State Guide
New Jersey S Corp Election
If you have read anywhere that New Jersey makes you file a separate state S election on Form CBT-2553, that advice is out of date, and it is still nearly everywhere. New Jersey scrapped the separate election. For privilege periods beginning on or after 22 December 2022, a corporation that is an S corporation federally is automatically a New Jersey S corporation. You do not elect in. If you want to be treated as a C corporation in New Jersey, you now have to elect out.
The Key Facts
Verified 6 August 2026 against New Jersey Technical Bulletin TB-105(R) and the Division of Taxation P.L. 2022 c.133 procedural changes guidance. N.J.S.A. 54:10A-5.22.
What replaced the election
Three things, none of which is an election form. Be registered with the Division of Revenue and Enterprise Services as a corporation. Be able to evidence your federal S status, which in practice means your IRS acceptance notice, CP261 or 385C. And submit the Shareholder Jurisdictional Consent, Schedule SJC, which travels inside the CBT-100S return rather than as a standalone filing.
The opt out, if you actually want C treatment
It needs the consent of 100 percent of shareholders, and there is no form to send in. The Division said plainly it was not creating one. You keep the consent in the corporation's records and give effect to the choice by filing a CBT return other than the CBT-100S with the hybrid box marked. The decision runs to the later of the original or extended due date of the return, so it is not a trap you can spring in March.
If your S corporation predates 22 December 2022 and you never made the old New Jersey election, you are not covered by the automatic rule for those earlier periods. The retroactive route is Form CBT-2553-R through the Division's online S corporation application. That is a real and fixable situation and it is worth a conversation rather than a form.
NJ Minimum Corporation Business Tax
Even with a valid NJ S election, New Jersey imposes a minimum CBT based on gross receipts:
| NJ Gross Receipts | Minimum Tax |
|---|---|
| Less than $100,000 | $500 |
| $100,000 to $249,999 | $750 |
| $250,000 to $499,999 | $1,000 |
| $500,000 to $999,999 | $1,500 |
| $1,000,000 or more | $2,000 |
There is no late New Jersey election to miss any more
This used to be one of the most expensive mistakes in New Jersey: file the federal election, forget the state one, and get taxed as a C corporation in New Jersey while being an S corporation federally. For periods beginning on or after 22 December 2022 that failure mode is gone, because there is nothing to miss. Your federal election carries.
Where late relief still matters is federal. If your Form 2553 was itself late and you are relying on Rev. Proc. 2013-30, the New Jersey treatment follows whatever the IRS accepts, because New Jersey is now reading your federal status rather than a separate state election. Get the federal one right and New Jersey follows.
Filing Checklist
- File federal Form 2553 with the IRS. For a calendar year business that is March 15.
- Register the corporation with the NJ Division of Revenue and Enterprise Services.
- Keep your IRS acceptance notice, CP261 or 385C, as evidence of federal S status.
- Complete Schedule SJC, the Shareholder Jurisdictional Consent, inside the CBT-100S.
- File Form CBT-100S annually.
- Pay the minimum CBT based on gross receipts.
- Issue NJ Schedule K-1 to each shareholder.
Common Mistakes
- Filing a CBT-2553 you do not need. The advice to file one is everywhere and it is three and a half years out of date.
- Assuming the old rule still applies to old years. It does. Periods before 22 December 2022 are not covered by the automatic rule, and that is what CBT-2553-R is for.
- Skipping Schedule SJC. It replaced the election as the thing New Jersey actually wants from you, and it lives inside the CBT-100S.
- Not filing CBT-100S annually. NJ requires an annual S Corp return even as a pass-through.
- Ignoring the minimum tax. The NJ minimum CBT is owed regardless of profit or loss.
Common questions
Does New Jersey require a separate S Corp election?
No. For privilege periods beginning on or after 22 December 2022, a corporation that is an S corporation for federal purposes is automatically a New Jersey S corporation. The separate CBT-2553 election was eliminated by P.L. 2022, c.133.
Do I still need to file Form CBT-2553?
Not for current years. CBT-2553 survives only as CBT-2553-R, a retroactive election for privilege periods that began before 22 December 2022. If your S corporation predates that date and no New Jersey election was ever made, those earlier years may still need it.
How do I elect out of New Jersey S treatment?
You need the consent of 100 percent of shareholders, but there is no form to send in. The consent is retained in the corporation's records, and the choice is given effect by filing a New Jersey CBT return other than the CBT-100S with the hybrid box marked.
Related
Operating in NJ? We handle the state filing for you.