The NJ-1080C form serves as the Income Tax - Nonresident Composite Return for the State of New Jersey, specifically designed for the tax year running from January 1 through December 31, 2004. It is a mandatory filing for nonresident individuals who derive revenue through various entities like partnerships, S corporations, limited liability companies, and others within New Jersey. Designed to simplify the tax reporting process, this form allows eligible nonresidents to collectively report and pay taxes on income earned in the state, under certain conditions and tax rates.
In the landscape of tax forms and regulations, the NJ-1080C form stands out for its specialized purpose and audience. Tailored for the State of New Jersey, this form is designed to facilitate the income tax reporting for nonresident entities and individuals involved in various partnerships, professional athletic teams, limited liability companies, and similar arrangements for the tax year of 2004. Its structured format and detailed instructions aim to streamline the tax filing process, accommodating both lesser and greater income brackets with distinct tax rates of 6.37% and 8.97% respectively. The form includes specifics such as participant directories, income information, and the opportunity for taxpayers to contribute to the gubernatorial elections fund without affecting their tax or refund amounts. Furthermore, the intricacies of who qualifies to file, how to elect to participate, and the obligations accompanying such an election are meticulously outlined, ensuring that nonresidents can navigate their tax responsibilities effectively. Beyond the raw numbers and calculations, the form embodies the state’s approach to managing nonresident income tax, providing a clear pathway for compliance while highlighting the importance of accurate and timely submissions. With provisions for filing extensions and specific instructions surrounding the submission process, including the requirement for diskette submissions for returns involving 25 or more participants, the NJ-1080C form serves as a critical tool for eligible individuals and entities seeking to fulfill their New Jersey income tax obligations.
NJ-1080C
2004
STATE OF NEW JERSEY
INCOME TAX - NONRESIDENT COMPOSITE RETURN
For Tax Year January 1 - December 31, 2004
ID Number
Legal Name
Trade Name (if different from legal name)
_______ Number of individuals
Address (number and street)
participating in this
return
City
State
Zip Code
Check if: 1.
Professional Athletic Team
2.
Partnership
3.
New Jersey Electing S Corporation
4.
Limited Liability Company
5.
Limited Liability Partnership
6.
Estate or Trust
7. GUBERNATORIAL
Do you wish to designate $1 of your taxes for this fund?
YES
NO
ELECTIONS FUND
Note: If you check the “YES” box it will not increase the tax or reduce the refund.
INCOME INFORMATION
Column A
Column B
8.
Wages, salaries, tips, and other employee compensation
8
9.
Taxable interest
9
10.
Dividends
10
11.
Net gain or income from disposition of property
11
12.
Distributive share of Partnership income
12
13.
Net Pro Rata Share of S Corporation
13
14.
Net gains or income from rents, royalties, patents & copyrights
14
15.
Net gains or income derived through Estates or trusts
15
16.
Other - state nature and source ___________________________
16
17.
Total New Jersey Taxable Income (Add Lines 8 through 16)
17
18.
Tax (Multiply Line 17, Col. A by 6.37%, Line 17, Col. B by 8.97%)
18
19.
Total Tax (Add Line 18, Col. A and Line 18, Col. B)
. . .
. . . . . . . . . . . . . . . . . . . .
.
. .
19
20.
Total New Jersey Tax Withheld
20
Check
if Form NJ-2210
is attached
21.
Estimated Payments / Credit from 2003 Composite return
21
22.
Tax Paid on Partners Behalf by Partnership
22
23.
Total Payments / Credits (Add Line 20 through 22)
23
24.
If payments are LESS THAN tax - enter Amount Due
24
25.
If payments are MORE THAN tax - enter OVERPAYMENT
25
26.
REFUND (Amount of Line 25 to be refunded)
26
27.
CREDIT to 2005 Tax
27
Signature (See instructions)
Under penalties of perjury, I declare that I have examined
this return, including accompanying schedules and
statements, and to the best of my knowledge and belief, it is true, correct and complete. Declaration of preparer is based
on all information of which preparer has any knowledge.
Paid Preparer’s Signature
Date
Check if Self-Employed
Title
Firm’s Name (or yours if self-employed)
Preparer’s SS #
Preparer’s Address
Preparer’s Federal EIN #
Division
Use
1____________ 2_____________ 3________________________________ 4_____________ 5_____________ 6____________ 7_______________________________
SCHEDULE A - PARTICIPANT DIRECTORY - Total Income Less Than $250,000
See instructions on page 7 for the diskette requirements.
Legal name as shown on Form NJ-1080-C
List all participants, including principal address. Add additional sheets as necessary.
