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FORM 501-GIT
General Instructions
New Jersey has uncoupled from many provisions of IRC Section 199. For tax years beginning after December 31, 2004, the New Jersey
Domestic Production Activities Deduction is based on domestic production gross receipts derived exclusively from a lease, rental, sale, exchange
or other disposition of qualified production property which was manufactured or produced, as defined under NJSA 54A:5-15, by the taxpayer in
whole or in significant part within the United States.
The New Jersey deduction is not allowed for:
Qualified production property grown or extracted by the taxpayer
Films, electricity, natural gas, potable water, computer software or sound recordings produced by the taxpayer
Construction activities
Engineering or architectural services
Form 501-GIT must be used to calculate the New Jersey Domestic Production Activities Deduction allowable for gross income tax purposes. The
allowable deduction will be taken into consideration in determining the net distributive share of partnership income; net pro rata share of S
corporation income; net profits from business; net gains or income from disposition of property; and net gains or income from rents, reportable on
a NJ-1040, NJ-1040NR or NJ-1041.
Income from Partnerships and S corporations: A separate Form 501-GIT must be prepared by each partnership or S corporation with a New
Jersey filing requirement. The resulting New Jersey deduction will be taken into account by the partnership or S corporation in calculating the
income reported on the partner's or the shareholder's Schedule NJK-I. If the partnership or S corporation does not file a New Jersey return, the
partner or shareholder will calculate their New Jersey deduction on a Form 501-GIT using information which must be provided by the entity. The
resulting New Jersey deduction will be taken into account by the partner or shareholder in preparing their Worksheet A, Bulletin GIT-9P or
Worksheet B or Worksheet B Liquidated, Bulletin GIT-9S.
Net profits from business; rental and lease income; net gains from disposition of property: A separate Form 501-GIT must be prepared to
calculate the New Jersey Domestic Production Activities Deduction for each sole proprietorship, rental, lease, disposition of property or other
activity which meets the New Jersey criteria. The resulting deduction will be taken into consideration in determining the net profits from business,
net gains or income from rents, and net gains or net income from disposition of property reportable on Form NJ-1040, NJ-1040NR or NJ-104I.
Line Instructions
Taxpayer Name and Federal EIN or SS Number - Enter the name and identification number of the taxpayer filing Form CBT-100S, NJ-1065, NJ-
1040, NJ-1040NR or NJ-1041
Type of Activity - Identify the type of activity (i.e. sole proprietorship, disposition of property, rental) claiming the New Jersey Domestic Production
Activities Deduction.
Lines 1- 4, Column A - Enter the federal Domestic Production Activities information applicable to the entity or activity identified on this form.
Lines 1 - 4, Column B - Enter the information included in Column A that pertains to Federal qualifying production property grown or extracted or
any activity or service which is not allowable for New Jersey purposes.
Lines 1 -6 Column C - Subtract Column B from Column A and enter the result.
Line 7, Column C - Enter the entity's or activity's net income as determined for gross income tax purposes and without the domestic production
activities deduction.
Line 9, Column C - Enter 3% of line 8 for tax years beginning on or before December 31, 2006. Enter 6% for tax years beginning January 1,
2007 thru December 31, 2009. Enter 9% for tax years beginning after December 31, 2009.
Line 10, Column C - Enter the W-2 wages paid by the activity or entity for employees of the activity or entity. Do not include wages applicable to
production or services not allowed for the New Jersey deduction.
Line 13, Column C - Enter the portion of the entity's or activity's deduction from cooperatives (reported on federal 1099-PATR) which is not
applicable to qualifying production property grown or extracted or any other disallowed production or service.
Line 14, Column C - Add lines 12 and 13 - The amount on Line 14, the New Jersey Domestic Production Activities Deduction, is applied at the
activity or entity level in determining net gains or income reportable on Forms NJ-1065 or Worksheet A, Bulletin GIT-9P; CBT-100S Schedule K or
Schedule K Liquidated or Worksheet B or Worksheet B Liquidated, Bulletin GIT-9S; NJ-1040; NJ-1040NR or NJ-1041.
For net profits from business; net gains or income from disposition of property; net gains or net income from rents, royalties, patents and
copyrights the deduction is taken into consideration in determining the net gains or income reportable for that income category by the individual,
estate or trust.
For distributive share of partnership income the deduction is included on Form NJ-1065, Line 15g - Other Subtractions or on Worksheet A, Bulletin
GIT-9P, Line 16e, Other Subtractions.
For net pro rata share of S corporation income the deduction is reported on Form CBT-100S, Schedule K or Schedule K Liquidated, Part II, Line
6f or on Worksheet B or Worksheet B Liquidated, Bulletin GIT-9S, Line 4e.
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