Table of Contents
The CBT-2553 form is an essential document for corporations operating in New Jersey that wish to elect to be treated as S corporations or Qualified Subchapter S Subsidiaries (QSSS). This form must be completed accurately to ensure compliance with state tax regulations. It serves multiple purposes, including the initial election to become a New Jersey S corporation, reporting changes in shareholders, and electing QSSS status. Corporations must provide detailed corporate information, including their name, federal employer identification number, and the effective dates for the elections. Additionally, the form requires consent from all shareholders, ensuring that they agree to the corporation's tax obligations under New Jersey law. Importantly, the CBT-2553 only needs to be filed once, eliminating the need for annual renewals. The process also includes sections for corporate officers to affirm the accuracy of the information provided, as well as provisions for shareholders who are no longer part of the corporation. Understanding the nuances of this form is crucial for corporations aiming to navigate New Jersey's tax landscape effectively.
Sample - Cbt 2553 Form
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State of New Jersey |
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Division of Taxation |
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New Jersey S Corporation or New Jersey QSSS Election |
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Check the appropriate box: |
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Initial S Corporation Election |
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New Jersey QSSS Election (See Part V) |
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Change in S or QSSS Corporation Shareholders |
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IMPORTANT: This form only has to be filed once. There is no renewal required. Please Note: All changes can be filed with the S corporation final return.
Part I |
Corporate Information (Type or Print) |
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Name of Corporation |
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Federal Employer Identification Number |
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Mailing Address |
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New Jersey Corporation Number |
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City or Town, State and ZIP Code |
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Name and telephone number of corporate officer or legal representative |
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Check here |
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if the corporation has changed its name or address in the past 12 months |
Date of Incorporation |
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State of Incorporation |
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Election Information |
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Enter the effective date of the Federal S corporation election ________/________/________ |
Applied for |
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month |
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year |
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New Jersey S corporation or New Jersey QSSS election is to be effective for tax year beginning _______/_______/_______ ending _______/_______/_______
month day year month day year
NOTE: If this election takes effect for the first tax year the corporation exists, enter for item 2 and item 3, the month, day and year of the earliest of the following:
(1)date the corporation first had shareholders, (2) date the corporation first had assets, or (3) date the corporation began doing business. If the accounting period you enter is for an automatic
Part II Shareholder’s Consent Statement - By signing this election, we the undersigned shareholders, consent (1) to the corporation’s election to be treated as a New Jersey S corporation under N.J.S.A.
Name of each shareholder, person having a |
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Stock Owned |
Social Security Number |
* Share- |
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community property interest in the corporation’s |
*** Signatures must be provided *** |
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holder’s |
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stock, and each tenant in common, joint tenant, and |
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Dates |
Employer Identification Number |
state of |
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tenant by the entirety. (A husband and wife (and |
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for an estate or qualified trust |
residency |
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their estates) are counted as one shareholder). |
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shares |
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* You must provide the address of any shareholder who is not a resident of New Jersey on a rider and attach it to this form.
Part III Corporation’s Consent Statement - The above named corporation consents (1) to the election to be treated as a New Jersey S corporation under N.J.S.A.
Under penalties of perjury, I declare that I have examined this election, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.
____________________________________________________________________________________________________________________________X
Signature of authorized officer |
Title |
Date |
Part IV Persons who are no longer shareholders of the corporation.
Do not enter any shareholder who sold or transferred all of his or her stock before the election was made.
Name of shareholder, person no longer having a community |
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Social Security Number |
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property interest in the corporation’s stock, tenant in common, |
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joint tenant, or tenant by the entirety. (A husband and wife |
Stock Relinquished |
Employer Identification Number |
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(and their estates) are counted as one shareholder). |
for an estate or qualified trust |
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Under penalties of perjury, I declare that the above, to the best of my knowledge and belief, is true, correct, and complete.
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Signature of authorized officer |
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PART V Qualified Subchapter S Subsidiary Election
Corporation’s Consent Statement - The above named corporation consents (1) to the election to be treated as a “New Jersey Qualified Subchapter S Subsidiary”, and (2) to file a
Under penalties of perjury, I declare that I have examined this election, and to the best of my knowledge and belief, it is true, correct, and complete.