Social Security Number or EIN
Name
Address
Taxable Income
NJ Income Tax
Total Taxable Income This Page
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
___________ Additional Pages Attached
. . . . . . . . . . . . . . . . . . . . . . . . . . .Total Taxable Income All Pages (Carry to Line 17, Column A)
Total NJ Income Tax This Page
. . . . . . . . . . . . . . . . . . . . . . . . . . . .Total NJ Income Tax All Pages (Carry to Line 18, Column A)
SCHEDULE B - PARTICIPANT DIRECTORY - Total Income Greater Than or Equal to $250,000
. . . . . . . . . . . . . . . . . . . . . . . . . . .Total Taxable Income All Pages (Carry to Line 17, Column B)
. . . . . . . . . . . . . . . . . . . . . . . . . . . .Total NJ Income Tax All Pages (Carry to Line 18, Column B)
SCHEDULE C - NONPARTICIPANT DIRECTORY
List all nonparticipants, including principal address. Add additional sheets as necessary.
2004 COMPOSITE RETURN INSTRUCTIONS
Qualified nonresident individuals who are members of general and limited partnerships, professional athletic teams, limited liability partnerships, limited liability companies, New Jersey electing S corporations, estates and trusts may participate in a composite return. Any composite return which is filed on behalf of 25 or more participants must be filed on diskette. General diskette specifications can be found beginning on page 5.
For tax year 2004, the NJ-1080C return has been modified so that two tax rates are used - 6.37% and 8.97%.
Individual participants with income of less than $250,000, from the entity preparing and filing the composite NJ-1080C return, are listed on Schedule A - Participant Directory - Total Income Less than $250,000. The addition of the Taxable Income amounts for all the participants on Schedule A is carried over to the appropriate line(s) 8 through 16, Column A. The tax rate to be used on Schedule A and on line 18 of Column A on the front of the return is 6.37%.
Individual participants with income greater than or equal to $250,000, from the entity preparing and filing the composite NJ-1080C return, are listed on Schedule B - Participant Directory - Total Income Greater than or Equal to $250,000. The addition of the Taxable Income amounts for all the participants on Schedule B is carried over to the appropriate line(s) 8 through 16, Column B. The tax rate to be used on Schedule B and on line 18 of Column B on the front of the return is 8.97%.
Only individuals are eligible to file as part of a composite return. To qualify for participation in a composite return the nonresident must be a member of one of the specified entities and satisfy all of the following conditions:
1.The individual was a nonresident for the entire taxable year;
2.The individual did not maintain a permanent place of abode in New Jersey at any time during the taxable year;
3.The individual was not a fiscal year filer;
4.The individual did not have income derived from or connected with New Jersey sources other than the income reported on composite return(s);
5.The individual waives the right to claim any New Jersey personal exemption, credit or deduction and agrees to have the tax calculated directly on the individual’s income reported on the composite return at the highest tax rate in effect for single taxpayers for the tax year; and
6.The individual elects to be included in a composite return by completing and delivering to the filing entity a Form NJ-1080- E (Election to be Included in a Composite Return) prior to the filing of the composite return by the entity.
An individual may participate in other New Jersey gross income tax composite returns, providing that the requirements of subsections 1 through 6 above, are satisfied. Once a nonresident elects to participate in a composite return the election is binding on the individual’s heirs, representatives, assigns, successors, executors and administrators and constitutes an express consent to personal jurisdiction in New Jersey for New Jersey personal income tax purposes.
ELECTION TO PARTICIPATE
Every participating member must make the election to be part of the composite return in writing each year by filing Form NJ-1080- E with the filing entity. The elections must be maintained in the filing entity’s files. When filed, the composite return must include lists of the members who are participating, as well as lists of those who have not elected, or are not qualified, to participate in the composite return. The lists must include each member’s name, address and Federal Identification Number.
PERMISSION TO FILE NOT REQUIRED
In previous years, the Division accepted composite returns only when written permission had been requested by the filing entity and a copy of the permission letter was attached to the composite return when filed. Written permission to file a composite return is not required. Any entity which is eligible to file a composite return may now do so without first putting the Division on notice.
WHEN TO FILE
Returns for calendar year 2004 are due April 15, 2005. No fiscal composite returns will be accepted.
POSTMARK DATE
All New Jersey income tax returns postmarked on or before the due date of the return are considered to be filed on time. Tax returns postmarked after the due date are considered to be filed late. When a return is postmarked after the due date, the filing date for that return is the date the return was received by the Division, not the postmark date of the return.
EXTENSION OF TIME TO FILE
An extension of time to file will be granted on a composite basis only. The request for an extension of time to file must be made on Form NJ-630, on or before the original due date of the return. The request must be made under the filing entity’s Federal Identification Number. A four month extension of time to file the NJ-1080-C will be granted if at least 80% of the actual tax liability is paid in the form of estimated or other payments by the original due date of the return.
