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CBT-160-P Underpayment of Estimated NJ Partnership Tax
NJ Division of Taxation Attach to your tax return (Form NJ-CBT-1065)

Partnership Name Federal EIN

Part I How to Calculate Your Underpayment
Note: If you meet any of the exceptions that avoid the underpayment charge for ANY quarter, complete Part II.
(a)

1. Amount of 2020 Tax – Refer to line 1 instruction on reverse side................................................................................

2. 90% of line 1. ...............................................................................................................................................................

3. Prior year’s tax – Enter the amount of line 4 from the 2019 NJ-CBT-1065 ..................................................................

4. Enter the lesser of lines 2 or 3 .....................................................................................................................................
(a) (b) (c) (d)
5. Enter in columns (a) through (d) the installment dates that correspond to
the 15th day of the fourth, sixth, ninth months of your tax period and the
first month succeeding the close of your tax period .....................................

6. Enter 25% of line 4 in columns (a) through (d) ............................................

7. (a) Amount paid or credited for each period ................................................
(b) Overpayment of previous installment (enter any overpayment shown
on line 9 that is more than the total of all prior underpayments as a credit
against the next installment) ........................................................................

8. Add lines 7(a) and 7(b) ................................................................................
9. Underpayment (subtract line 8 from line 6) or overpayment (subtract line 6
from line 8) ...................................................................................................

Part II Exceptions (See Instructions)
10. Total amount paid or credited from the beginning of the tax year through
the installment dates that correspond to the 15th day of the fourth, sixth,
and ninth month of your tax period and the first month succeeding the
close of your tax period ................................................................................
11. Exception 1 – Tax based on the facts shown on the prior year’s return but 25% of tax 50% of tax 75% of tax 100% of tax
using current year’s rates. Refer to instructions on reverse side regarding
the taxable periods of less than one year ....................................................
22.5% of tax 45% of tax 67.5% of tax 90% of tax

12. Exception 2 – Tax based on annualized tax.................................................

Part III Installment Interest Due (See Instructions)

13. Amount of underpayment from line 9 ...........................................................

14. Enter the same installment dates used above at line 5 ...............................
15. Enter the date of payment or the 15th day of the fourth month after the
close of the tax year, whichever is earlier ....................................................
16. Number of months from the date on line 14 to the date on line 15.
(A part of a month is deemed to be a full month) .........................................

17. Interest .........................................................................................................
18. Installment interest due – Add columns (a), (b), (c), and (d) of line 17.
Enter the total here and include on line 5 of Form NJ-CBT-1065 ................................................................................................................

This Form May Be Reproduced

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CBT-160-P Instructions
Purpose of Form
This CBT-160-P is used by partnerships 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.

How to Use This Form
Complete Part I of CBT-160-P to find out if you have an underpayment for any of the four payment periods. If you have an
underpayment on line 9 (column a, b, c, or d), 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 CBT-160-P either to calculate the interest on under-
payment of estimated tax or to show that you qualify for any exception, attach CBT-160-P to your tax return, NJ-CBT-1065.

Part I – How to Calculate Your Underpayment
Complete lines 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 in column (a) the amount reported on line 4 of NJ-CBT-1065.
Line 7(b) – Enter any overpayment shown on line 9 that is more than the total of all earlier underpayments.
Line 9 – If line 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 (Part II, line 10) were made on time and are equal to or more than
either of the amounts computed as explained by the exceptions (lines 11 and 12) for the same payment period
(column a, b, c, or d).

Exception I – Tax Based on Prior Year’s Return Using Current Year’s Rates
This exception applies if the amount the partnership 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 covered 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 partnership would owe if
its estimated tax was based on a tax calculated from annualizing tax for the months preceding an installment date.

A partnership 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 six months or for the first eight months if the installment was required to be paid in the ninth month.
d. For the first nine months or for the first 12 months if the installment was required to be paid in the first month succeeding
the close of your tax period.

Part III – Installment Interest Due
If no exception applies, complete lines 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 partnership made more
than one payment for an installment, attach a separate calculation 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 part 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 online
at www.state.nj.us/treasury/taxation/interest.shtml.

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 1 of the calendar year immediately preceding the calendar
year in which payment was due or as redetermined by the Director in accordance with N.J.S.A. 54:48-2.

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