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Signature of authorized officer |
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Corporate Parent Company’s Consent Statement - By signing this election, the undersigned corporation consents (1) to the subsidiary’s elec- tion to be treated as a “New Jersey Qualified Subchapter S Subsidiary” and (2) to taxation by New Jersey by filing a
Corporate Parent Name
Address
FID Number
Under penalties of perjury, I declare that I have examined this election, and to the best of my knowledge and belief, it is true, correct, and complete.
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Signature of authorized officer |
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INSTRUCTIONS FOR FORM
1.Purpose - A corporation must file form
2.Who may elect - A corporation may make the election to be treat- ed as a New Jersey S corporation only if it meets all of the follow- ing criteria:
a)The corporation is or will be an S corporation pursuant to section 1361 of the Federal Internal Revenue Code;
b)Each shareholder of the corporation consents to the election and the jurisdictional requirements as detailed in Part II of this form;
c)The corporation consents to the election and the assumption of any tax liabilities of any nonconsenting shareholder who was not an initial shareholder as indicated in Part III of this form.
3.Where to file - Mail form
4.When to make the election - The completed form
5.Acceptance or
ed within 30 days after the filing of the
6.End of election - Generally, once an election is made, a corpora- tion remains a New Jersey S corporation as long as it is a Federal S corporation. There is a limited opportunity to revoke an election only during the first tax year to which an election would otherwise apply. To revoke an election, a letter of revocation signed by
shareholders holding more than 50% of the outstanding shares of stock on the day of revocation should be mailed to the address in instruction 3 on or before the last day of the first tax year to which the election would otherwise apply. A copy of the original election should accompany the letter of revocation. Such a revocation will render the original election null and void from inception.
7.Initial election - Complete Parts I, II and III in their entirety for an initial New Jersey S Corporation election. Each shareholder who owns (or is deemed to own) stock at the time the election is made, must consent to the election. A list providing the social security number and the address of any shareholder who is not a New Jersey resident must be attached when filing this form.
8.Reporting shareholders who were not initial shareholders - Complete Parts I, II and III when filing this form to report any new shareholder. A new shareholder is a shareholder who, prior to the acquisition of stock, did not own any shares of stock in the S cor- poration, but who acquired stock (either existing shares or shares issued at a later date) subsequent to the initial New Jersey S cor- poration election. If a new shareholder fails to sign a consent statement, the corporation is obligated to fulfill the tax require- ments as stated in Part III on behalf of the nonconsenting share- holder. An existing shareholder whose percentage of stock own- ership changes is not considered a new shareholder. If the tax- payer previously had elected to be treated as a New Jersey QSSS, the new shareholder must also complete Part V.
9.Part IV should only be completed for any person who is no longer a shareholder of the corporation. You do not have to enter any shareholder who sold or transferred all of his or her stock before the election was made. All changes can be filed with the S corpo- ration final return.
10.Part V must be completed in order to permit a New Jersey S Corporation to be treated as a New Jersey Qualified Subchapter S Subsidiary and remit only a minimum tax. In addition, the parent company also must consent to filing and remitting New Jersey Corporation Business Tax which would include the assets, liabili- ties, income and expenses of its QSSS along with its own. Failure of the parent either to consent or file a
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Mail to: |
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PO Box 252 |
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Trenton, NJ |
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State of New Jersey
Division of Taxation
New Jersey S Corporation Certification
This certification is for use by unauthorized foreign
Part I. Corporate Information (Type or Print)
Name of Corporation: ____________________________________________________
Federal Employer Identification Number: ______ - _____________________________
Part II. Corporate Attestation
By signing this statement, the corporation affirms that the corporation has not conducted any activi- ties within this state that would require the Corporation to file a Certificate of Authority in accordance with N.J.S.A.
Print the name and title of the person executing this document on behalf of the Corporation. This person must be a corporate officer.
Name: ________________________________ |
Title: ___________________________ |
Signature: _____________________________ |
Date: ___________________________ |
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Instructions for Form
1.This form is to be used by
2.Name of Corporation: Type or print name exactly as it appears on form
3.Federal Employer Identification Number (FEIN): Please enter the Federal Identification Number assigned by the Internal Revenue Service.
4.Please read the Corporate Attestation and the cited statutes for compliance.