If the filing entity has requested and been granted a four month extension, it may apply for an additional two month extension before the four month extension expires. The request for the additional two month extension must be made on Form NJ-630.
Taxpayers who file Form NJ-630 will not receive an approved copy. The Division will only send notification if the request for extension is denied.
If the requirements for extension are not satisfied, or if the return is not filed by the extended due date, the extension will be denied and penalties and interest will be imposed from the original due date of the return. See “Penalty and Interest Charges” on page 2.
WHERE TO FILE
Mail Form NJ-1080-C to:
State of New Jersey
Division of Taxation
Revenue Processing Center
PO Box 188
Trenton, New Jersey 08646-0188
ESTIMATED TAX
If the filing entity has filed a composite return in the previous years and the amount estimated to be the total income tax liability for the composite return for the current tax year exceeds $400, the filing entity must file a declaration of estimated tax and make quarterly estimated tax payments using Form NJ-1040-ES. Instructions for computing the estimated tax and making the payments are included with that form. Failure to file a Declaration of Estimated Tax or pay all or part of an underpayment will result in interest charges on the underpayment.
UNDERPAYMENT OF ESTIMATED TAX
If the filing entity failed to make the required estimated tax payments as described above, the entity must complete Form NJ- 2210, Underpayment of Estimated Tax by Individuals. Completing Form NJ-2210 will determine if interest on the underpayment is due and if so, will calculate the amount. If you complete and enclose Form NJ-2210 with your return, check the box below Line 18.
NOTE: Credit will not be given on the composite return for estimated tax payments made by any of the qualified electing nonresident participants.
ACCOUNTING METHOD
The accounting method used for Form NJ-1080-C must be the same as the accounting method used by the participants for Federal income tax purposes.
ACCOUNTING PERIODS
The accounting period for a nonresident composite return is the calendar year.
FORMS AND ASSISTANCE
Forms are available by calling 1-800-323-4400 or by writing to the New Jersey Division of Taxation, 50 Barrack Street, PO Box 269, Trenton, NJ 08695-0269, Attention: Forms Distribution Center. You can have forms faxed to you at any time by faxing the requested form number to TaxFax at 1-609-588-4500, or call that number for facsimile instructions. You may also request forms by accessing the Division’s home page on the Internet at:
http://www.state.nj.us/treasury/taxation/
Assistance is available by calling the Division’s Customer Service Center at 609-292-6400.
Any composite return which is filed on behalf of 25 or more participants must be filed on diskette. A filing entity with less than 25 participants may also file on diskette, but is not required to do so. See page 6 for general diskette specifications.
ROUNDING OFF WHOLE DOLLARS
The money items on the return and schedules may be shown in whole dollars. This means that any amount under 50 cents may be eliminated and amounts of 50 cents or more should be increased to the next higher dollar.
AMENDED RETURNS
An amended Form NJ-1080-C must be filed if an amended Federal return is filed for any filing entity, or if the Internal Revenue Service changes or corrects any item of income, gain or loss previously reported. The amended New Jersey return shall be filed within 90 days of the date the amended Federal form is filed or, in the case of a federal Audit, within 90 days after the final determination of the change. To amend the original composite return, use a blank Form NJ-1080-C for the tax year that is to be amended and write “Amended” across the top. Complete the form by entering the correct information and attach an explanation of the changes.
An amended composite return should also be filed if the filing entity issues amended or corrected information returns (e.g. Form W-2, Federal Schedule K-1, etc.) which affect Total New Jersey Taxable Income (Line 17).
PENALTIES AND INTEREST CHARGES
Penalty and interest should be included with the payment of any tax due.
The Division may impose the following:
Late filing penalty: 5% per month (or fraction of a month) up to a maximum of 25% of the outstanding tax liability when a return is filed after the due date or extended due date. Also, a penalty of $100 per month for each month the return is late may be imposed.
Late payment penalty: 5% of the outstanding tax balance may be imposed.
Interest: 3% above the prime rate for every month or fraction of a month the tax is unpaid, compounded annually. At the end of each calendar year, any tax, penalties and interest remaining due (unpaid) will become part of the balance on which interest is charged.
SIGNATURES
Form NJ-1080-C is not considered to be a return unless it is signed and dated. If the filing entity is a general partnership, a limited partnership, or a limited liability partnership, the return must be signed by a general partner or the partner designated for tax matters. If the filing entity is an electing New Jersey S Corporation the return must be signed by an officer of the corporation; if a limited liability company, by an authorized member; if an estate, by the executor or administrator; if a trust, by a trustee. If a receiver, trustee in bankruptcy, or assignee controls the organization’s property or business, that person must sign the return. If the filing entity is a professional athletic team the return must be signed as required above depending on the type of entity.
