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BFC-160-B (02-20) Page 2
INSTRUCTIONS
Purpose of Form
This Form BFC-160-B is used by corporations to determine whether they paid enough estimated tax, whether they are subject to an
interest charge for underpayment of estimated tax, and if so, the amount of interest. Taxpayers with total gross receipts of $50 million or
more should use this form.
How to Use This Form
Complete Part I of Form BFC-160-B to find out if you have an underpayment for any of the three payment periods. If you have an un-
derpayment on inel9 (Column a, b, or c), go to Part II, Exceptions. If you cannot meet either of the exceptions for a payment period, go
to Part III, Installment Interest Due. If you are using Form BFC-160-B either to calculate the interest on underpayment of estimated tax
or to show that you qualify for any exception, attach Form BFC-160-B to Form BFC-1.
Note: For 2019, a banking corporation that converts to a fiscal year basis to align its tax year with the combined group will not be as-
sessed penalties and interest on underpayments pursuant to N.J.S.A. 54:10A-4.12. The corporation must check the box on page
1 of Form BFC-1 indicating that it is filing as a “BFC-1-F Filer.” For more information, see TB-91, Banking Corporations and Com-
bined Returns.
Part I – How to Calculate Your Underpayment
Complete inesl 1 through 9 in Part I. The instructions for most of these lines are on the form itself. Follow the instructions below for the
lines indicated.
Line 1 – Enter the total of line 6from page 1 of Form BFC-1.
Line 7(b) – Enter any overpayment shown on inel 9 that is more than the total of all earlier underpayments.
Line 9 – Ifline 9 shows an underpayment, complete Part II to see if either of the exceptions apply.
Part II – Exceptions
You will not have to pay interest if all of your tax payments (inel10) were made on time and are equal to or more than either of the
amounts calculated as explained by the exceptions (inesl 11 and 12) for the same payment period (Column a, b, or c).
Exception I – Tax Based on Prior Year’s Return Using Current Year’s Rates
This exception applies if the amount the corporation paid is equal to or more than the tax calculated by using the current year’s
rates but based on the facts shown on the prior year’s return and the law that applies to the prior year. If the prior year return cov-
ered a period of less than a year, the prior return must be annualized by dividing the taxable net income by the number of whole
months covered by the short period return and multiplying by 12.
Exception II – Tax Based on Annualized Tax
This exception applies if the estimated tax paid was equal to or more than 90% of the amount the corporation would owe if its es-
timated tax was based on a tax calculated from annualizing tax for the months preceding an installment date.
A corporation may annualize its tax as follows:
a. For the first three months if the installment was required to be paid in the fourth month.
b. For the first three months or for the first five months if the installment was required to be paid in the sixth month.
c. For the first nine months or for the first 11 months if the installment was required to be paid in the 12th month.
Note: Initial New Jersey S Corporations should use the previous year BFC-1 income and the applicable CBT-100S rate.
a. There is no rate of tax on entire net income that is not subject to federal corporate income taxation. All returns are subject to
at least the minimum tax.
b. The rate on taxable income that is subject to federal corporate income taxation is 6.5% (0.065) for taxpayers with entire net
income of $50,000 or less. The rate is 7.5% (0.075) for those with entire net income greater than $50,000 but not greater than
$100,000. For all others the rate is 9% (0.09).
Part III – Installment Interest Due
If no exception applies, complete inesl 13 through 18.
A payment of estimated tax on or before any installment date is considered a payment of any previous underpayment only to the extent
the payment is more than the amount of the current installment as figured on line 6. If the corporation made more than one payment for
an installment, attach a separate computation for that installment.
Interest is calculated on the amount of the underpayment from the installment due date to the date of payment or the original due date
of the final tax return, whichever is earlier. The annual interest rate is 3% above the average predominant prime rate and is imposed
each month or fraction of a month the underpayment exists. Changes in the average predominant prime rate must be reflected in the
interest calculation. The interest rates assessed by the Division of Taxation are published on the Division’s website.
The average predominant prime rate is the rate as determined by the Board of Governors of the Federal Reserve System, quoted by
commercial banks to large businesses on December 1st of the calendar year immediately preceding the calendar year in which pay-
ment was due or as re-determined by the Director in accordance with N.J.S.A. 54:48-2.
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