New Jersey Corporate Tax: What It Is and How It Works
11 hours ago
A business owner researching how corporations are taxed in New Jersey.
SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below.
New Jersey applies a graduated corporation business tax (CBT) on corporations, with rates that vary based on income. Recent law changes have added extra fees for some corporations, affecting their total tax costs. Due to these complexities, working with a financial advisor can help businesses stay compliant and find tax-saving opportunities.
In New Jersey, corporate tax rates are based on a corporation's entire net income (ETI). As of 2025, the state's CBT rates are structured as follows:
Corporation's Entire Net income (ETI)
Tax Rate
$50,000 or less
6.5%
Over $50,000 and up to $100,000
7.5%
Over $100,000
9.0%
In addition to these rates, a corporate transit fee of 2.5% is imposed on businesses with annual taxable net income allocated to New Jersey exceeding $10 million. Only S corporations and public utilities are exempt from this fee. The corporate transit fee applies to the entire taxable net income, effectively raising the tax rate to 11.5% for these corporations, positioning New Jersey as having one of the highest corporate tax rates in the nation.
Additionally, all corporations are subject to a minimum tax based on their New Jersey gross receipts, ranging from $500 to $2,000 based on the amount of a corporation's gross receipts.
The CBT applies to a corporation’s entire net income, which is federal taxable income adjusted by specific New Jersey modifications. For corporations with taxable net income over $10 million, the corporate transit fee further increases the tax liability.
As anexample, consider a corporation with $12 million in taxable net income allocated to New Jersey.
For the standard CBT, the corporation would be taxed at a rate of 9% on their ETI. Then, because their annual taxable net income allocated to New Jersey is over $10 million, the corporation would also pay the corporate transit fee, which is 2.5%. In this example, the corporation’s effective tax rate is 11.5% of its taxable net income.
Here is how the math would work out:
Standard CBT: Entire $12 million taxed at a rate of 9% = $1,080,000
plus
Corporate Transit Fee: Entire $12 million taxed at 2.5% = $300,000
Total tax liability = $1,380,000
New Jersey’s corporate tax landscape has changed over the years.
In 2018, a temporary 2.5% surtax was introduced for corporations with taxable net income over $1 million, raising the top rate to 11.5%. This surtax was extended through 2023 but expired at the end of that year.
Then, in June 2024, Governor Phil Murphy signed legislation enacting the corporate transit fee, effective for tax years beginning January 1, 2024, through December 31, 2028. This fee reintroduced the 11.5% tax rate but applied it only to corporations with taxable net income exceeding $10 million.
The revenue generated is intended to support the state’s transit system and fund infrastructure projects.
A business owner filing corporate taxes in New jersey.
Filing corporate taxes in New Jersey requires businesses to follow specific steps to comply with state tax laws. Corporations operating in New Jersey must file a corporation business tax (CBT) return annually, reporting their taxable net income and determining their total tax liability.
New Jersey uses a combination of tax brackets and additional fees, such as the corporate transit fee, for high-income corporations. Companies must also consider estimated tax payments, deductions and applicable tax credits.
Here are six general steps to file your corporate taxes in the Garden State.
Before filing, corporations must confirm their tax status and determine whether they are required to file a CBT return. In general, corporations conducting business in New Jersey, earning income from the state or having employees or assets within the state are subject to the corporation business tax:
Domestic corporations (incorporated in New Jersey) and foreign corporations (incorporated in other states but doing business in New Jersey) must file.
S corporations must file a different return using Form CBT-100S, while C corporations file Form CBT-100.
Businesses that qualify for tax exemptions, such as certain nonprofit organizations, may not be required to file but must confirm their exemption status with the New Jersey Division of Taxation.
Accurate record-keeping is essential for corporate tax filings. Before completing the tax return, businesses must compile financial statements and supporting documents, including:
Profit and loss statements and balance sheets
Records of taxable income, deductions and tax credits
Payroll records for employee-related expenses
Documentation of estimated tax payments made during the year
New Jersey requires corporations to file the correct tax forms based on their corporate structure. The primary forms include:
CBT-100: For C corporations filing a standard corporate tax return
CBT-100S: For S corporations
CBT-150: For estimated tax payments throughout the year
New Jersey requires corporations with prior year tax liability of $1,500 or more to "make four 25% estimated tax payments" in its accounting period towards the current year's tax. These payments help businesses avoid underpayment penalties:
Estimated taxes are due in either three or four installments throughout the year, depending on the amount of the prior year's gross receipts.
Corporations calculate their estimated payments using the prior year’s tax liability or by projecting current-year taxable income.
Payments can be made electronically through the New Jersey Division of Taxation’s online portal.
Corporate tax returns are generally due on the 15th day of the fourth month after the end of the tax year. For most corporations using a calendar tax year, the filing deadline is April 15:
Returns can be filed electronically through New Jersey’s online tax filing system or via an authorized third-party tax provider.
Corporations that need extra time to file can request an automatic six-month extension using Form CBT-200-T. However, any tax due must still be paid by the original filing deadline.
Payments for any remaining tax due can be made electronically or by mailing a check with the tax return.
After filing, businesses should keep copies of their corporate tax returns and supporting documents for at least six years in case of an audit or review by the New Jersey Division of Taxation. Maintaining accurate records can also help businesses track deductions and plan for future tax years.
Corporations should stay updated on any changes to New Jersey’s corporate tax laws to comply with state requirements. Businesses with complex tax situations may benefit from working with a financial advisor or tax professional to claim deductions and credits, and resolve compliance issues.
A financial advisor reviewing a tax plan for a corporation.
New Jersey’s corporate tax structure requires corporations to keep up with current rates, additional fees and legislative changes. The corporate transit fee has increased tax costs for certain corporations, making strategic tax planning more important. Additionally, the state imposes a graduated corporation business tax (CBT), with rates varying based on income levels.
A financial advisor can help your businesses develop effective tax strategies and maintain compliance with government regulations. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
