New Jersey § 54a:12-5

§ 54a:12-5.

a. Each member of a pass-through entity that elects to be liable for, and pay, the pass-through

business alternative income tax pursuant to section 3 of P.L.2019, c. 320 ( C.54A:12-3 ) for the taxable year shall be allowed a tax credit in the amount equal to the member's

direct share of the tax paid pursuant to section 3 of P.L.2019, c. 320 ( C.54A:12-3 ). The credit allowed to each member of the pass-through entity shall be applied for

the taxable year as follows: (1) a member who is a natural person shall be allowed a refundable credit against

the tax imposed under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. ; (2) a member that is an estate or trust shall be allowed a refundable credit against

the tax imposed under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. , which credit may be allocated to beneficiaries or may be used against the tax liability

of the estate or trust; (3) a member that is a corporation, other than an S corporation, shall be allowed

a refundable credit against (a) the surtax imposed under section 1 of P.L.2018, c. 48 ( C.54:10A-5.41 ) or (b) the tax imposed under section 5 of P.L.1945, c. 162 ( C.54:10A-5 ); (4) a member that is an S Corporation shall be allowed (a) a refundable credit against

the tax imposed under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. , which credit shall be allocated among the shareholders of the corporation or (b)

a refundable credit against the tax liability of the corporation, which credit may

be applied against: (i) the surtax imposed under section 1 of P.L.2018, c. 48 ( C.54:10A-5.41 ); (ii) the tax imposed under section 5 of P.L.1945, c. 162 ( C.54:10A-5 ); (iii) the tax imposed under subsection d. of section 4 of P.L.1993, c. 173 ( C.54:10A-5.23 ); or (iv) the tax imposed under section 3 of P.L.2019, c. 320 ( C.54A:12-3 ); and (5) a member that is an entity classified as a partnership for federal tax purposes

shall be allowed (a) a refundable credit against the tax imposed under the “New Jersey

Gross Income Tax Act,” N.J.S.54A:1-1 et seq. , which credit shall be allocated among the partners of the partnership, or (b) a

refundable credit against the tax liability of the partnership, which credit may be

applied against: (i) the tax imposed pursuant to section 12 of P.L.2002, c. 40 ( C.54:10A-15.11 ); (ii) the fee imposed pursuant to N.J.S.54A:8-6 ; or (iii) the tax imposed pursuant to section 3 of P.L.2019, c. 320 ( C.54A:12-3 ). b. The credit allowed by this section shall be available after the application of

all other credits allowed by law and claimed by the member, or as applicable, the beneficiary of a member estate or trust, the shareholder

of a member corporation, or the partner of a member partnership, in the taxable year. c. For a member, if the credit exceeds the amount of tax otherwise due, that amount of excess shall

be an overpayment for the purposes of N.J.S.54A:9-7 or R.S.54:49-15 , as appropriate ; provided however, that subsection (f) of N.J.S.54A:9-7 and section 7 of P.L.1992, c. 175 ( C.54:49-15.1 ) shall not apply. d. (Deleted by amendment, P.L.2021, c. 419 ) e. The director shall adopt regulations to allow the amount of the credit that shall

be determined to be an overpayment for the purposes of N.J.S.54A:9-7 or R.S.54:49-15 , as appropriate, to be applied against the estimated tax for a successive year.