5.Print the name and title of the corporate officer signing this document and the
6.Mail the completed forms to: New Jersey Division of Revenue, PO Box 252 Trenton, NJ
(1)No foreign corporation shall have the right to transact business in this State until it shall have procured a certificate of authority so to do from the Secretary of State. A foreign corporation may be authorized to do in this State any business which may be done lawfully in this State
by a domestic corporation, to the extent that it is authorized to do such business in the jurisdiction of its incorporation, but no other business.
(2)Without excluding other activities which may not constitute transacting business in this State, a foreign corporation shall not be considered to be transacting business in this State, for the purposes of this act, by reason of carrying on in this State any one or more of the following activities
(a)maintaining, defending or otherwise participating in any action or proceeding, whether judicial, administrative, arbitrative or otherwise, or effecting the settlement thereof or the settlement of claims or disputes;
(b)holding meetings of its directors or shareholders;
(c)maintaining bank accounts or borrowing money, with or without security, even if such borrow- ings are repeated and continuous transactions and even if such security has a situs in this State;
(d)maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities.
(3)The specification in subsection
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File Specs
| Fact Name | Description |
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| Purpose of Form | The CBT-2553 form is used by corporations in New Jersey to elect S corporation status or to report changes in shareholders. |
| Filing Frequency | This form only needs to be filed once. There is no renewal required after the initial submission. |
| Governing Law | The election is governed by N.J.S.A. 54:10A-1, et seq., which outlines the requirements and procedures for S corporations in New Jersey. |
| Filing Deadline | The completed form must be filed within one calendar month of the time a Federal S corporation election is required. |
| Shareholder Consent | All shareholders must consent to the election for it to be valid. Their signatures are required on the form. |
Cbt 2553 - Usage Guidelines
Filling out the CBT-2553 form is a crucial step for corporations in New Jersey looking to elect S corporation status. This form must be completed accurately to ensure compliance with state tax regulations. Once the form is filled out, it should be submitted to the New Jersey Division of Revenue for processing.
- Begin by checking the appropriate box at the top of the form to indicate whether this is an initial S corporation election, a New Jersey QSSS election, or a change in S or QSSS corporation shareholders.
- In Part I, provide the corporate information. Enter the name of the corporation, Federal Employer Identification Number, and New Jersey Corporation Number. Fill in the mailing address, including the city, state, and ZIP code.
- Include the name and telephone number of a corporate officer or legal representative. Check the box if the corporation has changed its name or address in the past 12 months.
- Provide the date of incorporation and the state of incorporation.
- Enter the effective date of the Federal S corporation election and the dates for the New Jersey S corporation or New Jersey QSSS election. Ensure these dates correspond with the tax year beginning and ending dates.
- In Part II, gather signatures from all shareholders. Each shareholder must consent to the election by signing and dating the consent statement. Include their Social Security Number and stock ownership.
- In Part III, the authorized officer of the corporation must sign and date the consent statement indicating the corporation’s agreement to the election.
- Complete Part IV if there are any shareholders who are no longer part of the corporation. List their names, Social Security Numbers, and the date they relinquished their stock.
- If applicable, complete Part V for Qualified Subchapter S Subsidiary election. The authorized officer must sign and date this section.
- Double-check all entries for accuracy and completeness. Ensure that all required signatures are present.
- Mail the completed form to the New Jersey Division of Revenue at the address provided on the form. A registered mail receipt is recommended for tracking purposes.
Your Questions, Answered
What is the purpose of the CBT-2553 form?
The CBT-2553 form is used by corporations in New Jersey to elect to be treated as a New Jersey S corporation or a New Jersey Qualified Subchapter S Subsidiary (QSSS). It is also utilized to report any changes in shareholders. This election is crucial for tax purposes, as it determines how the corporation will be taxed at both the state and federal levels.
Who is eligible to file the CBT-2553 form?
A corporation can file the CBT-2553 form if it meets specific criteria. It must be or will be an S corporation under federal law. Additionally, all shareholders must consent to the election, and the corporation must agree to assume tax liabilities for any nonconsenting shareholders who were not initial shareholders. These requirements ensure that all parties involved are aware and agree to the tax implications of the election.
When should the CBT-2553 form be filed?
