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2021 NJ-1065
Partnership Return Instructions
The New Jersey Gross Income Tax Act does not the privilege period and on or before the 15th day of the
follow all federal income tax provisions for partner- first month after the close of the privilege period.
ships. For New Jersey Gross Income Tax purposes, all
items of income, expense, gain, or loss resulting from Most entities classified as partnerships for federal in-
the activities of the partnership, regardless of the item’s come tax purposes that have income or loss derived
character or category, must be included in the amount from New Jersey sources and that have more than two
reported on the NJ-1065 as “Partnership Income” and owners must make a payment of a filing fee of $150 for
then apportioned to each partner on Schedule NJK-1. each owner up to a maximum of $250,000. The filing fee
Each partner will report its portion of the total partnership is due on or before the 15th day of the fourth month after
income as “distributive share of partnership income” the close of each privilege period. An installment pay-
on its individual tax return. Nonresident partners that ment equal to 50% of the current year’s filing fee is also
have income or loss from New Jersey sources are also required at the same time.
required to file a tax return to report their share of part-
nership income. Nonresident partners will have to attach All choices affecting the calculation of income from a
a copy of their Schedule NJK-1 to claim credit for the tax partnership are made by the partnership, not each part-
paid on their behalf. ner. This includes the choice of recognized methods of
accounting, methods of calculating depreciation, capital-
The partnership income information required to be re- ization of organizational fees, and the use of the install-
ported on this form is needed to: (1) adjust certain items ment sale provisions. It also includes the classification
of federal income to conform to the New Jersey Gross of income and the allocation of income to New Jersey.
Income Tax Act, and (2) separate income derived from All partnership elections are equally applicable to all
New Jersey sources from amounts derived from all partners.
sources. These adjustments and allocations provide the
basis for the reporting of partnership income by both
New Jersey resident partners and nonresident partners. GIT and CBT Partnership Returns
The Division has two partnership tax returns: Forms
The amounts reported by the partnership on federal NJ-1065 and NJ-CBT-1065. The Gross Income Tax
Schedule K may require adjustments to ensure that all Act (GIT) at N.J.S.A. 54A:8-6 requires entities classi-
income, expense, gain, or loss is ultimately reported by fied as a partnership for federal income tax purposes
the partners as distributive share of partnership income having a resident owner or income derived from New
on the New Jersey Income Tax return. For example, in- Jersey sources to file a Gross Income Tax return, Form
terest, dividends, rents, gains, or losses earned are to be NJ-1065. Partnerships with more than two owners and
combined with federal ordinary income (loss) to arrive at income or loss from New Jersey sources may also be
New Jersey partnership income (loss). subject to a filing fee. The fee is calculated and reported
on the NJ-1065.
If the partnership has operations outside New Jersey,
all income, gain, or loss derived from sources other The Corporation Business Tax Act (CBT) at N.J.S.A.
than real property must be allocated according to the 54:10A-15.11 imposes a tax on certain partnerships that
business allocation percentage as determined by the have nonresident owners. Partnerships subject to the
Business Allocation Schedule (NJ-NR-A) unless per- CBT must file the NJ-CBT-1065. The separate forms
mission has been granted to use a substitute method help distinguish the differences that exist between the
of allocation. Income, gain, or loss attributable to real Gross Income Tax and Corporation Business Tax Acts.
property that is physically located in New Jersey must be
allocated entirely to this State. If the partnership is not a The filing fee is reported directly on the NJ-1065. The
qualified investment partnership, an investment club, or GIT filing fee is remitted with the Partnership Payment
is not listed on a United States national stock exchange, Voucher (NJ-1065-V). If the entity is also required to
but it has a nonresident noncorporate or a nonresident calculate and report Corporation Business Tax, the entity
corporate partner and it has operations outside New Jer- must complete and file the NJ-CBT-1065. If the entity
sey, it must also complete Schedule J, Corporation Allo- has a CBT balance due, it is remitted with the Corpo-
cation Schedule, and file it with the NJ-1065 partnership ration Business Tax–Partnership Payment Voucher
return and pay any applicable tax due. Schedule J is not (NJ-CBT-V).
required for a partnership that meets hedge fund status if
Partnerships that are members of an entity electing to
its only nonresident partners are individuals, estates, or
pay the Pass-Through Business Alternative Income Tax
trusts.
must also file the NJ-CBT-1065 to claim credit for their
Partnerships that are subject to tax payments must make share of the tax.
installment payments of 25% of that tax on or before the
15th day of each of the fourth, sixth, and ninth months of

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                                                             yearly basis. The entity, not the partner, must make the 
General Instructions
                                                             determination.
Definitions
Partnership, for tax purposes, means and includes a          Investment Clubs are usually small groups of individ-
syndicate, group, pool, joint venture, and any other un-     uals who pool their money to invest in stock or other 
incorporated organization through or by means of which       securities. The group usually operates informally with 
any business, financial operation, or venture is carried     members pledging to pay a regular amount into the club 
on and that is not a corporation, trust, or estate within    monthly. Some clubs have a committee that gathers 
the meaning of the New Jersey Gross Income Tax Act.          information on securities, selects the most promising se-
Only entities that qualify for and elect to be treated as a  curities, and recommends that the clubs invest in them. 
partnership for federal tax purposes (for example, limited   Most clubs require all members to vote for or against all 
liability companies and limited liability partnerships) are  investments, sales, trades, and the other transactions.
treated as partnerships under the New Jersey Gross In-
come Tax Act.                                                Investment clubs recognize as their main source of in-
                                                             come interest, dividends, and gains on disposition of 
“Tiered” Partnerships are arrangements in which one          their stock and securities and usually meet hedge fund 
partnership, the upper-tier or “parent” partnership, is a    status. Investment clubs generally are not considered 
member of, or holds an ownership interest in, another        a business. An investment club is required to file Form 
partnership (called the lower-tier or “subsidiary” partner-  NJ-1065 but is not entitled to deduct any expenses 
ship). Tiered partnerships must complete Schedule A,         (unless it rises to the level of being in business). The 
NJ-1065 before completing lines 1 through 11 on the          member or partner of the investment club will report their 
front of the NJ-1065.                                        share of the investment club’s income or loss as distribu-
                                                             tive share of partnership income.
Partner means any owner of a partnership interest.
                                                             If an investment club meets the following criteria, it will 
Nonresident Noncorporate Partner means an individ-           be exempt from the $150 per owner annual partnership 
ual, an estate, or a trust subject to taxation pursuant to   filing fee and from the requirement that a partnership 
the “New Jersey Gross Income Tax Act” that is not a resi-    make payments on behalf of its nonresident owners. The 
dent taxpayer or a resident estate or trust under that Act.  investment club must be an entity that is classified as a 
                                                             partnership for federal income tax purposes, all of the 
Nonresident Corporate Partner means a partner that is 
                                                             owners are individuals, and all of the assets are securi-
not an individual, an estate, or a trust subject to taxation 
                                                             ties, cash, or cash equivalents. The market value of the 
pursuant to the New Jersey Gross Income Tax Act, that 
                                                             total assets do not exceed, as measured on the last day 
is not a corporation exempt from tax pursuant to N.J.S.A. 
                                                             of its privilege period, an amount equal to the lesser of 
54:10A-3, and that does not maintain a regular place of 
                                                             $363,300 or $50,900 per owner of the entity. The invest-
business in this State other than a statutory office.
                                                             ment club is not required to register itself or its member-
Qualified Investment Partnership means a partner-            ship interests with the federal Securities and Exchange 
ship that has more than 10 members or partners with          Commission.
no member or partner owning more than a 50% interest 
in the entity and that derives at least 90% of its gross     Who Must File
income from dividends, interest, payments with respect       Every partnership that has income or loss derived from 
to securities, loans, and gains from the sale or other dis-  sources in the State of New Jersey, or has any type of 
position of stocks or securities or foreign currencies or    New Jersey resident partner, must file Form NJ-1065. A 
commodities or other similar income (including but not       partnership must file even if its principal place of busi-
limited to gains from swaps, options, futures, or forward    ness is outside the State of New Jersey. The NJ-1065 is 
contracts) derived with respect to its business of invest-   not solely an information return. A filing fee and tax may 
ing or trading in those stocks, securities, currencies,      be imposed on the partnership. Partners subject to the 
or commodities, but “investment partnership” does not        Gross Income Tax must report and pay tax on their share 
include a “dealer in securities” within the meaning of sec-  of partnership income or loss.
tion 1236 of the federal Internal Revenue Code of 1986.
                                                             How to File
Hedge Fund Status is met for New Jersey tax purposes         Electronic Filing Mandate
if the investment entity’s only activity is the purchase,    Partnerships subject to the provisions of the Corpora-
holding, or sale of intangible personal property, such as    tion Business Tax Act (that is partnerships that remit tax 
commodities or securities, and such intangible personal      based on any nonresident corporate and nonresident 
property is not held for sale to customers as defined at     noncorporate partner’s allocable share of NJ partner-
N.J.S.A. 54A:5-8c. A partnership that qualifies for hedge    ship income) that utilize the services of a paid preparer 
fund status in one year may not meet the requirements        must file all their returns completed by that practitioner 
every year. The entity must evaluate its situation on a

