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Instructions for Form CBT-160-A
Purpose of Form
Form CBT-160-A is used by corporations (separate or combined filers) to determine whether they paid enough estimated tax, whether they are sub-
ject to an interest charge for underpayment of estimated tax, and if so, the amount of interest. Taxpayers with total gross receipts of less than $50
million should use this form.
How to Use This Form
Complete Part I of Form CBT-160-A 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. If you cannot meet either of the exceptions for a payment period, go to Part III. If you are using Form
CBT-160-A either to calculate the interest on underpayment of estimated tax or to show that you qualify for any exception, submit Form CBT-160-A
with your CBT-100, CBT-100S, or CBT-100U.
Part I – How to Calculate Your Underpayment
Complete lines 1 through 9. The instructions for most of these lines are on the form itself. Follow the instructions below for the lines indicated.
Line 1 – Enter the amount from line 6b, page 1 of Form CBT-100, line 4, page 1 of Form CBT-100S, or line 5, page 1 of Form CBT-100U.
Line 7b – 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 (line 10) were made on time and are equal to or more than either of the amounts calcu-
lated 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 taxpayer 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 re-
turn 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 taxpayer would owe if its estimated tax was
based on a tax calculated from annualizing tax for the months preceding an installment date.
A taxpayer 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 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 CBT-100 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 oth-
ers the rate is 9% (0.09).
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 corporation made more than one payment for an installment, include
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 15th day of the 4th month after
the close of the tax year, 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 inter-
est 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 payment was due or as redeter-
mined by the Director in accordance with N.J.S.A. 54:48-2.
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