The completed CBT-2553 form should be filed within one calendar month of the time a federal S corporation election would be required. Specifically, it must be submitted before the 16th day of the fourth month of the first tax year the election is to take effect. If the election is made after this deadline, it will apply to the following tax year.
What happens after the CBT-2553 form is submitted?
Once the CBT-2553 form is filed, the New Jersey Division of Revenue will notify the corporation within 30 days regarding the acceptance or non-acceptance of the election. If no notification is received within this timeframe, it is advisable to contact the Division of Revenue for clarification.
Can the election be revoked after it has been made?
Yes, the election can be revoked, but only during the first tax year it applies to. To revoke the election, a letter signed by shareholders holding more than 50% of the outstanding shares must be sent to the Division of Revenue. This letter should include a copy of the original election and must be mailed before the last day of the first tax year to which the election applies.
What additional information must be provided for non-resident shareholders?
If any shareholder is not a resident of New Jersey, their address must be included on a separate rider attached to the CBT-2553 form. This ensures that the state has accurate information for tax purposes and can appropriately manage any tax obligations related to non-resident shareholders.
Common mistakes
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Incomplete Information: Failing to fill out all required fields can lead to delays. Ensure that the corporation name, Federal Employer Identification Number (FEIN), and mailing address are complete and accurate.
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Incorrect Effective Dates: Entering the wrong effective date for the S corporation election can cause significant tax implications. Double-check that the date aligns with the corporation's tax year.
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Missing Shareholder Consent: Each shareholder must consent to the election. Omitting a signature or failing to provide the necessary information for each shareholder can invalidate the election.
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Neglecting Non-Resident Shareholder Addresses: If any shareholders are not residents of New Jersey, their addresses must be attached as a rider. Failing to do so can lead to complications.
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Improper Filing of Part IV: Part IV should only include shareholders who are no longer part of the corporation. Including current shareholders or those who sold their shares after the election can create confusion.
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Ignoring Filing Deadlines: The form must be filed within specific timeframes. Missing the deadline can result in the election being treated as made for the next year.
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Failure to Attach Required Documentation: Any additional sheets or documents, such as a continuation sheet for extra shareholders, must be included. Omitting these can lead to rejection of the application.
Documents used along the form
When completing the CBT-2553 form for New Jersey S Corporation status, several other documents may be necessary to ensure compliance and proper processing. Here is a list of important forms and documents often used alongside the CBT-2553:
- CBT-100S: This form is used to report the income, deductions, and tax liability of a New Jersey S Corporation. It ensures that the corporation meets its tax obligations in the state.
- CBT-100: This form is for corporations that do not qualify as S Corporations. It is required for filing corporate taxes in New Jersey.
- Corporate Consent Statement: This document signifies that all shareholders consent to the S Corporation election. It is crucial for validating the election.
- Shareholder Consent Statements: Individual consent statements from each shareholder are necessary. They confirm that each shareholder agrees to the S Corporation election and its implications.
- Continuation Sheet: If there are more shareholders than can be listed on the CBT-2553, a continuation sheet may be needed to provide additional information about those shareholders.
- Corporate Parent Company Consent Statement: For Qualified Subchapter S Subsidiaries (QSSS), this statement is required from the parent corporation, indicating consent to the subsidiary's S Corporation election.
- CBT-2553 Cert: Non-New Jersey entities applying for S Corporation status must complete this form. It confirms that the entity has not conducted business in New Jersey that would require a Certificate of Authority.
Gathering these documents can streamline the process and help ensure that your application is processed without delays. Each form serves a specific purpose and is essential for compliance with New Jersey's tax regulations.
Similar forms
The CBT-2553 form is similar to the IRS Form 2553, which is used for federal tax purposes. Both forms allow a corporation to elect S corporation status, enabling it to be taxed as a pass-through entity. This means that the corporation's income is reported on the shareholders' personal tax returns, avoiding double taxation. Just like the CBT-2553, the IRS Form 2553 requires consent from all shareholders to validate the election. The timing for filing is also crucial; both forms must be submitted within specific deadlines to ensure the election is effective for the desired tax year.
Another document similar to the CBT-2553 is the New Jersey CBT-100 form, which is the corporate business tax return for corporations operating in New Jersey. While the CBT-2553 is focused on electing S corporation status, the CBT-100 is used to report income, deductions, and tax liabilities. Both forms require accurate corporate information and details about shareholders. The CBT-100 ultimately reflects the tax obligations that arise from the election made on the CBT-2553, highlighting the interconnectedness of these documents in the tax process.
