediatric Cancer Research Fund."

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Pediatric Cancer Research Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this act may be deducted from receipts collected pursuant to this act, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section to the "New Jersey Pediatric Cancer Research Fund."

d. The Legislature shall annually appropriate all funds deposited in the "New Jersey Pediatric Cancer Research Fund" established pursuant to this section to the New Jersey State Commission on Cancer Research, established pursuant to section 4 of P.L.1983, c.6 (C.52:9U-4) , for pediatric cancer research projects.

e. As used in this section, "pediatric cancer research project" means a scientific research project approved pursuant to section 2 of P.L.2021, c.210 (C.52:9U-6.4), which scientific research project focuses on the causes, prevention, education, screening, treatment , or cure of pediatric cancer , or the symptoms or effects experienced by patients following completion of a course of treatment for pediatric cancer, and may include, but shall not be limited to, basic, clinical, and epidemiologic research.

§ 54A:9-25.48 "Special Olympics New Jersey Fund".

1. a. There is established in the Department of the Treasury a special fund to be known as the "Special Olympics New Jersey Fund."

b. A taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's tax refund or an enclosed contribution shall be deposited in the "Special Olympics New Jersey Fund."

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting in the Department of the Treasury. The State Treasurer shall deposit net contributions collected pursuant to this section into the "Special Olympics New Jersey Fund."

d. The Legislature shall annually appropriate all monies deposited in the "Special Olympics New Jersey Fund" established pursuant to this section for distribution to the Special Olympics New Jersey organization.

§ 54A:9-25.49 "New Jersey Ovarian Cancer Research Fund".

1. a. There is established in the Department of the Treasury a special fund to be known as the "New Jersey Ovarian Cancer Research Fund."

b. Each taxpayer shall have the opportunity to indicate on the taxpayer's New Jersey gross income tax return that a portion of the taxpayer's refund or an enclosed contribution shall be deposited in the special fund.

c. Any costs incurred by the Division of Taxation for collection or administration attributable to this section may be deducted from receipts collected pursuant to this section, as determined by the Director of the Division of Budget and Accounting. The State Treasurer shall deposit net contributions collected pursuant to this section into the "New Jersey Ovarian Cancer Research Fund."

d. The Legislature shall annually appropriate all monies deposited in the "New Jersey Ovarian Cancer Research Fund" established pursuant to this section to the New Jersey State Commission on Cancer Research, established pursuant to section 4 of P.L.1983, c.6 (C.52:9U-4), for ovarian cancer research projects. As used in this section, "ovarian cancer research project" means a scientific research project which is approved by the commission and which focuses on the causes, prevention, education, screening, treatment, or cure of ovarian cancer and may include, but is not limited to, basic, clinical, and epidemiologic research.

§ 54A:9-26 Property Tax Relief Fund saved harmless.

9. An amount equal to the revenue that would be available to the Property Tax Relief Fund but for the amount estimated to be foregone and due to be refunded during a fiscal year due to the "Property Tax Deduction Act," P.L.1996, c.60 (C.54A:3A-15 et al.), shall be made available to the Property Tax Relief Fund from State General Fund revenue sources during that fiscal year without a reduction in the level of State aid appropriated to municipalities, school districts and counties from the General Fund during that fiscal year.

§ 54A:9-27 Effective date.

(a) This act shall take effect immediately and shall be applicable with respect to items of income, deduction, loss or gain occurring in taxable years ending on or after July 1, 1976 but only to the extent such items have been earned, or incurred on or after July 1, 1976.

(b) New Jersey taxable income for 1976 from a person or entity with an accounting period for Federal income tax purposes which begins before July 1, 1976 shall be determined by computing the total taxable income of the person or entity for the full accounting period and by multiplying such taxable income by the quotient of the number of days in such year after July 1, 1976, divided by 365. However, where the taxpayer's taxable year covers a period of less than 12 months, the taxpayer may determine total taxable income solely on the basis of the items of income, deductions, loss or gain occurring during such taxable year.

(c) This act shall remain inoperative unless and until the "Tenants' Property Tax Rebate Act" now pending before the Legislature as Senate Bill No. 1546 and Assembly Bill No. 1330 and Assembly Bill No. 1663 are enacted.

§ 54A:9-29 Certain revenue appropriated for direct real property taxpayer relief.