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by electronic means. Payments of the partnership lia-        The Division may require that the complete federal 
bilities along with the submission of payment-related        Form 1065, including all schedules and supporting at-
returns (PART-200-T and CBT-206) must also be made           tachments, and any other documentation or information 
electronically either by the partnership or by a paid tax    deemed necessary be submitted during the course of an 
practitioner.                                                audit.

In addition, partnerships with 10 or more partners must      If at any time during the course of an audit the Division 
file all returns electronically regardless of whether or not deems it necessary, the partnership must make the 
they utilize the services of a paid tax preparer. To obtain  NJ-1065E available for all applicable partners.
the electronic filing and payment formats or to obtain 
additional information on electronic filing and payment      When to File
options, visit the New Jersey Division of Revenue and        Returns for Calendar Year 2021 are due April 18, 2022. 
Enterprise Services’ website at www.state.nj.us/treasury/    Fiscal year returns are due the 15th day of the fourth 
revenue/partnerships.shtml or email the Division of Rev-     month after the end of the tax year.
enue and Enterprise Services at e-GovServices@treas.
nj.gov.                                                      Any short period return must be filed by the due date of 
                                                             the federal Form 1065. The partnership should use the 
NJ-1065 filers that do not use the services of a paid tax    most current form available from the Division of Taxation.
preparer and who have less than 10 partners have the 
option to file by electronic means or on paper.              Postmark Date. All New Jersey Income Tax returns 
                                                             postmarked on or before the due date of the return are 
What to File                                                 considered to be filed on time. Returns postmarked after 
The following forms and statements must be included          the due date are deemed to be late. The filing date for a 
with the NJ-1065:                                            late return is the day the return is received by the Divi-
                                                             sion, not the postmark date.
• Schedule NJK-1 for every partner;
• Pages 1 through 5 of the federal Form 1065, federal        Where to File
  Form 8825, federal Schedule D, and any federal ex-         Mail your completed NJ-1065 to:
  tension request forms filed;                               NJ Division of Taxation – Revenue Processing Center 
                                                             PO Box 194
• Schedule NJ-NR-A if any of the following conditions 
                                                             Trenton NJ 08646-0194
  apply: (1) the partnership is doing business both in-
  side and outside New Jersey, or (2) 100% of the part-      Mail your completed PART-200-T to:
  nership’s business is carried on outside New Jersey;       NJ Division of Taxation – Revenue Processing Center 
• Schedule J, Corporation Allocation Schedule, for tax       Extension of Time to File NJ-1065
  remittance purposes if the partnership is not a quali-     PO Box 642
  fied investment partnership, investment club, or is not    Trenton NJ 08646
  listed on a United States national stock exchange, 
  but has a nonresident noncorporate partner or a non-       Mail your completed NJ-1065-V to:
  resident corporate partner. Schedule J is not required     NJ Division of Taxation – Revenue Processing Center 
  for a partnership that meets hedge fund status if its      Filing Fee on Partnerships
  only nonresident partners are individuals, estates, or     PO Box 642
  trusts;                                                    Trenton NJ 08646

• Schedule J, Corporation Allocation Schedule, is re-        Note: Do not attach the NJ-1065-V to or mail with 
  quired if the partnership includes nonresident partners    your NJ-1065.
  who do not have physical nexus to New Jersey and 
  the partnership wants to allocate the filing fee;          Extension of Time to File 
• Worksheet GIT-DEP, Gross Income Tax Depreciation           If a five-month extension is obtained for filing federal 
  Adjustment Worksheet, if applicable;                       Form 1065, then an automatic five-month extension is 
                                                             granted for submitting your NJ-1065. A copy of your ap-
• Schedule B, Sheltered Workshop Tax Credit, if              plication for federal extension, federal Form 7004, must 
  applicable;                                                be filed with your New Jersey return. Check the box 
• Schedule L, Complete Liquidation, if applicable.           labeled “Application for federal extension is attached” on 
                                                             the front of your NJ-1065. If you did not obtain a federal 
Form NJ-CBT-1065 must be completed if the entity cal-        extension and you need more time to file your New Jer-
culated a tax due on its nonresident partner(s).             sey NJ-1065, federal Form 7004 must be submitted as 
                                                             your request to New Jersey on or before the original due 
                                                             date of the return.

