PDF document

- 1 -

2023 NJ-CBT-1065
Instructions
Nonresident Noncorporate Partner means an individ-
GIT and CBT Partnership Returns
The Division has two partnership tax returns: Forms ual, an estate, or a trust subject to taxation pursuant to
NJ-1065 and NJ-CBT-1065. The Gross Income Tax Act the New Jersey Gross Income Tax Act that is not a resi-
(GIT) at N.J.S.A. 54A:8-6 requires entities classified as dent taxpayer or a resident estate or trust under that Act.
a partnership for federal income tax purposes having
a resident owner or income derived from New Jersey Nonresident Corporate Partner means a partner that is
sources to file a Gross Income Tax return, NJ-1065. not an individual, an estate, or a trust subject to taxation
Partnerships with more than two owners and income or pursuant to the New Jersey Gross Income Tax Act, that
loss from New Jersey sources may also be subject to is not a corporation exempt from tax pursuant to N.J.S.A.
a filing fee. The fee is calculated and reported on the 54:10A-3, and that does not maintain a regular place of
NJ-1065. business in this State other than a statutory office.

The Corporation Business Tax Act (CBT) at N.J.S.A. Qualified Investment Partnership means a partner-
54:10A-15.11 imposes a tax on certain partnerships that ship that has more than 10 members or partners with
have nonresident owners. Partnerships subject to the no member or partner owning more than a 50% interest
CBT tax must file the NJ-CBT-1065. The separate forms in the entity and that derives at least 90% of its gross
help distinguish the differences that exist between the income from dividends, interest, payments with respect
Gross Income Tax and Corporation Business Tax Acts. to securities, loans, and gains from the sale or other dis-
position of stocks or securities or foreign currencies or
The filing fee is reported directly on the NJ-1065. The commodities or other similar income (including but not
GIT filing fee is remitted with the Partnership Payment limited to gains from swaps, options, futures, or forward
Voucher (NJ-1065-V). If the entity is also required to contracts) derived with respect to its business of invest-
calculate and report Corporation Business Tax, the entity ing or trading in those stocks, securities, currencies,
must complete and file the NJ-CBT-1065. If the entity or commodities, but “investment partnership” does not
has a CBT balance due, it is remitted with the Corpo- include a “dealer in securities” within the meaning of sec-
ration Business Tax–Partnership Payment Voucher tion 1236 of the federal Internal Revenue Code of 1986.
(NJ-CBT-V).
Hedge Fund Status is met for New Jersey tax purposes
Partnerships that are members of an entity electing to if the investment entity’s only activity is the purchase,
pay the Pass-Through Business Alternative Income Tax holding, or sale of intangible personal property, such as
and that choose to apply the credit for their share of the commodities or securities, and such intangible personal
tax to their nonresident partners tax must claim the credit property is not held for sale to customers as defined at
on the NJ-CBT-1065. N.J.S.A. 54A:5-8c. A partnership that qualifies for hedge
fund status in one year may not meet the requirements
every year. The entity must evaluate its situation on a
General Instructions yearly basis. The entity, not the partner, must make the
Definitions determination.
Partnership, for tax purposes, means and includes a
syndicate, group, pool, joint venture, and any other un- Investment Clubs are usually small groups of individ-
incorporated organization through or by means of which uals who pool their money to invest in stock or other
any business, financial operation, or venture is carried securities. The group usually operates informally with
on and that is not a corporation, trust, or estate within members pledging to pay a regular amount into the club
the meaning of the New Jersey Gross Income Tax Act. monthly. Some clubs have a committee that gathers
Only entities that qualify for and elect to be treated as a information on securities, selects the most promising se-
partnership for federal tax purposes (for example, limited curities, and recommends that the clubs invest in them.
liability companies and limited liability partnerships) are Most clubs require all members to vote for or against all
treated as partnerships under the New Jersey Gross In- investments, sales, trades, and the other transactions.
come Tax Act.
Investment clubs recognize as their main source of in-
“Tiered” Partnerships are arrangements in which one come interest, dividends, and gains on disposition of
partnership, the upper-tier or “parent” partnership, is a their stock and securities and usually meet hedge fund
member of, or holds an ownership interest in, another status. Investment clubs generally are not considered
partnership (called the lower-tier or “subsidiary” partner- a business. An investment club is required to file Form
ship). Tiered partnerships must complete Schedule A, NJ-1065 but is not entitled to deduct any expenses
NJ-1065 before completing Schedule O, if applicable. (unless it rises to the level of being in business). The
member or partner of the investment club will report their
Partner means any owner of a partnership interest.

