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Division of Taxation


Section 1 of P.L. 2018, c.48 (N.J.S.A. 54:10A-5.41), as amended by P.L. 2018, c. 131 and P.L. 2020, c. 95, imposes a 2.5% temporary surtax on taxpayers with a New Jersey allocated taxable net income over $1 million dollars for tax periods beginning on or after January 1, 2018 through December 31, 2023.

The surtax applies to all taxpayers with a corporation business tax liability, but does not apply to public utilities or New Jersey S Corporations.  The surtax is imposed on allocated taxable net income and is in addition to the annual corporation franchise tax.

However, if the federal corporate tax rate is increased to a rate of at least 35% of taxable income (the pre-Tax Cuts and Jobs Act rate), the surtax will be suspended following the conclusion of the tax period corresponding with the increase to the federal corporate income tax rate.

For tax year 2020, penalties or interest will not be imposed on an underpayment that results from the change in the surtax rate.

Note: The New Jersey corporation business tax rates have not changed. The rates remain the same as those that were in effect for 2017.

Last Updated: Friday, 10/16/20