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In addition, any partnership that has a filing fee due must      Determining Gain or Loss on the Sale or 
file PART-200-T, Partnership Application for Extension of 
                                                                 Disposition of Partnership Assets, Koch 
Time to File NJ-1065. The applicable payment must ac-
company this form. PART-200-T must be postmarked on              Effect
                                                                 The partnership in determining gain or loss for New Jer-
or before the original due date of the return. See specific 
                                                                 sey purposes on the sale or disposition of partnership 
instructions found on back of PART-200-T.
                                                                 asset(s) must use the same basis in the asset(s) as 
There is no extension of time to pay the fee due. Penal-         used for federal tax purposes. The New Jersey Supreme 
ties and interest are imposed whenever the fee is paid           Court’s decision in Sidney & Dorothy Koch v. Director, 
after the original due date.                                     Division of Taxation does not apply to the sale, disposi-
                                                                 tion, or liquidation of assets by a partnership.
A five-month extension of time to file your NJ-1065 may 
be granted if at least 80% of the total fee reported on          Gains or losses incurred by a partnership are passed 
your NJ-1065 when filed is paid in the form of an install-       through to the partners to be reflected on their respec-
ment payment or other payment made by the original               tive New Jersey tax returns. Partners who are taxpayers 
due date.                                                        subject to New Jersey Gross Income Tax will generally 
                                                                 report this gain or loss as a component of their “Distribu-
An extension of time to file the NJ-1065 does not                tive share of partnership income” unless the partnership 
extend the time for filing the tax returns of the                had a complete liquidation.
partners.
                                                                 Resident taxpayers that sell or dispose of a partnership 
                                                                 interest may be entitled to a Koch-type adjustment to 
Time Limits for Assessing Additional Filing                      their federal basis in the partnership when determining 
Fees                                                             New Jersey gain or loss. The gain or loss on the sale 
Partnerships that are required to file an NJ-1065 may be         or disposal of the partnership interest will then be re-
subject to owing a filing fee. Filing fees are subject to the    flected on the taxpayer’s New Jersey return in the cat-
provisions of the Gross Income Tax Act. The Gross In-            egory of income “Net gains or income from disposition 
come Tax Act has a three-year statute of limitations (time       of property.” The sale or disposition of a partnership 
allowed by law) for the Division of Taxation to send a           interest is the only time a partner that is a taxpayer for 
bill. The Division generally has three years from the date       Gross Income Tax purposes can make Koch-type basis 
the entity filed its partnership return or the original due      adjustments.
date of the return, whichever is later, to send the entity 
a bill for additional filing fees. There is no time limit if the 
entity did not file a partnership return, or if the entity filed Forms and Assistance
                                                                 To get New Jersey tax forms:
a false or fraudulent return with the intent to evade tax. 
The time limit may be extended in certain circumstances.         • Visit our website at: 
                                                                   nj.gov/taxation 
Accounting Method                                                • Write to: 
A partnership’s accounting method(s) used for the                  NJ Division of Taxation  
NJ-1065 must be the same as the accounting meth-                   Taxpayer Form Services 
ods(s) used for federal Form 1065.                                 PO Box 269 
                                                                   Trenton NJ 08695-0269
Accounting Periods
The 2021 NJ-1065 should be used for Calendar Year                Assistance from a Division representative is available 
2021, or for a fiscal year that began in 2021. If filing for     by contacting the Division’s Customer Service Center at 
a fiscal year or a short tax year, enter at the top of the       (609) 292-6400.
NJ-1065 the month and day the tax year began, and the 
month, day, and year that it ended. The partnership’s tax        Electronic Filing Assistance
year for New Jersey Income Tax purposes must be the              For electronic filing assistance:
same as its tax year for federal income tax purposes.
                                                                 • Call the Division of Revenue and Enterprise Services’ 
                                                                   Call Center at (609) 292-9292
Passive Loss Limitations 
Passive loss limitations do not apply for New Jersey             • Download the needed formats from the New Jersey 
Gross Income Tax purposes. The full amount of current              Division of Revenue and Enterprise Services’ website 
loss may be used to offset income or gain, regardless of           at: www.state.nj.us/treasury/revenue
federal passive loss limitations.

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Amended Return or Federal Change                              A late filing penalty of 5% per month (or part of a month) 
An amended NJ-1065 must be filed if an amended                up to a maximum of 25% of the outstanding tax liability 
federal Form 1065 is filed, or if the Internal Revenue        when a return is filed after the due date or extended due 
Service changes or corrects any item of income, gain,         date may also be imposed.
or loss previously reported. The amended New Jersey 
return must be filed within 30 days of the date the           A late payment penalty of 5% of the outstanding tax bal-
amended federal Form 1065 is filed or, in the case of a       ance may be imposed.
federal audit, within 90 days after the final determination 
                                                              Interest will be calculated at 3% above the prime rate for 
of the change. When an amendment to the NJ-1065 
                                                              every month or part of a month the tax is unpaid, com-
results in a need to amend the Schedules NJK-1, an 
                                                              pounded annually. At the end of each calendar year, any 
amended Schedule NJK-1 must be forwarded to the 
                                                              tax, penalties, and interest remaining due (unpaid) will 
Division of Taxation and to each partner.
                                                              become part of the balance on which interest is charged.
An amended NJ-1065 and an amended Schedule NJK-1 
for each partner must also be filed to correct any error      Fraudulent Returns
on or reflect any change to the original NJ-1065, whether     Any person who deliberately fails to file a return, files 
or not an amended federal Form 1065 was filed for that        a fraudulent return, or attempts to evade the tax in any 
year.                                                         way may be liable for a penalty up to $7,500 or imprison-
                                                              ment for three to five years, or both.
To amend your original NJ-1065, get a blank NJ-1065 
for the tax year that is to be amended, and check the         Rounding Off to Whole Dollars
“Amended Return” box on the front of the form. Com-           Money items on the return and schedules can be shown 
plete the form, entering the corrected information, and       in whole dollars (eliminate amounts under 50 cents; 
attach an explanation of the changes. Entities sub-           enter amounts over 50 cents as the next higher dollar 
ject to the Electronic Filing Mandate as explained on         amount).
page 2 under “How to File” are required to file their 
amended return electronically. Entities that are not sub-
ject to the Electronic Filing Mandate have the option of      Signatures
                                                              The NJ-1065 is not considered to be a return unless 
filing their amended partnership return electronically or 
                                                              signed, either by a general partner, limited liability com-
mailing it to:
                                                              pany member or, if applicable, a receiver, trustee in 
NJ Division of Taxation                                       bankruptcy, or assignee.
Revenue Processing Center
PO Box 194                                                    Anyone who prepares a partnership return for a fee must 
Trenton NJ 08646-0194                                         sign the return as a “Paid Preparer” and must enter their 
                                                              Social Security number or federal practitioner tax identi-
                                                              fication number. The company or corporation name and 
Penalty and Interest Charges
A penalty of $100 for each month or part of a month           federal employer identification number must be included 
will be imposed for a partnership that is required to file    if applicable. The preparer required to sign the partner-
electronically but fails to do so. In addition, a late filing ship return must sign it by hand; signature stamps or la-
penalty of 5% per month (or part of a month) up to a          bels are not acceptable. If someone prepares the return 
maximum of 25% of the outstanding tax liability will also     at no charge, the paid preparer’s area does not need to 
be imposed.                                                   be completed. A tax preparer who fails to sign the return 
                                                              or provide a correct tax identification number may incur a 
The Division may impose a penalty against the partner-        $25 penalty for each omission.
ship if the partnership is required to file an NJ-1065 and 
(1) fails to file the return on time, including any exten-    Composite Return for Qualified Electing 
sion, (2) files a return that fails to show all the informa-  Nonresident Partners
tion required, or (3) fails to file an amended partnership    A partnership that has New Jersey source income can 
return within 90 days of the date a final federal determi-    file a composite return (NJ-1080-C) on behalf of its qual-
nation or disallowance is issued or within 90 days of the     ified nonresident partners who elect to be included in 
date the amended federal Form 1065 is filed, unless the       the composite filing. Tax will be calculated at the highest 
failure is due to reasonable cause and not due to willful     rate, which is 10.75%, without regard to each partner’s 
neglect.                                                      filing status, dependent exemptions, or any deductions. 
                                                              Composite estimated tax payments can also be made.
A penalty of $100 for each month or part of a month may 
be imposed for failure to file.