The IRS Form 1120S is another related document, as it is the tax return filed by S corporations at the federal level. Similar to the CBT-2553, the Form 1120S is used by S corporations to report income, deductions, and credits. Both forms require detailed information about the corporation and its shareholders. While the CBT-2553 is about making the election, the Form 1120S is about reporting the financial results of that election. This shows how the election process leads to ongoing reporting requirements for S corporations.
Lastly, the New Jersey CBT-100S form is specifically designed for S corporations to report their business income and pay the minimum tax. Like the CBT-2553, the CBT-100S is tailored for S corporations and includes provisions for shareholder information. Both forms emphasize the importance of shareholder consent and compliance with New Jersey tax laws. The CBT-100S serves as a follow-up to the CBT-2553, allowing S corporations to fulfill their tax obligations after the election has been made.
Dos and Don'ts
When filling out the CBT-2553 form, there are important guidelines to follow. Adhering to these can help ensure that the process goes smoothly.
- Do ensure accuracy: Double-check all entries for correctness, including names, addresses, and identification numbers.
- Do provide all required signatures: Ensure that every shareholder and authorized officer signs the form where indicated.
- Do attach necessary documentation: Include any required riders or continuation sheets, especially for shareholders who are not New Jersey residents.
- Do file on time: Submit the form within the specified timeframe to avoid delays or rejections.
- Do keep a copy: Retain a copy of the completed form for your records after submission.
- Don't leave fields blank: Fill in all required fields completely to prevent processing issues.
- Don't forget to check the appropriate box: Indicate whether this is an initial election or a change in shareholders.
- Don't use outdated forms: Ensure you are using the most current version of the CBT-2553 form.
- Don't submit without reviewing: Review the entire form for any errors or omissions before mailing.
- Don't ignore instructions: Follow all instructions carefully to ensure compliance with state requirements.
Misconceptions
- Misconception 1: The CBT-2553 form needs to be filed annually.
- Misconception 2: Only certain types of corporations can file the CBT-2553.
- Misconception 3: All shareholders must be New Jersey residents to file the CBT-2553.
- Misconception 4: The CBT-2553 form can be filed at any time.
- Misconception 5: Filing the CBT-2553 guarantees automatic acceptance of S corporation status.
- Misconception 6: Once filed, the S corporation status cannot be revoked.
- Misconception 7: The CBT-2553 form is only for initial elections.
This is incorrect. The CBT-2553 form only needs to be filed once for the initial election. There is no renewal required.
In reality, any corporation that meets the requirements to be treated as an S corporation can file this form, regardless of its type.
This is not true. Non-resident shareholders can be included, but their addresses must be provided on a separate rider attached to the form.
This is misleading. The form must be filed within one calendar month of the time a Federal S corporation election would be required.
Acceptance is not guaranteed. The Division of Revenue will notify the corporation of acceptance or non-acceptance within 30 days after filing.
This is incorrect. A corporation can revoke its S corporation status during the first tax year by submitting a letter of revocation signed by shareholders holding more than 50% of the outstanding shares.
In addition to initial elections, this form is also used to report changes in shareholders. It serves multiple purposes related to S corporation status.
Key takeaways
Filling out and using the CBT-2553 form is a crucial step for corporations in New Jersey wishing to elect S corporation status. Here are some key takeaways to consider:
- One-Time Filing: The CBT-2553 form only needs to be filed once. Once the election is made, there is no requirement for renewal, simplifying the ongoing compliance process for corporations.
- Shareholder Consent: Each shareholder must consent to the election. This is essential for the validity of the election. If there are any changes in shareholders after the initial election, the corporation must file an updated CBT-2553 form.
- Timely Submission: The form must be submitted within one calendar month of the required federal S corporation election. Missing this deadline could result in the election being treated as applicable for the next tax year, which may not align with the corporation's intentions.
- Notification of Acceptance: After submitting the form, the New Jersey Division of Revenue will notify the corporation within 30 days whether the election has been accepted. If there is no communication within this timeframe, it is advisable to follow up with the Division.