Anyone who prepares a composite return for a fee must sign the return as a “Paid Preparer” and must enter his or her social security number. The company or corporation name and Federal Employer Identification Number, must be included, if applicable. The preparer required to sign the composite return must sign it by hand; signature stamps or labels are not acceptable. If someone prepares the return at no charge, the paid preparer’s area need not be completed. A tax preparer who fails to sign the return or provide a correct tax identification number may incur a $25 penalty for each omission.
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GENERAL INSTRUCTIONS FOR FORM NJ-1080-C
PRIVACY ACT NOTIFICATION
The Federal Privacy Act of 1974 requires an agency requesting information from individuals to inform them why the request is being made and how the information is being used.
Social security numbers are used primarily to account for and give credit for tax payments. The Division of Taxation also uses social security numbers in the administration and enforcement of all tax laws for which it is responsible.
FEDERAL/STATE TAX AGREEMENT
The New Jersey Division of Taxation and the Internal Revenue Service have entered into a Federal/State Agreement to exchange income tax information in order to verify the accuracy and consistency of information reported on Federal and New Jersey income tax returns.
FRAUDULENT RETURN
Any person who willfully fails to file a return, files a fraudulent return, or attempts to evade the tax in any manner may be liable for a penalty not to exceed $7,500 or imprisonment for a term between three years and five years, or both.
GENERAL INFORMATION
Enter the exact legal name, trade name, if any, and address of the entity filing the return on behalf of its participating members. The legal name is the name in which the business owns property or acquires debt. Enter the trade name or d/b/a (doing-business-as) name if different from the entity’s legal name.
Enter the entity’s Federal Employer Identification Number (EIN).
Enter the number of nonresident individuals participating in the composite return in the space provided.
Check the appropriate box to indicate the type of entity which is filing the return.
GUBERNATORIAL ELECTIONS FUND
The Gubernatorial Elections Fund, financed by taxpayer
designated $1 contributions, provides partial public financing to qualified candidates for the office of Governor of New Jersey. With its contribution and expenditure limits, the Gubernatorial Public Financing Program has since 1977 assisted 44 candidates to conduct their campaigns free from the improper influence of excessive campaign contributions. Operation of the program has also permitted candidates of limited financial means to run for election to the State’s highest office. As a condition of their receipt of public financing, candidates must agree to participate in two debates which provide the public with an opportunity to hear the views of each candidate. For more information on the Gubernatorial Public Financing Program, contact the New Jersey Election Law Enforcement Commission at (609) 292-8700 or write to the Commission at PO Box 185, Trenton, New Jersey 08625-0185.
Participation in the $1 income tax check-off protects the continuity and integrity of the Gubernatorial Elections Fund by providing that funds will be reserved for future gubernatorial elections thereby deterring the use of needed funding for other purposes. If you want to designate $1 to go to help candidates for governor pay expenses, check the “Yes” box in the Gubernatorial Elections Fund section of the return. Checking the “Yes” box will not in any way increase your tax liability or reduce your refund.
ATTACHMENTS
For each qualified electing nonresident participant a copy of the following must be enclosed with Form NJ-1080-C:
•Schedule NJK-1, Form NJ-1065, if the filing entity is a partnership, limited liability partnership or limited liability company;
•Form W-2, if the filing entity is a professional athletic team;
•Schedule NJ-K-1, Form CBT-100S, if the filing entity is a New Jersey electing S Corporation;
•Schedule D, Form NJ-1041, if the filing entity is an estate or trust.
COMPLETING FORM NJ-1080-C
INSTRUCTIONS FOR PARTNERSHIPS, LIMITED LIABILITY COMPANIES AND LIMITED LIABILITY PARTNERSHIPS
New for 2004
Individual participants with income greater than or equal to $250,000, from the entity preparing and filing the composite NJ- 1080C return, are listed on Schedule B - Participant Directory - Total Income Greater than or Equal to $250,000. The addition of the Taxable Income amounts for all the participants on Schedule B is carried over to the appropriate line(s) 8 through 16, Column B. The tax rate to be used on Schedule B and on line 18 of Column B on the
front of the return is 8.97%.
The income entered on Line 12 - Distributive Share of Partnership Income will be the combined income reported in Column B of Schedule NJK-1, Form NJ-1065 for each qualified electing nonresident partner.
Lines 8 through 11 - Enter “0” (zero) on each of these lines.
Line 12 - Distributive Share of Partnership Income - Enter on this line the composite amount of income from the partnership that was reported on Line 4, Column B, Schedule NJK-1, Form NJ-1065, for all participating partners. See “New for 2004” above. If the composite amount is a loss, enter “0” (zero).
Lines 13 through 16 - Enter “0” (zero) on each of these lines.