- 2 -

Enlarge image

share of the investment club’s income or loss as distribu-    What to File
tive share of partnership income.                             The following forms and statements must be included 
                                                              with the NJ-CBT-1065:
If an investment club meets the following criteria, it will 
be exempt from the $150 per owner annual partnership          •  Schedule T, Tiered Partnership Payment Schedule, 
filing fee and from the requirement that a partnership         if the entity is claiming (1) credit for tax remitted on 
make payments on behalf of its nonresident owners.             its behalf by another entity or (2) its share of Pass-
The investment club must be an entity that is classified       Through Business Alternative Income Tax. The Name, 
as a partnership for federal income tax purposes, all of       Federal EIN, Share of New Jersey Tax reported on 
the owners are individuals, and all of the assets are se-      line 1 of Part III of each Schedule NJK-1, and Share 
curities, cash, or cash equivalents. The market value of       of Pass-Through Business Alternative Income Tax re-
the total assets of the investment club cannot exceed,         ported on each Schedule PTE-K-1 must be reported. 
as measured on the last day of its privilege period, an        Failure to complete Schedule T in its entirety may re-
amount equal to the lesser of $417,500 or $58,500 per          sult in no credit.
owner of the entity. The investment club is not required      •  Schedule CBT-160-P, Underpayment of Estimated NJ 
to register itself or its membership interests with the fed-   Partnership Tax, must be included if the entity calcu-
eral Securities and Exchange Commission.                       lated an interest charge on an underpayment of in-
                                                               stallment payments or an exception to the imposition 
Who Must File                                                  of interest.
Every partnership that has income or loss derived from 
sources in the State of New Jersey, or has any type of        The Division may require that the complete federal 
New Jersey resident partner, must file Form NJ-1065.          Form 1065, including all schedules and supporting at-
Form NJ-CBT-1065 must be filed when the entity is re-         tachments, and any other documentation or information 
quired to calculate a tax on its nonresident partner(s).      deemed necessary be submitted during the course of an 
Partners subject to the Gross Income or Corporation           audit.
Business Taxes still must report and pay tax on their 
share of partnership income or loss.                          If at any time during the course of an audit the Division 
                                                              deems it necessary, the partnership must make an 
                                                              NJ-1065E available for all applicable partners.
How to File
Electronic Filing Mandate
Partnerships subject to the provisions of the Corpora-        When to File
tion Business Tax Act (that is partnerships that remit tax    Returns for Calendar Year 2023 are due April 15, 2024. 
based on any nonresident corporate and nonresident            Fiscal year returns are due the 15th day of the fourth 
noncorporate partner’s allocable share of NJ partner-         month after the end of the tax year.
ship income) that utilize the services of a paid preparer 
must file all their returns completed by that practitioner    Any short period return must be filed by the due date of 
by electronic means. Payments of the partnership lia-         the federal Form 1065. The partnership should use the 
bilities along with the submission of payment-related         most current form available from the Division of Taxation.
returns (PART-200-T and CBT-206) must also be made 
                                                              Postmark Date. All New Jersey Income Tax returns 
electronically either by the partnership or by a paid tax 
                                                              postmarked on or before the due date of the return are 
practitioner.
                                                              considered to be filed on time. Returns postmarked af-
In addition, partnerships with 10 or more partners must       ter the due date are deemed to be late. The filing date 
file all returns electronically regardless of whether or      for a late return is the day the return is received by the 
not they utilize the services of a paid tax preparer.         Division, not the postmark date.
To obtain the electronic filing and payment formats 
or to obtain additional information on electronic filing      Where to File
and payment options, visit the New Jersey Division of         Mail your completed NJ-CBT-1065 to:
Revenue and Enterprise Services’ website at www.               NJ Division of Taxation
nj.gov/treasury/revenue/partnerships.shtml or email            Revenue Processing Center 
the Division of Revenue and Enterprise Services at             PO Box 194
e-GovServices@treas.nj.gov.                                    Trenton NJ 08646-0194