19. All revenue derived annually from the tax rate change effectuated in the amendment made to N.J.S.54A:2-1 in section 17 of P.L.2004, c.40 shall be annually appropriated for direct real property taxpayer relief.

§ 54A:9-30 Eligibility for tax rebates.

3. a. Beginning with taxable year 2020, and subject to appropriation by the Legislature, a qualified taxpayer shall be eligible for a tax rebate based on the requirements set forth in this section.

b. The rebate shall be the lesser of $500 or an amount equal to the amount of tax paid after credits for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. In the case of a qualified taxpayer who is a part-year resident during the taxable year, the amount of the rebate shall be pro-rated, based upon the total number of months of the taxpayer's residency during the taxable year.

c. The director shall issue rebates to qualified taxpayers between July 1 and July 31 of the subsequent taxable year, provided however, in the case of a qualified taxpayer who is granted an extension of time for filing a return, the director may issue the rebate between July 1 and December 31 of the subsequent taxable year.

d. The director is authorized to issue rules and regulations as necessary to implement this section.

e. The director may recover rebates issued in error or as a result of misrepresentation in the same manner as a deficiency with respect to a payment of a State tax in accordance with the State Uniform Tax Procedure Law, R.S.54:48-1 et seq.

f. Any rebate issued pursuant to this section shall not be considered gross income for purposes of the New Jersey Gross Income Tax Act.

g. As used in this section:

"Qualified taxpayer" means an individual who has timely filed a resident return, is a resident of this State during the taxable year, and who had during the taxable year: (1) at least one qualifying child; (2) gross income not exceeding $150,000 for married individuals filing a joint return and an individual filing as a head of household or as a surviving spouse, or $75,000 for married individuals filing separately and an individual filing as a single taxpayer; and (3) a gross income tax liability greater than zero.

"Qualifying child" means the same as defined in section 152 of the Internal Revenue Code (26 U.S.C. s.152), where claimed as a dependent on a resident return under the New Jersey Gross Income Tax Act.

Chapter 10

§ 54A:10-1 Short title

This act shall be known and may be cited as the "State Revenue Sharing Act of 1976" .

§ 54A:10-2 Legislative declaration.

It is hereby declared that because municipalities are limited in their means for raising revenues, that it is the obligation of the State to provide assistance which will benefit all local taxpayers, as a supplement to all other forms of aid.

§ 54A:10-3 Definitions.

For the purposes of this act, unless the context clearly requires a different meaning:

a. "Director" means the Director of the Division of Taxation in the Department of the Treasury.

b. "Fund" means the Revenue Sharing Fund created herein.

c. "Senior citizen deductions" and "deductions for citizens less than 65 years of age who are permanently and totally disabled, and their surviving spouses in certain cases" means the actual amount of the deductions allowed pursuant to section 4 of P.L.1971, c. 20 (C. 54:4-8.52).

d. "Veterans deductions" means the actual amount of the deduction allowed pursuant to section 2 of this act.

e. "Effective tax rate," with respect to each municipality, means the total tax levy for the current year for 1976 and the pretax year thereafter on which the tax rate is computed divided by the apportionment valuation for the current year for 1976 and the pretax year thereafter as shown in the Table of Aggregates, prepared pursuant to R.S. 54:4-52.

§ 54A:10-4 Revenue sharing fund; creation; distributions to municipalities.

There is hereby created within the General Treasury a Revenue Sharing Fund of $50 million of the net revenues from the New Jersey Gross Income Tax Act.

Distribution of the revenue from the fund shall be made annually to all municipalities with an effective tax rate in excess of $1.00 per $100.00 of true valuation in the proportion which the population of the qualifying municipality bears to the total population of all qualifying municipalities of the State according to the most recent State population estimates published by the New Jersey Department of Labor and Industry, except that in the year of promulgation of a Federal decennial census, the census figures shall be used.

§ 54A:10-5 Distribution of additional amount.

In addition to the amount determined in section 4 above, there shall be added to the amount to be distributed to each municipality the following:

a. An amount equivalent to the senior citizen deductions in each municipality, and;

b. An amount equivalent to the veterans' deductions in each municipality.

§ 54A:10-6 Annual computation of funds due each municipality; credit after prepayment of tax.