Line 17 - Total New Jersey Taxable Income - Enter on Line 17 the total of lines 8 through 16.
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Line 18 - Tax - Compute the tax by multiplying the amount on Line 17, by 6.37% in Column A or 8.97% in Column B.
Line 19 - Total Tax - Enter on Line 19 the total of Line 18, Column A and Line 18, Column B.
Line 20 - Total New Jersey Tax Withheld - Enter “0” (zero) on Line 20.
Line 21 - Estimated Payments / Credit from 2003 Composite Return - Enter on Line 21 the total of:
•Estimated tax payments made by the partnership for 2004;
•Credit, if any, applied from the partnership’s 2003 composite return;
•Amount, if any, paid to qualify for an extension of time to file.
Credit will not be given on the composite return for estimated tax payments made on an individual basis by any of the participating partners during the tax year.
Line 22 - Tax Paid on Partners Behalf by Partnership - Enter on Line 22 the total amount of New Jersey income tax paid on
participating partners’ behalf by the partnership, as shown on Line 1, Column B, Part III of Schedule NJK-1s. Attach a copy of Schedule NJK-1 for each participating partner for which a credit is being claimed.
Line 23 - Total Payments/Credits - Enter on Line 23 the total of Lines 20, 21 and 22.
Line 24 - Amount Due - If Line 19 is more than Line 23, there is a balance due. If you are enclosing Form NJ-2210, the amount of the check should also include interest, if any, calculated for the underpayment of estimated tax. Make your check for the total amount payable to “State of New Jersey - TGI”.
Line 25 - Overpayment - If Line 19 is less than Line 23, there is an overpayment.
Line 26 - Refund - Enter on Line 26 the amount from Line 25 (Overpayment) that you want refunded to the partnership.
Line 27 - Credit to 2005 Tax - Subtract Line 26 (Refund) from Line 25 (Overpayment). Enter the result on Line 27. This is the amount that will be credited to the 2005 composite tax liability.
INSTRUCTIONS FOR NEW JERSEY ELECTING S CORPORATIONS
Individual participants with income greater than or equal to $250,000, from the entity preparing and filing the composite NJ- 1080C return, are listed on Schedule B - Participant Directory - Total Income Greater than or Equal to $250,000. The addition of the Taxable Income amounts for all the participants on Schedule B is carried over to the appropriate line(s) 8 through 16, Column B. The tax rate to be used on Schedule B and on line 18 of Column B on the front of the return is 8.97%.
Lines 8 through 12 - Enter “0” (zero) on each of these lines.
Line 13 - Net Pro Rata Share of S Corporation Income - Enter on this line the combined amount of S Corporation Income that was reported on Line 1, Part II, Schedule NJ-K-1, Form CBT-100S for all participating shareholders. See “New for 2004” above. If the combined amount of S Corporation Income is a loss, enter “0” (zero).
Lines 14 through 16 - Enter “0” (zero) on each of these lines.
Line 17 - Total New Jersey Taxable Income - Enter on Line 17 the total of Lines 8 through 16.
Line 18 - Tax - Compute the tax by multiplying the amount on Line 17 by 6.37% in Column A or 8.97% in Column B.
•Estimated tax payments made by the New Jersey electing S Corporation for 2004.
•In addition, the total on line 21 must include any payments made by an S Corporation on behalf of any nonresident nonconsenting shareholders who have elected to participate in the composite return. If a nonresident nonconsenting shareholder elects to participate in a composite return the shareholder’s social security number reported on Form NJ- 1040-SC (Payment on Behalf of Nonconsenting Shareholders) must be the same as the number shown on Form NJ-1080-C as the entity’s Federal Identification Number. If the shareholder’s social security number and the entity’s identification number are not the same, credit will not be given on Form NJ-1080-C.
Credit will not be given on the composite return for estimated tax payments made on an individual basis by any of the participating shareholders during the tax year.
Line 22 - Tax Paid on Partners Behalf by Partnership - Enter “0” (zero) on Line 22.
Line 23 - Total payments / Credits - Enter on Line 23 the total of Lines 20, 21, and 22.
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Line 24 - Amount Due - If Line 19 is more than Line 23, there is a balance due. If you are enclosing Form NJ-2210, the amount of the check should also include interest, if any, calculated for the underpayment of estimated tax. Make your check for the total amount payable to “State of New Jersey - TGI.”
Line 25 - Overpayment - If Line 19 is less than Line 23, there is an
overpayment.
Line 26 - Refund - Enter on Line 26 the amount from Line 25 (Overpayment) that you want refunded to the S Corporation.
INSTRUCTIONS FOR ESTATES AND TRUSTS
Lines 8 through 14 - Enter “0” (zero) on each of these lines.