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A partner cannot participate in the composite return if:   Check the appropriate boxes to indicate if 
• The partner is an estate or trust;                       • An application for a federal extension is attached;
• The partner is a partnership or corporation;             • Permission has been granted for a substitute method 
• The partner files on a fiscal-year basis;                  of allocation;
• The partner is a New Jersey resident during any part     • Complete Liquidation;
  of the year;                                             • This is a Qualified Investment Partnership;
• The partner derives income from New Jersey sources       • This partnership is listed on a United States national 
  other than the income from this or any other compos-       stock exchange;
  ite return.                                              • The partnership meets hedge fund status; 
Every participating partner must make the election to      • This is an Investment Club that is exempt from the 
be part of the composite return in writing by filing an      filing fee and the requirement that a partnership make 
NJ-1080E with the filing entity each year. The elections     payments on behalf of its nonresident owners in ac-
must be maintained in the partnership files. When filed,     cordance with the criteria outlined under “General 
the composite return must include a list of the partners     Instructions;”
who are participating, as well as a list of those who have • A composite return is filed for nonresident partners; 
not elected, or are not qualified, to participate in the   • During the period covered by the return, the partner-
composite return. The list must include each partner’s       ship acquired or disposed of, directly or indirectly, a 
name, address, and federal identification number. A          controlling interest in certain commercial property. 
qualified electing nonresident participant cannot revoke     Certain commercial property is identified as Class 4A 
an election to be included in the composite return or        commercial property as defined in N.J.A.C. 18:12-2.2;
                                                            
make an election to be included in the composite return    • This is a Tiered Partnership;
after April 15 following the close of the tax year.
                                                           • This is a General Partnership;
If a composite return is filed, check the box labeled      • This is a Limited Partnership;
“Composite Return is filed for Nonresident Partners” on    • This is a Limited Liability Company; or
the front of the, NJ-1065.
                                                           • This is a Limited Liability Partnership.

Line-by-Line Instructions                                  Federal Partnership Income (Lines 1–11)
                                                           Note: Tiered partnerships must first complete Sched-
Reporting Period
                                                           ule A and partnerships that have had a complete liqui-
If you are reporting for a period other than Calendar Year 
                                                           dation must complete Schedule L before completing the 
2021, enter the beginning and ending dates of your fiscal 
                                                           front of the NJ-1065.
year.
                                                           Line 1 – Ordinary Income (Loss) From Trade or 
Partnership Name, Address, Identification                  Business Activities
Enter the exact legal name, trade name, if any, and ad-    Enter on line 1 the amount of ordinary income or loss de-
dress of the partnership. The legal name is the name       rived from the partnership’s trade or business activities. 
in which the business owns property or acquires debt.      This will be the amount reported on line 1, Schedule K, 
Enter the trade name, registered alternate name, (d/b/a    federal Form 1065.
name) if different from the partnership’s legal name.
                                                           Line 2 – Net Income (Loss) From Rental Real Estate 
Enter the partnership’s federal employer identification    Activities
number (FEIN), principal business activity, and date the   Enter on line 2 the net income or loss from rental real es-
business was started.                                      tate activities (attach a copy of your federal Form 8825). 
                                                           This will be the amount reported on line 2, Schedule K, 
Enter the number of resident partners and the number of    federal Form 1065. 
nonresident or foreign partners in the spaces provided. 
Each partner’s residency status must be determined as      Line 3 – Net Income (Loss) From Other Rental 
of the close of the partnership’s tax year.                Activities 
                                                           Enter on line 3 the net income or loss from other rental 
Check the appropriate boxes to indicate whether the re-    activities. This will be the amount reported on line 3c, 
turn is a(n)                                               Schedule K, federal Form 1065.
• Initial return; 
• Final return; or                                         Line 4 – Guaranteed Payments to Partners
                                                           Enter on line 4 the amount of guaranteed payments to 
• Amended return.                                          partners reported on line 4, Schedule K, federal Form 
                                                           1065.

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Line 5 – Interest Income connection with the disposition of exempt New Jersey
Enter on line 5 the amount of interest income reported or federal obligations, you must add back the amount of
on line 5, Schedule K, federal Form 1065. such loss on this line.

Line 6 – Dividend Income Line 13c – Total Additions
Enter on line 6 the amount of dividend income reported Add lines 13a and 13b and enter the result.
on line 6, Schedule K, federal Form 1065.
Line 14 – Subtotal
Line 7 – Royalty Income Add lines 12 and 13c and enter the result.
Enter on line 7 the royalty income reported on line 7,
Schedule K, federal Form 1065. New Jersey Subtractions
Line 15a – Net Income (Loss) From Rental Real
Line 8 – Net Gain (Loss) From Disposition of Estate Activities
Property Enter on line 15a any income or loss that resulted from
Enter on line 8 the total of the net short-term and long- rental real estate activities and is included in the amount
term gains and/or losses reported on lines 8 and 9, reported on lines 1 or 2.
Schedule K, federal Form 1065. Attach a copy of Sched-
ule D, federal Form 1065. Line 15b – Net Gain (Loss) From Disposition of Real
Property
Line 9 – Net IRC Section 1231 Gain (Loss) Enter on line 15b any gain or loss that resulted from the
Enter on line 9 the net IRC Section 1231 gain or loss re- sale, exchange, or disposition of real property and is in-
ported on line 10, Schedule K, federal Form 1065. cluded in the amount reported on lines 1, 8, or 9.

Line 10 – Other Income (Loss) Line 15c – Guaranteed Payments to Partners
Enter on line 10 any other income or loss that is not in- Enter on line 15c the amount of guaranteed payments to
cluded on lines 1 through 9 above. This will include the partners reported on line 4.
amount reported on line 11, Schedule K, federal Form
1065. If any amount is reported on this line, you must at- Line 15d – Interest Income From Federal Obligations
tach a schedule identifying the income or loss. Enter on line 15d any interest from federal obligations
that is excludable from New Jersey gross income and is
Line 11 – Tax-Exempt Interest Income included in the amount reported on lines 5 or 6.
Enter on line 11 the amount of tax-exempt interest in-
come reported on line 18a, Schedule K, federal Form Line 15e – Interest Income From New Jersey
1065. Obligations
Enter on line 15e the amount of interest income from
Line 12 – Subtotal New Jersey obligations that is excludable from New Jer-
Add lines 1 through 11 and enter the result. sey gross income and is included in the amount reported
on lines 6 or 11.
New Jersey Additions
Line 13a – Taxes Based on Income Note: For lines 15d and 15e, amounts excludable from
Enter on line 13a the amount of taxes based on income income include interest and dividends on obligations
that were deducted to determine ordinary income (loss) of the State of New Jersey or any of its political subdi-
on line 1. visions and from tax-exempt obligations of the United
States government, its territories, or instrumentalities.
Line 13b – Other Additions – Specify Distributions from New Jersey qualified investment funds
Enter on line 13b any other items deducted from or not are also exempt, as are distributions from other invest-
included on lines 1 through 11 that are not excludable ment funds, but only to the extent the distribution is de-
under the New Jersey Gross Income Tax Act. rived from obligations of the type described at N.J.S.A.
54A:6-14, et seq.
If an asset has been placed in service since January 1,
2004, refer to Worksheet GIT-DEP. This worksheet is Line 15f – IRC Section 179 Expense
available on the Division’s website. Include any net addi- Enter on line 15f the IRC Section 179 expense
tion adjustment from Worksheet GIT-DEP, if applicable, deduction.
if federal income included deduction of federal special
depreciation allowance or IRC Section 179 expense; Line 15g – Other Subtractions – Specify
federal Section 179 recapture income; or a gain or loss Enter on line 15g any other items that are excludable
on disposition of such asset. or deductible from the income included in the subtotal
reported on line 12 for New Jersey Gross Income Tax
Specify each item reported. If the amount reported purposes. Specify each item subtracted.
on line 12, NJ-1065, included any loss incurred in