NJ-1065 filers that do not use the services of a paid tax     Mail your completed CBT-206 to:
preparer and who have less than 10 partners have the           NJ Division of Taxation
option to file by electronic means or on paper.                Revenue Processing Center 
                                                               Extension of Time to File NJ-CBT-1065
                                                               PO Box 642
                                                               Trenton NJ 08646

                                                             2

- 3 -

Enlarge image

Mail your completed NJ-CBT-V to: Estimated Payments
NJ Division of Taxation Partnerships are required to make installment payments
Revenue Processing Center of estimated tax. Partnerships that are subject to tax
Corporation Business Tax – Nonresident Partner Tax payments must make installment payments of 25% of
PO Box 642 that tax on or before the 15th day of each of the fourth,
Trenton NJ 08646 sixth, and ninth months of the privilege period and on or
before the 15th day of the first month after the close of
Note: Do not attach the NJ-CBT-V to or mail with the privilege period.
your NJ-CBT-1065.
Estimated payments must be filed and paid electroni-
Extension of Time to File cally. To file and pay electronically, visit the Division’s
If a five-month extension is obtained for filing federal website.
Form 1065, then an automatic five-month extension
is granted for submitting your NJ-CBT-1065. A copy Partnerships are not to file the CBT-150, Corporation
of your application for federal extension, federal Form Business Tax Statement of Estimated Tax. The CBT-150
7004, must be filed with your New Jersey return. Check is a Corporation Business Tax form, not a partnership
the box labeled “Application for Federal Extension is at- form.
tached” on the front of your NJ-CBT-1065. If you did not
obtain a federal extension and you need more time to Accounting Method
file your NJ-CBT-1065, federal Form 7004 must be sub- A partnership’s accounting method(s) used for the
mitted as your request to New Jersey on or before the NJ-1065 must be the same as the accounting meth-
original due date of the return. ods(s) used for federal Form 1065.

In addition, any partnership that has a tax due must file a
Accounting Periods
CBT-206, Partnership Application for Extension of Time The 2023 NJ-1065 should be used for Calendar Year
to File NJ-CBT-1065. The applicable payment must ac- 2023 or for a fiscal year that began in 2023. If filing for
company this form. Your CBT-206 must be postmarked a fiscal year or a short tax year, enter at the top of your
on or before the original due date of the return. See spe- NJ-CBT-1065 the month and day the tax year began,
cific instructions found on back of the CBT-206. and the month, day, and year that it ended. The part-
nership’s tax year for New Jersey Income Tax purposes
There is no extension of time to pay the tax due. Penal-
must be the same as its tax year for federal income tax
ties and interest are imposed whenever the tax is paid
purposes.
after the original due date.

