Partnerships, with certain exceptions, are required to pay tax on behalf of nonresident partners. P.L. 2005, c. 288, amended the nonresident partner tax requirements by requiring installment payments for the tax.
Beginning for privilege periods starting on or after January 1, 2007, the payment of tax on behalf of nonresident partners shall be made in the amount of 25% of the tax, on or before the 15th day of the fourth, sixth, and ninth month of the privilege period, and the 15th day of the first month following the close of the privilege period. For calendar year partnerships, the installment payments for the nonresident partner tax shall be made on or before April 15th, June 15th, September 15th and then January 15th of the next year.
- The partnership must file a PART-100 by the 15th day of the fourth month after the close of the privilege period, to report the total nonresident partner tax due and to claim credit for the installment payments made. The partners’ accounts will not be credited with any tax payment made by the partnership, until the partnership files its NJ-1065 and PART-100. The Division will use the partnership’s NJ-1065 to credit the nonresident partners for the amount of tax reported for each nonresident partner in Columns J and K of the Partners Directory.
SAFE HARBOR PROVISION
Under P.L. 2005, c. 288, if the partnership filed a PART-100 Partnership Return Voucher for the prior tax year showing nonresident partner tax due, there is a safe harbor provision. Under this safe harbor, the partnership may satisfy the installment tax requirements by basing the installment payments on 100% of the amount of the prior year’s nonresident partner tax; 25% of that amount must be paid for each installment. Otherwise, each installment payment must be based on 25% of the total nonresident partner tax due for the current tax year, determined on the basis of circumstances existing at the time required for making the installment.
INFORMATION ON PAYMENT
For all partnerships, installment payment of the tax must be done electronically. To do so, on the Online Partnership Service
page, enter the partnership’s name and tax identification number.
You can access the Online Partnership Service
page by going to the Division of Taxation’s home page and, on the left side, click on “Electronic Services”. Then Click on “Partnerships” and then click on “Estimated Tax Payments by E-Check or Credit Card.” Then, on the Online Partnership Service
page, follow the specific instructions
for making an installment payment. If you need additional assistance with the electronic payment, please call Customer Services at 609-292-6400.