Prior to November 1, 1976 and prior to November 1 in each year thereafter the director shall compute the amount of revenue sharing funds due each municipality for the succeeding year, and shall thereupon notify the governing body and the tax collector or other chief fiscal officer of each municipality of the amounts so determined. If a taxpayer has prepaid his tax, he shall be given a credit upon his subsequent tax payment.

§ 54A:10-7 Anticipation of revenues in municipal budget; reduction of property tax levy.

Upon notification by the director of the amount of revenue sharing funds due, the governing body of each municipality shall anticipate such revenues in its budget for the succeeding year and shall apply all such revenues to the reduction of the property tax levy.

§ 54A:10-8 Annual certification of funds due each municipality; payments.

On or before December 1 annually, the director shall certify to the State Treasurer the amount of revenue sharing funds due each municipality under the provisions of this act. The State Treasurer upon the certification of the director and upon the warrant of the State Comptroller shall pay to each municipality the amount due as follows:

Revenue sharing funds, except for funds to be distributed under section 5 shall be paid annually in quarterly installments on February 1, May 1, August 1 and November 1. Revenue sharing funds to be distributed under section 5 shall be paid on November 1, 1977 and annually thereafter. Each installment shall consist of 25% of the total amount due.

§ 54A:10-9 Rules and regulations.

The director is hereby authorized to make such rules and regulations as may be necessary to carry out the provisions of this act. The Director of the Division of Local Government Services is hereby authorized to make such rules and regulations as may be necessary to carry out the provisions of this act with respect to tax bills and revisions thereof.

§ 54A:10-10 Inapplicability of act to program of aid or assistance in effect.

Nothing herein contained shall affect any program of aid or assistance now in effect.

§ 54A:10-11 Veterans deductions; certification of number and amounts by county board of taxation.

On or before June 15, 1978 and on or before June 15 of each year thereafter, each county board of taxation shall, on a form prescribed by the Director of the Division of Taxation, certify to the director from the tax lists certified to it for each taxing district for the current tax year the following:

a. The number of veterans deductions allowed for the current tax year including those allowed by the tax collector up to May 31 of the current tax year;

b. The total dollar amount of veterans deductions for the current year including those allowed by the tax collector up to May 31 of the current tax year;

c. Separately, the number and dollar amount of veterans deductions allowed, or disallowed, for the period from June 1 to December 31 of the previous tax year beginning in 1979;

d. The totals for a., b., and c. above by district and for the county as a whole.

§ 54A:10-12 Additional amount of revenue sharing funds due each municipality for current tax year; certification; payment.

On or before September 15, 1978, the director shall certify to the State Treasurer the additional amount of revenue sharing funds due each municipality for the current tax year. The State Treasurer upon the certification of the director and upon the warrant of the State Comptroller shall pay to each municipality such additional amounts on or before November 1, 1978. In each year thereafter there shall be paid to each municipality the full amount of revenue sharing funds which shall include the additional amounts provided for by this act.

Chapter 11

§ 54A:11-1 Short title.

1. This act shall be known and may be cited as the "New Jersey Health Insurance Market Preservation Act."

§ 54A:11-2 Definitions relative to required health insurance coverage.

2. As used in this act:

"Affordable Care Act" means the federal "Patient Protection and Affordable Care Act," Pub.L.111-148, as amended by the federal "Health Care and Education Reconciliation Act of 2010," Pub.L.111-152, and any federal rules and regulations adopted pursuant thereto.

"Applicable individual" means the same as defined in 26 U.S.C. s.5000A(d)(1).

"Carrier" means any entity that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a hospital or health service corporation, a multiple employer welfare arrangement, an entity under contract with the State Health Benefits Program or the School Employees' Health Benefits Program to administer a health benefits plan, or any other entity providing a health benefits plan.

"Minimum essential coverage" means the same as defined in 26 U.S.C. s.5000A(f)(1).

§ 54A:11-3 Minimum essential coverage.

3. a. A taxpayer shall, for each month beginning after December 31, 2018, ensure that the taxpayer, if an applicable individual, and any dependent of the taxpayer who is an applicable individual, is covered under minimum essential coverage for that month.

b. In the case of any taxpayer who fails to meet the requirements of subsection a. of this section, there shall be imposed a State shared responsibility tax equal to a taxpayer's federal penalty that would apply for the taxable year under section 5000A of the Internal Revenue Code of 1986, as in effect on December 15, 2017 (26 U.S.C. s.5000A).