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Examples of some items that might be reported on this       carried on in New Jersey or 0% if all partnership ac-
line are:                                                   tivities are carried on outside New Jersey. Multiply the 
                                                            amount on line 16a by this percentage and enter the re-
• Dividends from exempt federal and New Jersey obli-
                                                            sult on line 16b, column B.
  gations described at N.J.S.A. 54A:6-14;
• Gains from the sale of exempt federal and New             Where a partnership’s activity is carried on both within 
  Jersey obligations excludable pursuant to N.J.S.A.        and outside New Jersey, the portion of the partner-
  54A:5-1c;                                                 ship’s income, gains, expenses, or losses attributable to 
                                                            sources within New Jersey must, except as provided be-
• Meal and entertainment expenses that constitute or-       low, be determined by use of the NJ-NR-A as prepared 
  dinary business expenses incurred in the conduct of       by the partnership.
  a trade or business that are not deductible for federal 
  purposes;                                                 Where a partnership’s activity is carried on both within 
•  If an asset has been placed in service since             and outside New Jersey and the partnership believes 
                                                            that the determination of the portion of the partner-
  January 1, 2004, refer to Worksheet GIT-DEP. This 
                                                            ship’s income, gains, expenses, or losses attributable to 
  worksheet is available on the Division’s website. In-
                                                            sources within New Jersey by use of the NJ-NR-A does 
  clude any net subtraction adjustment from Worksheet 
                                                            not provide an equitable allocation of such items, and 
  GIT-DEP, if applicable, if federal income included 
                                                            the books and records of the partnership will disclose to 
  deduction of federal special depreciation allowance or 
                                                            the Director’s satisfaction a more appropriate method of 
  IRC Section 179 expense; federal Section 179 recap-
                                                            allocating such items, the partnership can request from 
  ture income; or a gain or loss on disposition of such 
                                                            the Director an exception from the use of the NJ-NR-A. 
  asset.
                                                            Such request must be made in writing to: Gross Income 
Note: A partnership is not entitled to a basis adjustment   Tax Branch, Business Allocation Exemption, PO Box 
in the calculating and reporting of partnership gain or     288, Trenton, NJ 08695-0288.
loss from the sale or disposition of partnership assets 
                                                            Your request for exception from the use of the NJ-NR-A 
as was extended to individuals, as in the Koch case, on 
                                                            must set forth the basis of the request and the substitute 
the sale or disposition of a partnership interest. The part-
                                                            method of allocation requested to be used in lieu of the 
nership must always use federal adjusted basis when 
                                                            NJ-NR-A. The substitute method of allocation cannot 
determining gain or loss. Only taxpayers as defined pur-
                                                            be utilized prior to the submission of the partnership’s 
suant to N.J.S.A. 54A:1-2.l are entitled to a Koch-type 
                                                            exception request and the approval of such request by 
adjustment.
                                                            the Director. The partnership’s exception request, once 
Line 15h – Total Subtractions                               approved, must be made every three years, unless the 
Total lines 15a through 15g and enter the result.           Director or the partnership requests a change sooner.

Line 16a – Subtotal                                         Note: A partnership that is not a qualified investment 
Subtract line 15h from line 14 and enter the result.        partnership, investment club, or that is not listed on a 
                                                            United States national stock exchange, but has a non-
                                                            resident noncorporate partner or a nonresident corporate 
New Jersey Allocated Income 
                                                            partner must also complete Schedule J, Corporation 
Line 16b – New Jersey Allocated Adjusted 
                                                            Allocation Schedule. Schedule J is not required for 
Partnership Income
                                                            a partnership that meets hedge fund status if its only 
A Business Allocation Schedule, Form NJ-NR-A, must 
                                                            nonresident partners are individuals, estates, or trusts. 
be completed by every partnership entity, including those 
                                                            Schedule J is to be completed based on the partnership 
that have met hedge fund status, that is not reporting 
                                                            entity’s information, not the nonresident partner’s infor-
100% of its activity to New Jersey or that has not been 
                                                            mation. The corporation business allocation factor will be 
granted permission to use a substitute method of alloca-
                                                            reported on line 1 of the Partners Directory. Schedule J 
tion. Failure to file the NJ-NR-A or to check the box that 
                                                            is required if the partnership includes nonresident part-
a substitute method of allocation has been granted 
                                                            ners who do not have physical nexus to New Jersey and 
may result in 100% of your partnership’s income or loss 
                                                            the partnership wants to allocate their filing fee.
being sourced to New Jersey.
Enter the business allocation percentage from line 5,       Line 17 – Net Income (Loss) From Rental Real Estate 
                                                            Activities
NJ-NR-A on the line provided at 16b. A percentage 
                                                            Enter on line 17, column A, the amount of net income or 
must be entered unless you have been granted per-
                                                            loss from rental real estate activities that was reported 
mission to use a substitute method of allocation. 
                                                            on line 15a.
If permission has been granted, leave the line at 
16b blank and enter the actual New Jersey source 
amount. Enter 100% if all partnership activities are

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Enter on line 17, column B, the portion of the amount Line 23 – Net Gain (Loss) From the Disposition of
reported in column A that was derived from real property Assets as a Result of a Complete Liquidation
physically located in New Jersey. Enter on line 23, column A, the amount from line 12, col-
umn D of Schedule L.
Line 18 – Net Gain (Loss) From Disposition of Real
Property Enter on line 23, column B, the amount from line 12, col-
Enter on line 18, column A, the amount of gain or loss umn E of Schedule L.
from the disposition of real property reported on line 15b.
Line 24 – Total Nonresident Noncorporate Partners
Enter on line 18, column B, the portion of the amount re- Share of Tax
ported in column A that was derived from the disposition Enter on line 24, column B, the total nonresident non-
of real property physically located in New Jersey. corporate partners share of tax reported on line 2c, col-
umn J, of the Partners Directory.
Line 19 – Net Partnership Income (Loss)
Add lines 16a, 17, and 18, column A, and enter the sum Line 25 – Total Nonresident Corporate Partners
on line 19, column A. Share of Tax
Enter on line 25, column B, the total nonresident corpo-
Add lines 16b, 17, and 18, column B, and enter the sum rate partners share of tax reported on line 2c, column K,
on line 19, column B. of the Partners Directory.

Line 20 – Income (Loss) From Tiered Partnership(s) Note: If tax is reported on line 24 and/or line 25,
Enter on line 20, column A, the amount, if any, of income NJ-CBT-1065 must be completed.
or loss from other partnerships as reported on line 13,
column A, of Schedule A, Part II, NJ-1065.
Partners Directory
Enter on line 20, column B, the amount, if any, of income List the partners in order of their ownership interest in
or loss from other partnerships as reported on line 13, the partnership, beginning with the partner who holds the
column B, of Schedule A, Part II, NJ-1065. largest share.