Line 15 - Net Gains or Income Derived Through Estates or Trusts Enter on this line the combined amount of estate or trust income that was distributed to all participating beneficiaries, but only to the extent that those items were attributable to New Jersey sources and included in the amounts reported on Schedule G, Form NJ-1041. See “New in 2004” above. If no estate or trust income was distributed, enter “0” (zero).
•Estimated tax payments made by the estate or trust for 2004
Credit will not be given on the composite return for estimated tax payments made on an individual basis by any of the participating beneficiaries during the tax year.
Line 23 - Total Payments / Credits - Enter on Line 23 the total of Lines 20, 21 and 22.
Line 16 - Other Income - Enter “0” on this line.
Line 26 - Refund - Enter on Line 26 the amount from Line 25 (Overpayment) that you want refunded to the estate or trust.
INSTRUCTIONS FOR PROFESSIONALATHLETIC TEAMS
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Line 8 - Wages, salaries, tips and other employee compensation - Enter on this line the combined amount of wages that was paid by the team to the participating athletes as a result of duty days spent in New Jersey during the tax year. See “New for 2004” above.
Lines 9 through 16 - Enter “0” (zero) on each of these lines.
Line 20 - Total New Jersey Tax Withheld - Enter on Line 20 the total New Jersey income tax withheld.
Line 21 - Estimated Payments/Credit from 2003 Composite Return - Enter on Line 21 the total of:
•Estimated tax payments, if any, made by the team for 2004.
• Credit, if any, applied from the team’s 2003 Composite return.
Credit will not be given on the composite return for estimated tax payments made on an individual basis by any of the participating nonresident athletes during the tax year.
Line 23 - Total Payments/ Credits - Enter on Line 23 the total of Lines 20, 21, and 22.
Line 26 - Refund - Enter on Line 26 the amount from Line 25 (Overpayment) that you want refunded to the team.
Line 27 - Credit to 2005 Taxes - Subtract Line 26 (Refund) from Line 25 (Overpayment). Enter the result on Line 27. This is the amount that will be credited to the 2005 composite tax liability.
INSTRUCTIONS FOR SCHEDULES A, B and C
SCHEDULE A
PARTICIPANT DIRECTORY-Total Income Less Than $250,000 List all participants with income of less than $250,000 each. Be sure to include their name, principal address and social security number. Indicate each participant’s share of New Jersey taxable income and the amount of New Jersey gross income tax liability calculated at the rate of 6.37%. Attach additional sheets if necessary. Total Taxable Income This Page. Enter the total of the taxable
income amounts for all participants on this page.
___ Additional Pages Attached. Enter the number of attached pages.
Total Taxable Income All Pages (Carry to Line 17, Column A). Enter the total of the taxable income amounts for all participants listed on every Schedule A page.
Total NJ Income Tax All Pages (Carry to Line 18, Column A). Enter the total of the tax computed for all participants listed on every Schedule A page.
Any composite return which is filed on behalf of 25 or more participants (on Schedule A and Schedule B combined) must be filed on diskette. See page 7 for general diskette specifications.
SCHEDULE B
PARTICIPANT DIRECTORY-Total Income Greater Than or Equal to $250,000
List all participants with income of $250,000 or more each. Be sure to include their name, principal address and social security
number. Indicate each participant’s share of New Jersey taxable income and the amount of New Jersey gross income tax liability calculated at the rate of 8.97%. Attach additional sheets if necessary.
Total Taxable Income This Page. Enter the total of the taxable income amounts for all participants on this page.
_____ Additional Pages Attached. Enter the number of attached
pages.
Total Taxable Income All Pages (Carry to Line 17, Column B). Enter the total of the taxable income amounts for all participants listed on every Schedule B page.
Total NJ Income Tax All Pages (Carry to Line 18, Column B). Enter the total of the tax computed for all participants listed on every Schedule B page.
SCHEDULE C
NONPARTICIPANT DIRECTORY
List all members of the filing entity, including partnerships and corporations, which have not elected to or are not qualified to participate in the composite return. Be sure to include each members name, principal address and social security number or EIN. Attach additional sheets if necessary.
If Schedules Aand B are required to be submitted on diskette because there are 25 or more participants, Schedule C must also be submitted on diskette.
INSTRUCTIONS FOR COMPLETING FORM NJ-1080-E
Every qualified nonresident who wishes to participate in a composite return must read and complete Form NJ-1080-E (or a form substantially similar thereto), and return it to the filing entity. Form NJ-1080-E must be completed and returned to the filing entity no later than April 15 following the close of the tax year. The election to participate cannot be revoked after April 15.
