How to Form an S Corp in New Jersey
New Jersey recognizes S corporations. To form an S corp in New Jersey, file articles of incorporation and elect S corp status federally and at the state level. Shareholder liability is limited. New Jersey now automatically conforms to the federal election. Out-of-state corporations must register to do business in New Jersey and obtain a tax ID number. All shareholders must be U.S. citizens or residents. A key advantage of a New Jersey S corp is only being taxed once at the individual level.
Taxation of an S Corp in New Jersey
New Jersey imposes a flat tax rate of 9% on corporations. S corps pass income, deductions, and credits through to shareholders’ personal tax returns, avoiding double taxation. To revoke an S corp election in New Jersey, file a letter of revocation signed by over 50% of shareholders.
Differences in State Recognition of S Corps
New Jersey recognizes S corporations. Shareholders must be U.S. citizens or residents. The state automatically conforms to the federal S corp election. Out-of-state corporations must register to do business in New Jersey. A key advantage of a New Jersey S corp is only being taxed once at the individual level.