Line 21 – Partnership Income (Loss) Note: A partnership that is a qualified investment part-
Add lines 19 and 20, column A, and enter the sum on nership, an investment club, or that is listed on a United
line 21, column A. States national stock exchange does not have to com-
plete Schedule J, Corporation Allocation Schedule. A
Add lines 19 and 20, column B, and enter the sum on partnership that meets hedge fund status and whose
line 21, column B. only nonresident partners are individuals, estates, or
trusts does not have to complete Schedule J. All other
Line 22a – Guaranteed Payments to Partners
partnerships that have nonresident noncorporate part-
Enter on line 22a, column A, the amount of guaranteed
ners or nonresident corporate partners must complete
payments to partners reported on line 15c.
Schedule J and file it with the NJ-1065. They must also
Line 22b – Guaranteed Payments to Partners – complete columns H, I, J, and K on the Partners Direc-
Pension tory for each nonresident noncorporate and nonresi-
Enter on line 22b, column A, the amount of guaranteed dent corporate partner.
payments to retired partners who are receiving such
Line 1 – Corporation Allocation Factor
payments as a result of a period of service to the part-
Enter the allocation factor from line 1h of Schedule J on
nership pursuant to a retirement agreement or pension
line 1 of the Partners Directory.
plan.
If you are a qualified investment partnership, investment
Line 22c – Net Guaranteed Payments to Partners
club, listed on a United States national stock exchange,
Subtract the amount on line 22b from the amount on line
or meet hedge fund status whose only nonresident part-
22a and enter the result on line 22c, column A.
ners are individuals, estates, or trusts, enter zero.
Multiply the amount from line 22c, column A, by the busi-
Partnerships should verify the residency status of each
ness allocation percentage on line 16b. Enter the result
partner before completing column A. Partnerships are
on line 22c, column B.
not to remit tax on behalf of resident partners. Resident
If a substitute method of allocation was granted, enter partners will not receive a credit on their resident New
the actual New Jersey source amount. Jersey tax returns for any payments made on their be-
half by the partnership.

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Column A: Use the following codes to identify the part- Enter a “Y” if this is the final Schedule NJK-1 for the
ner’s residency status and type: partner.

RI – New Jersey Resident Individual Note: The amounts listed in columns C and D represent
NR – Nonresident Individual the distributive share of partnership income (loss) and
PI – Part-Year Resident Individual the amounts listed in columns E and F represent the
RP – New Jersey Resident Partnership net gain (loss) from disposition of assets as a result of a
NP – Nonresident Partnership complete liquidation that the partners who are subject to
NPM – Nonresident Partnership (see below) Gross Income Tax are required to report on their tax re-
RT – New Jersey Resident Trust turns. Columns C and D and columns E and F reflect the
NT – Nonresident Trust adjustments allowed for Gross Income Tax purposes that
RE – New Jersey Resident Estate are reported on page 1 of the NJ-1065. The amounts
NE – Nonresident Estate listed in columns H and I represent the nonresident
RC – New Jersey Corporation partner’s share of income for which the partnership is
FC – Non-New Jersey Corporation required to remit tax. Columns H and I do not reflect any
FCM – Non-New Jersey Corporation (see below) adjustments. The combined amounts reported in col-
EFC – Exempt Foreign Corporation umns C and D and in columns E and F may differ from
RO – New Jersey Resident Other the amounts reported in columns H and I.
NO – Nonresident Other
NOE – Nonresident Other (see below) Column C: Enter each partner’s Distributive Share of
NOM – Nonresident Other (see below) Partnership Income or Loss from line 4, column A, of
their Schedule NJK-1.
General partners must be identified. The letter “G” must
be added to the end of each existing code to designate if Column D: Enter each partner’s Distributive Share of
the partner is a general partner in the entity. Partnership Income or Loss from line 4, column B, of
their Schedule NJK-1.
Codes NPM, FCM, and NOM are used to identify non-
resident partners that maintain a regular place of busi- Column E: Enter each partner’s share of the net gain
ness in New Jersey other than a statutory office. No (loss) from the disposition of assets as a result of a com-
tax is to be remitted on their behalf or on behalf of an plete liquidation from line 6, column A, of their Schedule
exempt foreign corporation (EFC) or on a retirement plan NJK-1.
approved by the Internal Revenue Service (NOE).
Column F: Enter each partner’s share of the net gain
For codes NPM, FCM, NOM, EFC, and NOE, the part- (loss) from the disposition of assets as a result of a com-
nership must obtain and retain in its files a fully com- plete liquidation from line 6, column B of their Schedule
pleted and signed NJ-1065E. The form is valid for one NJK-1.
return period and a new form must be filed with the part-
nership for any subsequent return periods. If at any time Column G: Enter each partner’s share of pension in-
during the course of an audit the Division deems it nec- come from line 5, column A, of their Schedule NJK-1.
essary, the partnership must make the form(s) available.
Column H: Enter each nonresident noncorporate (codes
Attach a rider to explain the partner’s entity type in detail NR, NT, and NE) partner’s share of total income or
for codes RO, NO, and NOM. loss. No entry is required if the partnership is a qualified
investment partnership, investment club, is listed on
Column B: Enter each partner’s Social Security number a United States national stock exchange, or if the part-
(SSN) for individual partners or federal employer identifi- nership meets hedge fund status and has checked the
cation number (FEIN) for partners that are entities other appropriate boxes on the front of the NJ-1065.
than individuals, as well as each partner’s name and
address. For individuals, the statute requires that the Enter each nonresident corporate (codes NP, FC, and
address be that of the person’s principal residence. NO) partner’s share of total income or loss. No entry is
If the partner is an entity other than an individual, enter required if the partnership is a qualified investment part-
the partner’s business name. For corporations, enter nership or if it is listed on a United States national stock
the address of commercial domicile. If the partner is a exchange and has checked the appropriate boxes on the
disregarded entity, enter the FEIN, name, and address front of the NJ-1065.
of the beneficial owner of the DE. Enter each partner’s
ownership percentage as of the close of the tax year. If Add lines 1 through 11, plus any “Tax-exempt inter-
a partner disposed of all or part of an ownership interest est income” included on line 18 from their Schedule
during the year, list the partner by the ownership per- K-1, federal Form 1065.
centage before the disposition.

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Column I: Enter each nonresident partner’s share of          pay a filing fee. See the instructions for the Filing Fee 
New Jersey income. Multiply the amount from column H         Schedule that is part of PART-200-T, Partnership Appli-
by the corporation allocation factor on line 1 (above). If   cation for Extension of Time to File Form NJ-1065, to 
the amount in column H is a loss, do not make an entry       see if you are required to make a payment.
in column I.

Column J: Enter each nonresident noncorporate part-          Partnership Filing Fee
ner’s (codes NR, NT, and NE) share of tax. Multiply the      Any entity classified as a partnership for federal income 
amount from column I by 6.37%.                               tax purposes, other than an investment club, that has 
                                                             any income or loss derived from New Jersey sources 
If an amended return is filed and the result of multiply-    and that has more than two owners is required to make 
ing the amount from column I by 6.37% is less than the       a payment of a filing fee of $150 for each owner of an 
amount reported on the original Partners Directory, re-      interest in the entity up to a maximum of $250,000.
port the amount listed on the original Partners Directory. 
Do not report the lesser amount, since the partner is en-    Line 1 – Number of Partners
titled to claim credit for the originally reported amount.   Enter the applicable number of each type of owner in 
                                                             your entity on the lines 1a through 1c. The number of 
Column K: Enter each nonresident corporate part-             owners will generally be equal to the number of Sched-
ner’s (codes NP, FC, and NO) share of tax. Multiply the      ule NJK-1s issued. Enter the allocation factor from 
amount from column I by 9%.                                  line 1h of Part II of Schedule J in the box provided on 
                                                             line 1c. Add lines 1a–1c and enter the total on line 1d, 
If an amended return is filed and the result of multiplying  but do not enter more than $250,000.
the amount from column I by 9% is less than the amount 
reported on the original Partners Directory, report the      Line 2 – Installment Payment
amount listed on the original Partners Directory. Do not     Multiply the amount reported on line 1d by 50% and en-
report the lesser amount, since the partner is entitled to   ter the result. If you checked the box on the front of the 
claim credit for the originally reported amount.             return indicating that the return is a “Final Return,” enter 
                                                             zero.
Line 2a – Total This Page
Total all nonresident partners’ share of tax from columns    Line 3 – Installment Payment From 2020
J and K of page 3, NJ-1065. Enter zero if no tax is re-      Enter the amount from line 2 of the Partnership Filing 
ported in column(s) J and/or K.                              Fee section of your 2020 NJ-1065.