§ 54A:11-4 Rules for determination of State shared responsibility.

4. The rules for determining the State shared responsibility tax under section 3 of this act shall reflect the following changes relative to the rules for determining the federal shared responsibility payment under 26 U.S.C. s.5000A:

a. The amount of the tax imposed by this act shall be determined, if applicable, using the State average premium for bronze-level plans rather than the national average premium for bronze-level plans;

b. Instead of the United States Secretary of Health and Human Services, in coordination with the United States Secretary of the Treasury, the Commissioner of Banking and Insurance, in coordination with the State Treasurer, shall have the authority to recognize additional health benefits coverage as "minimum essential coverage";

c. For purposes of the exemption for individuals who cannot afford coverage:

(1) the required contribution is as follows:

(a) for an individual eligible for minimum essential coverage under both an eligible employer-sponsored plan and a qualified health plan the lesser of the amounts described in 26 U.S.C. s.5000A(e)(1)(B)(i) and 26 U.S.C. s.5000A(e)(1)(B)(ii);

(b) for an individual only eligible for minimum essential coverage under a qualified health plan the amount described in 26 U.S.C. s.5000A(e)(1)(B)(ii);

(2) the income threshold for coverage to be considered unaffordable shall be determined by the State Treasurer in a manner consistent with 26 U.S.C. s.5000A (e)(1);

d. No tax shall be imposed under this act with respect to any applicable individual for any month during a calendar year if the taxpayer's taxable income for the taxable year is below the minimum taxable income threshold established in N.J.S.54A:2-4 and N.J.S.54A:8-3.1;

e. No tax shall be imposed by this act with respect to any applicable individual for any month during which the individual is a nonresident taxpayer;

f. Determinations as to hardship exemptions shall be made by the State Treasurer under this act rather than by the U.S. Secretary of Health and Human Services under 42 U.S.C. s.18031(d)(4)(H);

g. If a taxpayer is subject to both the tax imposed by this act and the federal penalty under 26 U.S.C. s.5000A for a taxable year, the taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in the amount of the taxpayer's federal penalty payment, but not to exceed the amount of the taxpayer's State tax imposed by this act in the taxable year.

The order of priority of the application of the tax credit allowed pursuant to this subsection and any other tax credits allowed by law shall be as prescribed by the Director of the Division of Taxation. The amount of the tax credit applied under this subsection against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce the tax liability of the taxpayer to an amount less than zero; and

h. Health coverage provided under a multiple employer welfare arrangement, as defined in subsection (40) of 29 U.S.C. s.1002, shall not qualify as minimum essential coverage unless the plan complies with the requirements of one or more of the following New Jersey statutes, as applicable to a carrier and health benefits plans offered in the relevant individual, small employer, or large employer markets:

(1) P.L.1938, c.366 (C.17:48-1 et seq.);

(2) P.L.1940, c.74 (C.17:48A-1 et seq.);

(3) P.L.1985, c.236 (C.17:48E-1 et seq.);

(4) N.J.S.17B:26-1 et seq.;

(5) N.J.S.17B:27-26 et seq.;

(6) P.L.1973, c.337 (C.26:2J-1 et seq.);

(7) P.L.1992, c.161 (C.17B:27A-2 et seq.);

(8) P.L.2001, c.352 (17B:27C-1 et seq.);

(9) P.L.1997, c.1972 (C.26:2S-1 et seq.); or

(10) P.L.1992, c.162 (C.17B:27A-17 et seq.).

i. For any taxable year in which federal premium tax credits, available pursuant to 26 U.S.C. s.36B, enacted as part of the federal "Patient Protection and Affordable Care Act," Pub.L.111-148, as amended by the "Health Care and Education Reconciliation Act of 2010," Pub.L.111-152 (ACA), become unavailable due to the federal government repealing that section or failing to fund the premium tax credits, the State shared responsibility tax under this act shall not be enforced.

§ 54A:11-5 Assessment, collection of tax.