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For those involved with nonresident entities in New Jersey, such as partnerships or S corporations, filling out the NJ-1080C form is an annual requirement. This form enables eligible nonresident members to file a composite return. The steps below outline the process for correctly completing the NJ-1080C form for the tax year 2004.
Once the NJ-1080C form is fully completed and reviewed for accuracy, it should be submitted by the required deadline to ensure compliance with New Jersey tax laws. Remember, timely and accurate filing helps avoid potential interest and penalties.
The NJ-1080C form is a state income tax return designated specifically for nonresident individuals of New Jersey who are part of composite returns. This includes members of general and limited partnerships, professional athletic teams, limited liability partnerships, limited liability companies, New Jersey electing S corporations, estates, and trusts. To be eligible, an individual must meet several criteria, including being a nonresident for the entire tax year, not maintaining a permanent place of abode in New Jersey, not being a fiscal year filer, having no New Jersey source income outside of what's reported on the composite return, waiving the right to claim personal exemptions or credits, and electing to participate via Form NJ-1080-E prior to filing.
The tax calculation on the NJ-1080C form depends on the total New Jersey taxable income of the participants, which is delineated into two columns: Column A for individuals with income less than $250,000 and Column B for those with income greater than or equal to $250,000. The income from participants is taxed at two different rates, 6.37% for Column A and 8.97% for Column B. The specific rate applied is a determination based on each participant's total income from the filing entity. The form takes into account various income types, such as wages, interest, dividends, and gains from dispositions of property, among others.
The NJ-1080C form must be filed by nonresident individuals participating in a composite return and meeting the eligibility requirements. It is important to note that the form is only for calendar year filers, with the due date being April 15th of the following year. For the tax year 2004, for instance, the due date would be April 15, 2005. Extensions can be requested using Form NJ-630 but require at least 80% payment of the actual tax liability by the original due date. Initially, a four-month extension can be granted, with the possibility of a further two-month extension upon request before the first extension expires.
Yes, an individual may participate in multiple New Jersey gross income tax composite returns within the same tax year, provided they meet all the specified conditions for each composite return. These conditions include being a nonresident for the entire year, not maintaining a residence in New Jersey, waiving rights to individual deductions or credits, and formally electing to participate in each composite return via Form NJ-1080-E provided by the entity responsible for filing the return. It should be emphasized that once an election to participate is made, it is binding and implies the individual's consent to personal jurisdiction in New Jersey for tax purposes.
Not including all required schedules: Many filers forget to attach Schedule A or B, which are crucial for reporting the income of participants depending on the amount they have earned. Failing to include these attachments may result in incomplete filing status, leading to possible delays or reassessment.
Incorrect tax calculations: It's common to see errors in the tax calculation section. Since the NJ-1080C form uses two different tax rates - 6.37% for Column A and 8.97% for Column B, based on the participant's income levels, mistakes can occur if the wrong rate is applied or if arithmetic errors happen during calculations.
Not obtaining necessary elections from participants: Each member who is part of the composite return must elect to participate by filing Form NJ-1080-E. This election must be collected and retained by the filing entity. Sometimes, filers overlook the importance of this documentation, leading to the disqualification of the participants or the entire return.
Failing to file on diskette when required: For entities filing on behalf of 25 or more participants, the NJ-1080C requires submission on a diskette. This technical requirement is often missed, either due to oversight or misunderstanding of the instruction, leading to non-compliance issues.
When filling out the NJ-1080C form, it is essential to double-check all information, ensure all documentation is correct and present, and adhere strictly to filing requirements to avoid these common mistakes.
When preparing and filing the NJ-1080C form, which is the NJ Income Tax - Nonresident Composite Return, several additional forms and documents may be commonly utilized to ensure complete and accurate submission to the State of New Jersey. Understanding the purpose and details of these forms can help in navigating through the process smoothly.
The strategic use of these forms and documents alongside the NJ-1080C can simplify the filing process, ensuring that nonresident individuals and entities comply with New Jersey's tax reporting requirements efficiently. Engaging with these materials effectively requires a nuanced understanding of each form’s unique function within the broader tax preparation framework. This comprehension is vital for ensuring that the preparation, submission, and any subsequent actions regarding the nonresident composite return align with state guidelines and tax laws.
The NJ-1080C form is similar to the 1041 U.S. Income Tax Return for Estates and Trusts in that both forms focus on reporting income and distributing shares of income to beneficiaries or participants. The 1041 form serves estates and trusts by calculating their taxable income, similar to how the NJ-1080C calculates income for nonresident members of various entities in New Jersey. Both forms facilitate the process of reporting distributed income from the entity to the individual level, ensuring proper taxation based on that allocation.