Line 2b – Total From ________ Additional Pages               Line 4 – PART-200-T Payment
Attached                                                     Enter the amount of the payment remitted with your 
Enter the total number of additional pages attached on       2021 Partnership Application for Extension of Time to 
the line provided. Enter the sum of the totals for columns   File NJ-1065.
J and K from each additional page attached. Enter zero 
if no tax is reported in column(s) J and/or K.               Lines 5 and 6
                                                             If the total of lines 1d and 2 is more than the total of lines 
Line 2c – Total Tax                                          3 and 4, there is a balance due. Complete line 5.
Add lines 2a and 2b from columns J and K and enter the 
results on line 2c. Carry the total from column J to line 24 If the total of lines 1d and 2 is less than the total of lines 
and the total from column K to line 25 on the NJ-1065.       3 and 4, there is an overpayment. Complete line 6.

Signature                                                    Line 5 – Balance Due
The return must be signed and dated by a general part-       Subtract lines 3 and 4 from the total of lines 1d and 2 
ner or limited liability company member.                     and enter any balance due here. Make check payable to 
                                                             “State of New Jersey–PART” and remit with completed 
Anyone who prepares a return for a fee must sign the         NJ-1065-V, Partnership Payment Voucher.
return as a “Paid Preparer” and enter their Social Se-
curity number or federal practitioner tax identification     Line 6 – Refund
number. Include the company or corporation name and          Subtract lines 1d and 2 from the total of lines 3 and 4 
federal employer identification number, if applicable. A     and enter the overpayment to be refunded.
tax preparer who fails to sign the return or provide a tax 
identification number may incur a penalty of $25 for each 
omission.                                                    Schedule NJK-1
                                                             Individual, trust, and estate partners are subject to New 
Note: A partnership that is not required to remit a pay-     Jersey Gross Income Tax on their share of the partner-
ment of tax on behalf of its nonresident noncorporate or     ship’s income, whether or not the income is actually 
nonresident corporate partners may still be required to

- 12 -

distributed. Partners who reside in New Jersey are taxed Disregarded Entities
on their share of the partnership’s income, regardless of If the partner is a DE, such as a single member LLC that
the source of the income. Nonresident partners are also did not elect to be treated as a corporation, check the
subject to New Jersey Gross Income Tax on their share box and enter the name and federal EIN of the DE.
of the partnership’s income, but only to the extent such
income is allocated to New Jersey. Partner’s Profit, Loss, and Capital Sharing
Percentages
If the partnership has met hedge fund status and has Enter in column (ii), the appropriate percentages as of
checked the hedge fund box listed on the partner’s the end of the partnership’s year. However, if a partner’s
Schedule NJK-1, the nonresident individual, trust, or interest terminated during the year, enter in column (i)
estate partner is not required to report the New Jersey the percentages that existed immediately before the ter-
source amount income from column B of their Schedule mination. When the profit or loss sharing percentage has
NJK-1 on their nonresident Gross Income Tax return. changed during the year, show the percentage before
the change in column (i) and the end-of-year percentage
Schedule NJK-1 provides each partner with information in column (ii). If there are multiple changes on the profit
regarding that partner’s share of partnership income. A and loss sharing percentage during the year, attach a
Schedule NJK-1 must be completed for every partner statement giving the date and percentage before each
that was a partner in the partnership at any time during change.
the year.
“Capital Ownership” means the portion of the capital that
Partners must be furnished with a copy of their Sched- the partner would receive if the partnership was liqui-
ule NJK-1 on or before the due date of the partnership dated at the end of the year and the undivided interests
return (NJ-1065). If a partnership interest is held by a in the partnership’s assets and liabilities were distributed.
nominee on behalf of another person, the partnership is
required to furnish Schedule NJK-1 to the nominee.
PART II – Income Information
The amounts reported in column A, Schedule NJK-1,
A copy of all NJK-1(s) must be retained by the partner-
represent the partner’s share of the partnership’s in-
ship as part of the partnership’s records.
come, gain, or loss from all sources as reported in
column A, NJ-1065. The partner’s share shall be de-
PART I – General Information termined by the partnership agreement in the same
Name and Address manner as the partner’s distributive share of partnership
Enter the name and address of both the partner and the income is determined for federal income tax purposes.
partnership. Enter the federal employer identification Column A, Schedule NJK-1, must be completed for ev -
number (FEIN) of the partnership and, if the particular ery partner, regardless of residency.
partner is an entity other than an individual, enter the
FEIN of the partner as well. If the partner is a person, The amounts reported in column B, Schedule NJK-1,
enter their Social Security number. If the partner is an represent the partner’s share of the partnership’s in-
Individual Retirement Arrangement (IRA), enter the come, gain, or loss allocated to New Jersey as reported
identification number of the custodian of the IRA, not the in column B, NJ-1065. Column B, Schedule NJK-1,
Social Security number of the person for whom the IRA should be completed for all partners.
is maintained. If the partner is a disregarded entity, enter
the FEIN, name, and address of the beneficial owner of Line 1 – Partnership Income (Loss)
the DE. Enter on line 1, column A, the partner’s share of part-
nership income or loss reported on line 21, column A,
If spouses each had an interest in the partnership, pre- NJ-1065.
pare a separate Schedule NJK-1 for each spouse. If
spouses held an interest together as one partner, pre- Enter on line 1, column B, the partner’s share of part-
pare one Schedule NJK-1. nership income or loss reported on line 21, column B,
NJ-1065.
Classification of Partner
Use the codes listed in the instructions for column A of Line 2 – Net Guaranteed Payments
the Partner’s Directory. Enter on line 2, column A, the partner’s amount of net
guaranteed payments reported on line 22c, column A,
Date Partner’s Interest in Partnership Began NJ-1065.
Enter the month, day, and year the partner obtained an
interest in this partnership. Enter on line 2, column B, the amount from column A
multiplied by the business allocation percentage from
line 16b, NJ-1065.