A five-month extension of time to file your NJ-CBT-1065 Forms and Assistance
may be granted if at least 90% of the total tax reported To get New Jersey tax forms:
on your NJ-CBT-1065 when filed is paid in the form of • Visit our website at nj.gov/taxation
a tiered partnership payment, estimated payment(s), or
other payment(s) made by the original due date. • Write to:
NJ Division of Taxation
An extension of time to file the NJ-CBT-1065 does Taxpayer Form Services
not extend the time for filing the tax returns of the PO Box 269
partners. Trenton NJ 08695-0269
Assistance from a Division representative is available
Time Limits for Assessing Additional Tax by contacting the Division’s Customer Service Center at
Partnerships that are required to file an NJ-CBT-1065 (609) 292-6400.
are subject to owing a nonresident partner tax. The
nonresident partner tax is subject to the Corporation
Business Tax Act. The Corporation Business Tax Act has Electronic Filing Assistance
For electronic filing assistance:
a four-year statute of limitations (time allowed by law)
for the Division of Taxation to send a bill. The Division • Call the Division of Revenue and Enterprise Services’
generally has four years from the date the entity filed its Call Center at (609) 292-9292
partnership return or the original due date of the return,
• Download the needed formats from the New Jersey
whichever is later, to send the entity a bill for additional
Division of Revenue and Enterprise Services’ website
nonresident partner tax. There is no time limit if the en-
at: www.nj.gov/treasury/revenue
tity did not file a partnership return, or if the entity filed
a false or fraudulent return with the intent to evade tax.
The time limit may be extended in certain circumstances.

- 4 -

Enlarge image

Amended Return or Federal Change                               month or part of a month the return is late may also be 
An amended NJ-CBT-1065 must be filed if an amended             imposed.
federal Form 1065 is filed, or if the Internal Revenue 
Service changes or corrects any item of income, gain,          Late Payment Penalty. 5% of the outstanding tax bal-
or loss previously reported. The amended New Jer-              ance may be imposed.
sey return must be filed within 30 days of the date the 
amended federal Form 1065 is filed or, in the case             Interest. 3% above the prime rate for every month or 
                                                               part of a month the tax is unpaid, compounded annually.  
of a federal audit, within 90 days after the final deter-
                                                               At the end of each calendar year, any tax, penalties, 
mination of the change. When an amendment to the 
                                                               and interest remaining due (unpaid) will become part of 
NJ-CBT-1065 results in a need to amend the Schedules 
                                                               the balance on which interest is charged. See Technical 
NJK-1, an amended Schedule NJK-1 must be forwarded 
                                                               Bulletin TB-21(R) for current and previous years’ interest 
to the Division of Taxation and to each partner.
                                                               rates.
An amended NJ-CBT-1065 and an amended Schedule 
NJK-1 for each partner must also be filed to correct any       Fraudulent Returns
error on or reflect any change to the original NJ-1065,        Any person who deliberately fails to file a return, files 
whether or not an amended federal Form 1065 was filed          a fraudulent return, or attempts to evade the tax in any 
for that 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-CBT-1065, get a blank 
NJ-CBT-1065 for the tax year that is to be amended,            Rounding Off to Whole Dollars
and check the “Amended Return” box on the front of the         Money items on the return and schedules can be shown 
form. Complete the form, entering the corrected informa-       in whole dollars (eliminate amounts under 50 cents; en-
tion, and attach an explanation of the changes. Entities       ter amounts of 50 cents or more as the next higher dollar 
subject to the Electronic Filing Mandate as explained          amount).
on 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-CBT-1065 is not considered to be a return un-
filing their amended partnership return electronically or 
                                                               less signed, either by a general partner, limited liability 
mailing it to:
                                                               company 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 
penalty of 5% per month (or part of a month) up to a           labels are not acceptable. If someone prepares the 
maximum of 25% of the outstanding tax liability will also      return at no charge, the paid preparer’s area does not 
be imposed.                                                    need to be completed. A tax preparer who fails to sign 
                                                               the return or provide a correct tax identification number 
The Division may impose a penalty against the partner-         may incur a $25 penalty for each omission.
ship if the partnership is required to file an NJ-CBT-1065 
and (1) fails to file the return on time, including any 
extension, (2) files a return that fails to show all the       Line-by-Line Instructions
information required, or (3) fails to file an amended part-    Reporting Period
nership return within 90 days of the date a final federal      If you are reporting for a period other than Calendar Year 
determination or disallowance is issued or within 90 days      2023, enter the beginning and ending dates of your fiscal 
of the date the amended federal Form 1065 is filed, un-        year.
less the failure is due to reasonable cause and not due 
to willful neglect.                                            Partnership Name, Address, Identification 
                                                               Enter the exact legal name, trade name, if any, and ad-
Late Filing Penalty. 5% per month (or part of a month)         dress of the partnership. The legal name is the name 
up to a maximum of 25% of the outstanding tax liability        in which the business owns property or acquires debt. 
when a return is filed after the due date or extended          Enter the trade name, registered alternate name, (d/b/a 
due date will be imposed. A penalty of $100 for each           name) if different from the partnership’s legal name.