5. a. The tax imposed by this act shall be assessed and collected in the same manner as under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.; provided, however, that any funds collected pursuant to this act shall not be gross income tax revenue for purposes of N.J.S.54A:9-25.

b. Any funds collected pursuant to this act shall be deposited in the New Jersey Health Insurance Premium Security Fund created pursuant to P.L.2018, c.24 (C.17B:27A-10.1 et seq.). If the Commissioner of Banking and Insurance does not establish a health insurance reinsurance plan pursuant to P.L.2018, c.24 (C.17B:27A-10.1 et seq.), the funds collected pursuant to this act shall be deposited in the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58), which may be used to improve and expand children's health insurance in the NJ FamilyCare Program, established pursuant to P.L.2005, c.156 (C.30:4J-8 et al.), and, to the extent possible, to maximize federal funding under Title XXI of the federal Social Security Act, subject to the approval of the Director of the Division of Budget and Accounting in the Department of the Treasury.

§ 54A:11-6 Regulations.

6. a. Except as otherwise provided in this section, any federal regulations implementing 26 U.S.C. s.5000A, as that section and those regulations are in effect on December 15, 2017, shall apply as though incorporated into this act. Federal guidance interpreting these federal regulations shall similarly apply.

b. The State Treasurer shall adopt regulations implementing this section, which shall include modifications necessary to reflect the differences between this act and 26 U.S.C. s.5000A, and other differences between the "New Jersey Gross Income Tax Act" and the Internal Revenue Code of 1986.

c. All references in this act to any of the provisions of 26 U.S.C. s.5000A shall be to that provision as in effect on December 15, 2017.

§ 54A:11-7 Program to determine eligibility for exemption.

7. a. The State Treasurer shall establish a program for determining whether to grant a certification that an individual is entitled to an exemption from either the individual responsibility requirement pursuant to subsection a. of section 3 of this act or the tax imposed pursuant to subsection b. of section 3 of this act by reason of religious conscience or hardship.

b. The State Treasurer shall make the determination whether to grant an exemption pursuant to this section and shall notify the individual granted an exemption.

§ 54A:11-8 Findings relative to required health insurance coverage.

8. a. The Legislature finds that:

(1) The reporting requirement provided for in this section is necessary for the successful implementation of the tax imposed by this act. In particular, this requirement provides the only widespread source of third-party reporting to help taxpayers and the State Treasurer verify whether an applicable individual maintains minimum essential coverage. There is compelling evidence that third party reporting is crucial for ensuring compliance with tax provisions.

(2) The tax imposed by this act, and therefore the reporting requirement in this section, is necessary to protect the compelling State interest of protecting the health and welfare of its residents.

(3) The tax imposed by this act, and therefore the reporting requirement in this section, is necessary to protect the compelling State interest of fostering economic stability and growth in the State.

(4) The tax imposed by this act, and therefore the reporting requirement in this section, is necessary to protect the compelling State interest of ensuring a stable and well-functioning health insurance market. There is compelling evidence that, without an effective tax in place for those who go without coverage, there would be substantial instability in health insurance markets, including higher prices and the possibility of areas without any insurance available. Ensuring the health of insurance markets is a responsibility reserved for states under the McCarran-Ferguson Act and other federal law.

(5) The reporting requirement in this section has been narrowly tailored to support compliance with the tax imposed by this act while imposing only an incidental burden on reporting entities. In particular, the information that must be reported is a subset of the information that must already be reported under a similar federal reporting requirement under 26 U.S.C. s.6055. In addition, this section provides that its reporting requirement may be satisfied by providing the same information that is currently reported under that federal requirement.

b. For purposes of administering the tax on individuals who fail to maintain minimum essential coverage under section 3 of this act, every applicable entity that provides minimum essential coverage to an individual during a calendar year shall, at the time the State Treasurer prescribes, make a return described in subsection c. of this section. In a manner consistent with requirements under 26 U.S.C. s.6055, a copy of the return shall be provided to the individual and the State Treasurer.

c. (1) Except as provided in paragraph (2) of this subsection, a return shall be in such form as the State Treasurer may prescribe, and contain the name, address and Social Security number or taxpayer identification number of the primary insured and the name and Social Security number or taxpayer identification number of each other individual obtaining coverage under the policy, the dates during which that individual was covered under minimum essential coverage during the calendar year, and such other information as the State Treasurer may require.

(2) Notwithstanding the requirements of paragraph (1), a return shall not fail to be a return described in this section if it includes the information contained in a return described in 26 U.S.C. s.6055, as that section is in effect and interpreted on December 15, 2017.

