New Jersey: Managerial member of combined group must obtain new tax identification number

On January 23, 2019, the New Jersey Division of Taxation issued guidance on an initial step in implementing the state’s combined reporting regime. Recall, combined reporting is effective for tax years ending on or after July 31, 2019. The guidance provides that the managerial member of each combined group must register with the New Jersey Division of Revenue and Enterprise Service using a web-based registration system that is currently being developed. After the managerial member registers, it will receive a New Jersey tax identification number specific to combined reporting. This unique identification number will serve as the combined group’s tax identification number and will be used to file the combined return on behalf of the group. The identification number will also serve as the number to which payments will be applied. Overpayments credited to the combined group by a taxpayer on a 2018 return will be applied to the combined group after the registration process is complete. In addition, estimated payments cannot be made until registration occurs. Further information will be provided at a later date on making estimated payments.

The managerial member of a combined group acts as the agent on behalf of all taxable members of the group.  The managerial member is required to address all tax matters and is also responsible for responding to notices and assessments for its combined group.  If the combined group has a common parent corporation and that common parent corporation is a taxable group member, the common parent corporation must register as the managerial member. If the common parent member is not a taxable member, the combined group must elect a taxable member as its managerial member. The election is binding for ten tax years. Please contact Jim Venere at 973-912-6349 with questions.