                                                              4

- 5 -

Enlarge image

Enter the partnership’s federal employer identification Line 8 – Total Tax Paid on Behalf of Partnership
number (FEIN), principal business activity, and date the From Tiered Partnership Payment Schedule
business was started. Enter the total tax paid on behalf of partnership from
Schedule T.
Enter the number of resident partners and the number of
nonresident or foreign partners in the spaces provided. Line 9 – Estimated Payments/Credit From 2022
Each partner’s residency status must be determined as Enter the total amount of estimated payments made.
of the close of the partnership’s tax year. Also, enter your credit forward request from line 13 of
your 2022 NJ-CBT-1065.
Check the appropriate boxes to indicate whether the re-
turn is a(n) Line 10 – Payment From CBT-206
• Initial return; Enter the amount of the payment remitted with your
2023 Partnership Application for Extension of Time to
• Final return; or
File NJ-CBT-1065.
• Amended return.
Lines 11 and 12
Check the appropriate boxes to indicate if If line 6 is more than the total of lines 7 through 10, there
• An application for a federal extension is attached; is a balance due. Complete line 11.

• This is a tiered partnership. If line 6 is less than the total of lines 7 through 10, there
is an overpayment. Complete line 12.
Nonresident Partners Tax (Lines 1–14)
Any entity that was required to calculate a tax on its non- Line 11 – Total Balance Due
resident partner(s) on the NJ-1065 must complete lines Subtract lines 7–10 from line 6 and enter the balance
1 through 14 of Nonresident Partners Tax. due. Make check payable to “State of New Jersey –
CBT” and remit with your completed NJ-CBT-V, Corpora-
Line 1 – Total Income tion Business Tax–Partnership Payment Voucher.
Enter the total income from line 12 of the NJ-1065.
Line 12 – Overpayment
Line 2 – Total Nonresident Noncorporate Partner Subtract line 6 from the total of lines 7–10 and enter the
Share of Tax overpayment.
Enter the amount from line 2c, column J, of Partners Di-
rectory on the NJ-1065. Line 13 – Credit to 2024
Enter the amount of the overpayment shown on line 12
Line 3 – Total Nonresident Corporate Partner Share that you want forwarded to your 2024 NJ-CBT-1065.
of Tax
Enter the amount from line 2c, column K, of Partners Di- Line 14 – Refund
rectory on the NJ-1065. Enter the amount of the overpayment shown on line 12
that you want refunded.
Line 4 – Total Tax
Add lines 2 and 3.

Line 5 – Interest on Underpayment of Estimated Tax
Enter the amount of interest due from line 18 of the
CBT-160-P. Check the box if the entity qualified for an
exception to the imposition of interest or if the partner-
ship calculated an interest charge on the underpayment
of installment payments.

Line 6 – Total Due
Add lines 4 and 5.

Line 7 – Pass-Through Business Alternative Income
Tax Credit
If you check the nonresident partners tax box on Form
NJ-1065, Schedule A, Part II, line 3, enter the partner-
ship’s total share of Pass-Through Business Alternative
Income Tax from Schedule T.

PDF file checksum: 441393006

(Plugin #1/9.12/13.0)