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New Jersey July 1 deadline for net deferred tax liability deduction

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June 2020


New Jersey is implementing mandatory combined reporting applicable for tax years ending on or after July 31, 2019.  Recognizing that certain companies could be adversely affected by the shift to combined reporting, a special ASC-740 relief deduction was included in New Jersey law.

To claim the deduction, taxpayers must complete Form DT-1 on or before July 1, 2020. Form DT-1 is available on the Division of Taxation’s website. Failure to file the form by July 1, 2020, will result in a loss of the NDTLD. No extensions of time to file this statement will be granted. Form DT-1 and any accompanying riders must be electronically filed.

The takeaway

Due to New Jersey’s budget difficulties, it remains uncertain whether the NDTLD ultimately will be allowed and not legislatively deferred or eliminated (see SB 2513).  Nevertheless, it is advisable to file the DT-1 by the due date and preserve the opportunity to claim the deduction.

The signature line does not state who should sign the form. Taxpayers should consider whether an officer of the corporation should be the signer.

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Peter Michalowski

Partner, State and Local Tax Consulting Leader, PwC US

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