Recently signed legislation (P.L. 2018, c. 48, and P.L. 2018, c. 131) made several changes to the Corporation Business Tax Act that are retroactive to tax years beginning on and after January 1, 2017. New Jersey has decoupled from the deduction and exemptions permitted under the federal Tax Cuts and Jobs Act, Public Law 115-97 (IRC § 965). The legislation reduces the 100% dividend exclusion to 95% for certain taxpayers. However, the law now permits an exclusion of dividends by a taxpayer if the taxpayer’s subsidiary received those same dividends from other lower-tiered subsidiaries that filed and paid tax to New Jersey in the same tax year. The Governor made comments on the signing of P.L. 2018, c. 131 (View Comments).
Businesses affected by the changes must amend their 2017 Form CBT-100 or Form BFC-1 by filing Form CBT-DIV 2017 Supplemental. If a business files amended federal repatriation statements, amended CBT-DIV 2017 Supplemental forms must be filed with the Division of Taxation within 30 days.
Note: In order to simplify the reporting of dividends and deemed repatriation dividends, including the IRC §965 deemed repatriation dividends, to reflect the changes to the Corporation Business Tax Act, the Division of Taxation has created a supplemental form to use instead of the CBT-DIV 2017. The Division strongly encourages taxpayers who need to file to use Form CBT-DIV 2017 Supplemental.
Form CBT-DIV 2017 Supplemental must be submitted even if the information was included on the 2017 corporation business tax return. In addition, if a taxpayer submits an amended federal repatriation statement (IRC 965 Transition Tax Statement) to the IRS, an amended Form CBT-DIV 2017 Supplemental must be filed with the Division of Taxation within 30 days.
The Q&A on Completing Form CBT-DIV 2017 will provide answers to the most common questions about the new form.
Additional information will be posted as it becomes available.