N.J.A.C. 18:7-21.21 - Subchapter S corporations and combined returns

(a) A New Jersey S corporation may elect to be included in a combined group reported on a combined return pursuant to this subchapter pursuant to N.J.S.A. 54:10A-4(ff). Subsequent to electing to be included in the combined group on the combined return, the S corporation shall be taxed in the same manner and rate as the other members of the combined group. The S corporation does not have to make an additional election to be taxed as a C corporation pursuant to N.J.S.A. 54:10A-5.22(d), as such election for inclusion as a member of a combined group is an election to be taxed as a C corporation.

(b) A Qualified Subchapter S Subsidiary of a New Jersey S corporation that has elected to be included on a combined return pursuant to N.J.S.A. 54:10A-4(ff) must also be included along with its corporate parent S corporation and shall be taxed in the same manner as the other members of the combined group. The Qualified Subchapter S Subsidiary does not have to make an additional election to be taxed as a C corporation pursuant to N.J.S.A. 54:10A-5.22(d), as such election for inclusion as a member of a combined group is an election to be taxed as a C corporation.

(c) An S corporation that has elected to be taxed as a C corporation pursuant to N.J.S.A. 54:10A-5.22(d) must be included as a member of the combined group.

(d) A Qualified Subchapter S Subsidiary that has elected to be taxed as a C corporation pursuant to N.J.S.A. 54:10A-5.22(d) must be included as a member of the combined group.

(e) Only one election is necessary for either an S corporation or a Qualified Subchapter S Subsidiary to be taxed as a C corporation and to be included in the combined group.