(3) In the case of coverage provided by an applicable entity that is any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide that coverage, or a person appropriately designated for purposes of this section, shall be responsible for the returns and statements required by this section. An applicable entity may contract with third-party service providers, including insurance carriers, to provide the returns and statements required by this section.

d. As used in this section:

"Applicable entity" shall include the following:

(1) An employer or other sponsor of an employment-based health plan with respect to employment-based minimum essential coverage.

(2) The Department of Human Services with respect to the NJ FamilyCare Program.

(3) Carriers licensed or otherwise authorized to offer health coverage with respect to coverage they provide that is not described in paragraph (1) or (2) of this subsection.

§ 54A:11-9 Notification to taxpayer.

9. Not earlier than November 1 nor later than November 30 of each year, the State Treasurer, in consultation with the Commissioner of Banking and Insurance, shall send a notification to each taxpayer who files a gross income tax return indicating if the taxpayer or one of the taxpayer's dependents is not enrolled in minimum essential coverage as required by this act. That notification shall contain information on the services available to obtain coverage, including through the federally-facilitated health insurance Exchange established pursuant to the Affordable Care Act.

§ 54A:11-10 Rules, regulations.

10. The State Treasurer, in consultation with the Commissioner of Banking and Insurance shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), in order to effectuate the purposes of this act.

Chapter 12

§ 54A:12-1 Short title.

1. This act shall be known and may be cited as the "Pass-Through Business Alternative Income Tax Act."

§ 54A:12-2 Definitions relative to pass-through entity business alternative income tax.

2. As used in P.L.2019, c.320 (C.54A:12-1 et al.):

"Direct share of the tax paid" means the portion of business alternative income tax calculated on the sum of each member's share of distributive proceeds attributable to the pass-through entity.

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Distributive proceeds" means (1) in the case of a pass-through entity classified as a partnership for purposes of federal income tax law, the sum of (a) the distributive share of partnership income derived from sources both inside and outside New Jersey of all partners who are resident individuals, estates, or trusts that the partnership is required to report to the director under N.J.S.54A:5-4 plus (b) the distributive share of partnership income derived from sources inside New Jersey of all partners of the pass-through entity who are not resident individuals, estates, or trusts that the partnership is required to report to the director under section N.J.S.54A:5-4; and (2) in the case of an electing S corporation, the pro rata share of S corporation income allocated to this State as determined under section 12 of P.L.1993, c.173 (C.54A:5-10). For purposes of determining distributive proceeds, a pass-through entity shall apply the allocation factors determined under N.J.S.54A:5-7.

"Limited liability company" means an entity organized pursuant to the "Revised Uniform Limited Liability Company Act," P.L.2012, c.50 (C.42:2C-1 et seq.), or prior law providing for the formation of a limited liability company in this State, or formed as a limited liability company under similar statutes of other states, that is classified as a partnership or an S Corporation for purposes of federal income tax law.

"Member" means a shareholder of an S corporation; a partner in a general, limited, or limited liability partnership; or a member of a limited liability company.

"Partnership" means a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on in this State.

"Pass-through business alternative income tax" means the tax set forth in subsection b. of section 3 of P.L.2019, c.320 (C.54A:12-3).

"Pass-through entity" means a partnership, an S corporation, or a limited liability company, with at least one member who is liable for tax on distributive proceeds pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in a taxable year.

"Share of distributive proceeds" means the portion of distributive proceeds attributable to a member of a pass-through entity in a taxable year.

"Taxable year" means the same as in N.J.S.54A:1-2.

"Taxed at the business entity level" means taxed pursuant to an election made under P.L.2019, c.320 (C.54A:12-1 et al.).

§ 54A:12-3 Election to pay pass-through business alternative income tax.

3. a. A pass-through entity with at least one member who is liable pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for tax on that member's share of distributive proceeds of the pass-through entity in a taxable year may elect to be liable for, and pay, a pass-through business alternative income tax in the taxable year.

b. Each pass-through entity that makes an election for a taxable year pursuant to this section shall annually report to each of its members, for the taxable year, the member's share of distributive proceeds.

(1) The election to pay tax at the entity level is available if consent is made by each member of the electing entity who is a member at the time the election is filed or by any officer, manager, or member of the electing entity who is authorized, under law or the entity's organizational documents, to make the election and who represents to having such authorization under penalties of perjury. This election shall be made annually on or before the due date of the entity's return as established by the director and on forms prescribed by the director. This election shall not be made retroactively. If the members decide to revoke an election, that revocation shall occur on or before the due date of the entity's return.

