N.J.A.C. 18:7-5.3 - Tax Paid to a Foreign Country or United States Possession; When Deductible From Net Income

(a) With respect to foreign taxes required to be included in income as dividends received pursuant to I.R.C. § 78, no deduction from Federal taxable income is permitted for the amounts that are excluded from the entire net income pursuant to N.J.S.A. 54:10A-4(k)(5) or eliminated pursuant to N.J.S.A. 54:10A-4.6(d).

1. However if the percent of the foreign tax amount is not excludable from entire net income as a dividend pursuant to N.J.S.A. 54:10A-4(k)(5) or eliminated pursuant to N.J.S.A. 54:10A-4.6(d), then the percentage that is taxed may be deducted from Federal taxable income. No other foreign taxes are deductible.

2. For privilege periods prior to the repeal of N.J.S.A. 54:10A-4.15 (that is, privilege periods beginning on and after January 1, 2018, but ending before July 31, 2023), with respect to foreign taxes required to be included in entire net income as dividends received pursuant to I.R.C. § 78 attributable to I.R.C. § 951A Global Intangible Low Taxed Income, only 50 percent can be deducted from entire net income.