New Jersey: Guidance Issued on Combined Reporting Filing Options; Application of Joyce and Finnigan

The New Jersey Division of Taxation recently released yet another Technical Bulletin (TB-89) providing additional guidance on New Jersey’s various combined reporting filing methods. Recall, effective for tax years ending on and after July 31, 2019, corporations engaged in a unitary business are required to file a combined return. Although water’s-edge filing is the default methodology, the managerial member of the combined group may elect to file on a world-wide basis. Alternatively, the managerial member may make an affiliated group election. 
The Bulletin provides additional guidance on each of these filing methods, including confirming that groups filing on a water’s-edge or worldwide basis will use the so-called Joyce apportionment method, while taxpayers making an affiliated group election will use the Finnigan method. The Bulletin also provides additional information on which entities will be included in the affiliated group and clarifies that the Division will apply the beneficial and constructive ownership rules of IRC section 318 to determine which entities are commonly owned. Please contact Jim Venere at 973-912-6349 with questions on TB-89.