- 13 -

Line 3 – Partner’s 401(k) Contribution amount. The partner’s deduction is entered on the part-
Enter on line 3, column A, the amount of the partner’s ner’s Schedule NJK-1 and deducted on the partner’s
contribution to a 401(k) plan. Do not include contribu- Gross Income Tax return. See the Division’s website for
tions in excess of federal limits and taxable for federal qualification and calculation information.
income tax purposes on this line.
Enter the partner’s HEZ deduction.
Enter on line 3, column B, the amount from column A
multiplied by the business allocation percentage from Line 3 – Partner’s Sheltered Workshop Tax Credit
line 16b, NJ-1065. Enter on line 3 the partner’s share of the Available Shel-
tered Workshop Tax Credit from line 8 of the Partner-
Line 4 – Distributive Share of Partnership Income ship’s Schedule B, Sheltered Workshop Tax Credit.
(Loss)
Add lines 1 and 2, column A, then subtract line 3, PART IV
column A from this result. Enter the remainder on line 4, Supplemental Information
column A. Attach a separate schedule to provide any detailed infor-
mation affecting the partner’s share of income, such as
Add lines 1 and 2, column B, then subtract line 3, col- IRC §754 adjustments.
umn B from the result. Enter this amount on line 4, col-
umn B.
Business Allocation Schedule
Line 5 – Pension
Enter on line 5, column A, the partner’s share of guar- NJ-NR-A
anteed payments – pension reported on line 22b, If business activities are carried on both inside and out-
column A, NJ-1065. The partner to whom the guaranteed side New Jersey, business income may be allocated
payment was made must be receiving the payment as a to determine the amount of income from New Jersey
result of a period of service to the partnership pursuant sources.
to a retirement agreement or pension plan.
Be sure that the NJ-NR-A is enclosed with
Make no entry on line 5, column B. Pension income to the NJ-1065 and that the name and address on the
nonresidents is not subject to New Jersey Gross Income Business Allocation Schedule agree exactly with the
Tax. name and address on the return.

Line 6 – Net Gain (Loss) from the Disposition of Section 1 – Business Locations
Assets as a Result of a Complete Liquidation Use Section 1 to list the locations where the business
Enter on line 6, column A, the partner’s share of the net activities are conducted. In columns (a) and (b), list the
gain (loss) from the disposition of assets as a result of exact locations at which the business carries on activi-
a complete liquidation reported on line 23, column A, ties both inside and outside the State. List all business
NJ-1065. locations. In column (c), describe the places listed in
columns (a) and (b) (i.e., branch office, agency, factory,
Enter on line 6, column B, the partner’s share of the net warehouse, etc.). In column (d), indicate whether the
gain (loss) from the disposition of assets as a result of business rents or owns each location listed. Attach addi-
a complete liquidation reported on line 23, column B, tional sheets if necessary.
NJ-1065.

Section 2 – Average Values
PART III – Partner’s Information Use Section 2 to determine the average value of your
Line 1 – Nonresident Partner’s Share of New Jersey business assets.
Tax
Enter on line 1, the partner’s share of New Jersey tax The average value of property owned is determined by
reported in either column J or column K of the Partners adding (1) the book value of the property at the begin-
Directory. ning of the tax year and (2) the book value of the prop-
erty at the end of the tax year and dividing the sum by
If an amended Schedule NJK-1 is filed, do not report two.
less than the amount reported on the original Schedule
NJK-1. The average value of property rented or leased is val-
ued at eight times the annual rent. Rent includes any
Line 2 – Partner’s HEZ Deduction amounts paid in addition to, or accrued in lieu of, rent for
If the partnership is a qualified primary care medical or the period covered by the return (such as interest, taxes,
dental practice located in or within 5 miles of a Health insurance, and repairs).
Enterprise Zone (HEZ), the partnership must determine
if the partners are entitled to an HEZ deduction and the

- 14 -

Line 1 – Real Property Owned Line 2 – Total Receipts From All Sales, Services, and
Column A. Enter on line 1, column A, the average value Other Business Transactions
of the real property listed in Section 1 that was owned Line 2a – In New Jersey. Enter on line 2a the total of
for the period covered by the return. Include property lo- receipts from all sales made, services performed, and
cated both inside and outside New Jersey. business transactions conducted in New Jersey during
the period covered by the return. This includes sales
Column B. Enter on line 1, column B, the average value
made and services performed by partners, employees,
of the real property listed in Section 1 that was owned in
agents, agencies, or independent contractors of the
the State. Include only property located in New Jersey.
business situated at, or sent out from, the offices of the
business (or its agencies) located in New Jersey. For
Line 2 – Real and Tangible Property Rented
example, if a salesperson working out of the New Jersey
Column A. Enter on line 2, column A, the average value
office covers the states of New Jersey, New York, and
of property, both real and tangible, that was rented for
Pennsylvania, all sales made are to be allocated to New
the period covered by the return. Include property lo-
Jersey and reported on line 2a.
cated both inside and outside New Jersey.
Column B. Enter on line 2, column B, the average value Line 2b – Everywhere. Enter on line 2b the total of
receipts from all sales made, services performed, and
of property, both real and tangible, that was rented in the
business transactions conducted both inside and outside
State. Include only property located in New Jersey
New Jersey during the period covered by the return.
Line 3 – Tangible Personal Property Owned
Column A. Enter on line 3, column A, the average value Line 2c – Percentage in New Jersey. Divide the
amount on line 2a by the amount on line 2b. The result
of the tangible personal property that was owned and
will be 100% or less. Enter the result on line 2c.
used in the business for the period covered by the re-
turn. Include property located both inside and outside
Line 3 – Wages, Salaries and Other Personal
New Jersey.
Compensation Paid During the Year
Column B.Enter on line 3, column B, the average value Line 3a –In New Jersey. Enter on line 3a the total of
of the tangible personal property that was owned and wages, salaries, and other personal compensation paid
used in the business in the State. Include only property to employees in connection with operations carried on
located in New Jersey. in New Jersey during the period covered by the return.
Compensation is paid in connection with operations
Line 4 – Totals carried on in New Jersey if work is based in an office or
Column A. Add lines 1–3 of column A and enter the total other place of business located in New Jersey. Include
on line 4, column A. only amounts paid to employees on line 3a. Do not in-
clude payments to independent contractors, independent
Column B. Add lines 1–3 of column B and enter the to- sales agents, etc.
tal on line 4, column B.
Line 3b – Everywhere. Enter on line 3b the total com-
Section 3 – Business Allocation Percentage pensation paid to employees both inside and outside
Use Section 3 to determine the business allocation per- New Jersey during the period covered by the return. Do
centage that must be applied to business income. The not include payments to independent contractors, inde-
business allocation percentage must be applied to busi- pendent sales agents, etc.
ness income from all sources to determine the amount
from New Jersey sources. Line 3c – Percentage in New Jersey. Divide the
amount on line 3a by the amount on line 3b. The result
Line 1 – Average Values of Property will be 100% or less. Enter the result on line 3c.

Line 1a – In New Jersey. Enter on line 1a the average Add lines
Line 4 – Sum of New Jersey Percentages.
values of the business property in New Jersey from 1c, 2c, and 3c and enter the total on line 4.
line 4, column B, Section 2.
Line 5 – Business Allocation Percentage. Divide the
Line 1b – Everywhere. Enter on line 1b the average total on line 4 by three and enter the result on line 5.
values of the business property from everywhere (both Also enter this percentage on line 16b, NJ-1065:
inside and outside New Jersey) from line 4, column A,
Section 2. If one of the fractions (property, receipts, or payroll) is
missing, the other two percentages are added and the
Line 1c – Percentage in New Jersey. Divide the sum is divided by two. If two of the fractions are missing,
amount on line 1a by the amount on line 1b. The result the remaining percentage may be used as the allocation
will be 100% or less. Enter the result on line 1c. factor. A fraction is not missing merely because its nu-
merator is zero, but is missing if its denominator is zero.

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