(2) The tax imposed on a pass-through entity pursuant to this section shall be determined in accordance with the following table with respect to the sum of each member's share of distributive proceeds attributable to the pass-through entity for the taxable year.

For taxable years beginning on or after January 1, 2020:

If the sum of each member's

share of distributive proceeds

attributable to the pass-through

entity is: The tax is:

Not over $250,000.00.......... 5.675% of the sum of

distributive proceeds

Over $250,000.00 but not

over $1,000,000.00...... $14,187.50 plus 6.52% of the

excess over $250,000.00

Over $1,000,000.00 $63,087.50 plus 10.9% of the excess over

$1,000,000.00

c. The amount of pass-through business alternative income tax due from a pass-through entity in a taxable year shall be exclusive of any amount of tax due and paid by the pass-through entity pursuant to the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), during any privilege period, except as otherwise provided in P.L.2019, c.320 (C.54A:12-1 et al.).

(1) A pass-through entity which elects to pay the pass-through business entity income tax shall be included in a combined group, as defined in subsection (z) of section 4 of P.L.1945, c.162 (C.54:10A-4), and file a New Jersey combined return pursuant to the Corporation Business Tax Act, P.L.1945, c.162 (C.54:10A-1 et seq.). A pass-through entity which elects to pay the pass-through business entity income tax shall be excluded from a combined group, as defined in subsection (z) of section 4 of P.L.1945, c.162 (C.54:10A-4), and from filing a New Jersey combined return pursuant to the Corporation Business Tax Act, P.L.1945, c.162 (C.54:10A-1 et seq.) if the pass-through entity meets the following: (a) all of the members of the pass-through entity are taxpayers otherwise liable for the tax under the "New Jersey Gross Income Tax Act," N.J.S.A.54A:1-1 et seq., and (b) no business entity taxed as a corporation under the Corporation Business Tax Act, P.L.1945, c.162 (C.54:10A-1 et seq.), has a direct, indirect, beneficial, or constructive ownership or control of the pass-through entity.

(2) Nothing shall prevent a group of pass-through entities under common ownership by an individual, estate, or trust, or a group of related individuals, estates, or trusts, from filing a composite or consolidated pass-through business entity income tax return. In determining whether the pass-through entities are under common ownership, the individual, estate, or trust, or a group of related individuals, estates, or trusts, must own more than 50 percent of the direct or indirect voting control of each pass-through entity; provided, however, section 318 of the federal Internal Revenue Code, 26 U.S.C. s.318, shall apply for determining voting control.

d. Pass-through entities whose members have made the business alternative income tax election shall file an entity tax return and make payments on or before the 15th day of the third month following the close of each entity's taxable year for federal income tax purposes. A pass-through entity shall make estimated entity tax payments on or before the 15th day of each of the fourth month, sixth month, and ninth month of the taxable year and on or before the 15th day of the first month succeeding the close of the taxable year.

e. A pass-through entity that overpays tax in one taxable year shall be allowed to apply the overpayment of tax to the subsequent taxable year's estimated entity tax payments.

§ 54A:12-4 Powers of director for administration.

4. a. For the purpose of administration of P.L.2019, c.320 (C.54A:12-1 et al.), the director shall have those powers as the director deems necessary to apply to a pass-through entity subject to P.L.2019, c.320 (C.54A:12-1 et al.), for the reporting, payment, collection, administration, and enforcement of the tax imposed pursuant to P.L.2019, c.320 (C.54A:12-1 et al.), as may be applicable to the collection, administration, and enforcement of the New Jersey gross income tax provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the "New Jersey State Uniform Tax Procedure Law," N.J.S.54:48-1 et seq., except as otherwise provided by subsection b. of this section.

b. Taxes collected under the provisions of P.L.2019, c.320 (C.54A:12-1 et al.) shall be deposited by the State Treasurer in the General Fund.

§ 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.

§ 54A:12-6 Pass-through entity owned by corporate and non-corporate members.

12. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the director may, immediately, upon filing with the Office of Administrative Law, prescribe forms and adopt regulations that the director deems necessary to administer the provisions of this act, which regulations shall be effective for a period not to exceed 360 days following enactment of P.L.2019, c.320 (C.54A:12-1 et al.) and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410.