Another document akin to the NJ-1080C is the 1065 U.S. Return of Partnership Income. Both forms are used to report income, deductions, and gains of a collective entity. The 1065 form is specifically for partnerships, similar to the NJ-1080C's use for partnerships among other entities. They share the common goal of consolidating the financial activities of the entity's participants to compute the tax responsibilities to be reported to tax authorities.
The 1120S U.S. Income Tax Return for an S Corporation also shares similarities with the NJ-1080C form. Both are designed for specific types of business entities, with the 1120S catering to S corporations. These forms calculate the total income and taxes due for the entity, and they report the income shared among its members or shareholders. The NJ-1080C and the 1120S emphasize the flow-through nature of the income to participants or shareholders to be taxed at their individual rates.
The NJ-1040NR Nonresident Income Tax Return form is akin to the NJ-1080C as both cater to nonresidents with New Jersey-sourced income. Whereas the NJ-1080C is designed for nonresident participants of composite entities, the NJ-1040NR is intended for individual nonresidents. Both ensure nonresidents pay the correct amount of New Jersey state income tax, despite not residing in the state, covering different types of income sources including wages, and income from partnerships or S corporations.
Similar to the NJ-1080C, the Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc., serves the purpose of reporting an individual's share of an entity's income, deductions, and credits to the IRS. While Schedule K-1 pertains to partnerships, providing each partner's specific share of the business's financial activities, the NJ-1080C covers a broader range of entities for nonresident collective returns in New Jersey. Both ensure transparent reporting of how income and tax responsibilities are split among members or partners.
The Form NJ-CBT-100S S Corporation Business Tax Return shares similarities with the NJ-1080C form by focusing on S corporations' tax obligations within New Jersey. While the NJ-CBT-100S is specifically used by S corporations to report their income, taxes, and members' profit shares within the state, the NJ-1080C encompasses a wider range of entities. Both forms play a crucial role in the state's taxation process by delineating the income attributable to New Jersey and ensuring the right amount of tax is calculated and reported for those earnings.
The federal 8804 Form, Partnership Withholding Tax Return (Section 1446), is also analogous to the NJ-1080C. This form deals with withholding tax on the income of foreign partners derived from the U.S. operations of the partnership. Similar to the NJ-1080C's aim to collect tax from nonresident members on their New Jersey-sourced income, the 8804 ensures that non-U.S. partners fulfill their tax obligations on income effectively connected with a U.S. trade or business. Both forms address the necessity of managing taxation for entities with non-resident members to ensure compliance with local tax laws.
Filling out the NJ-1080C form requires careful attention to detail and a clear understanding of the instructions provided by the State of New Jersey. To assist you in accurately completing this form while avoiding common pitfalls, here’s a list of dos and don'ts:
By following these guidelines, you can navigate the complexities of the NJ-1080C form more smoothly and ensure a compliant and accurate filing. Should you have any doubts or require further assistance, consulting a tax professional is always a prudent step.
There are several common misconceptions regarding the New Jersey Income Tax-Nonresident Composite Return, also known as Form NJ-1080C. Understanding these can help ensure that nonresident entities and their members comply correctly with New Jersey's tax regulations. Here, we aim to clarify some of these misunderstandings.
Not all nonresidents can be included in an NJ-1080C composite return. To be eligible, individuals must be members of specific entities such as general and limited partnerships, professional athletic teams, limited liability partnerships, and others specified. Furthermore, these individuals must meet all listed conditions, including being a nonresident for the entire year and not maintaining a permanent place of abode in New Jersey.
An individual’s election to be included in a composite return does not cover all types of New Jersey income. The composite return only includes income derived from or connected with the specific entity filing the return. Any other New Jersey-source income must be reported separately by the individual.
Entities no longer need to request permission from the Division of Taxation to file a composite return. This is a common misconception stemming from earlier rules. Now, any eligible entity can file an NJ-1080C without prior notification or permission from the taxation authorities.
Choosing to contribute $1 to the Gubernatorial Elections Fund does not affect the tax liability or refund amount on the NJ-1080C. The contribution is designed to be a neutral choice for the taxpayer, not impacting their financial responsibility to the state.
Participating in a composite return does not grant individual members an extension on their personal filing deadlines. While the composite return might have its own set of deadlines, each individual's obligation to file other necessary tax documents by the prescribed dates remains unchanged.
It’s important for all nonresident entities and their members to closely review the eligibility requirements and rules surrounding the filing of NJ-1080C forms. Ensuring accurate compliance with New Jersey’s taxation laws benefits all parties involved by minimizing errors and the potential for penalties.
Filing the NJ-1080C form is an important process for nonresident entities and individuals in New Jersey, ensuring compliance with state tax laws. Here are 10 key takeaways to keep in mind:
Understanding these points helps in navigating the process of filing the NJ-1080C form, ensuring accuracy and compliance with New Jersey tax obligations for nonresident entities and individuals.
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