New Jersey S Corp Election: Why You (Probably) Don't Need to File Anything
Since December 22, 2022, New Jersey automatically honors your federal S Corp election — no Form CBT-2553, no separate state filing. Here's how the rule works, the two exceptions, and how NJ compares to New York.
Search "New Jersey S Corp election" and you'll find pages upon pages of advice telling you to file Form CBT-2553 with the state after your federal Form 2553 — complete with warnings about the shareholders who must sign it and the businesses that got accidentally taxed as C Corps for skipping it.
Most of that advice is out of date. New Jersey changed the rule, and for most businesses reading this today, the answer is delightfully short: you don't file anything with New Jersey.
The rule since December 22, 2022
Under P.L. 2022, c. 133, for tax years beginning on or after December 22, 2022, New Jersey automatically treats a corporation with a valid federal S election as a New Jersey S corporation. No separate state election. No CBT-2553. No extra shareholder consent forms mailed to Trenton.
In practice:
- You file federal Form 2553 with the IRS (that's the part FileMyScorp handles).
- The IRS accepts it and mails you a CP261 acceptance letter.
- That's it — New Jersey follows the federal election automatically. Your corporation files its NJ return on Form CBT-100S (the S Corporation return) going forward.
This brought New Jersey in line with the large majority of states that simply piggyback on the federal election. Before the change, NJ was one of the most notorious "gotcha" states — plenty of profitable S Corps discovered years later that they'd been C Corps in New Jersey's eyes the whole time.
The two exceptions that still involve paperwork
1. Old tax years (before December 22, 2022). The automatic rule is not retroactive. If your federal S election dates back years and you never filed New Jersey's election, tax years that began before December 22, 2022 still need a retroactive New Jersey S corporation application with the Division of Taxation to be treated as S years. This is cleanup work for older businesses — it has no effect on current-year filers.
2. Opting out. Some corporations actually want to remain C corporations for New Jersey while being S corporations federally (a "hybrid" — occasionally useful in multi-state structures). New Jersey allows it: 100% of shareholders must consent, the decision must be documented by the 15th day of the 3rd month of the tax year, and the corporation files the C Corp return (CBT-100) instead. There's no form to send the state — you keep the consent records. If this sounds like your situation, talk to your CPA; it's a deliberate tax-planning move, not a default.
New Jersey vs. New York — a study in opposites
It's easy to mix these up, and the two states could not be more different:
| New Jersey | New York | |
|---|---|---|
| Separate state S election? | No — automatic since Dec 22, 2022 | Yes — Form CT-6, always |
| What you file | Nothing (federal 2553 covers you) | CT-6, faxed to the NYS Tax Department |
| If you forget | Nothing to forget | Taxed as a NY C Corp until you fix it |
| Late/retroactive relief | Only needed for pre-2023 years | Discretionary, with an explanation statement + your CP261 |
If your business is in New York, the separate election is very much alive — and it's exactly why we built our free CT-6 add-on: check one box at intake and we prepare Form CT-6 from your filing details, collect the shareholder signatures, and fax it to Albany alongside your federal 2553. If your business is in New Jersey, enjoy the rare tax rule that got simpler.
The bottom line
- New NJ corporations (2023 onward): file federal Form 2553, keep your CP261 letter, file CBT-100S. New Jersey requires nothing else.
- Older NJ corporations with missing state elections: you may need a retroactive application for pre-2023 years — ask your CPA before filing back-year returns.
- Don't let a stale blog post talk you into hunting down Form CBT-2553 for a current-year election. The state itself will tell you the same thing: NJ Division of Taxation — S corporation procedural changes.
FileMyScorp is a private filing service operated by MI Tax LLC. We are not affiliated with the IRS or any state tax agency, and we don't provide legal, tax, or financial advice — for planning questions like the NJ opt-out, consult your accountant.
Ready to file your federal S Corp election?
The federal piece — Form 2553 — is still paper-only, still faxed or mailed to a specific IRS service center, and still voided by a single missing signature. FileMyScorp is the cheapest guided 2553 platform on the market: $49 fax · $50 certified mail · $99 both, flat fee, late elections under Rev. Proc. 2013-30 included free, and New York's CT-6 included free for NY filers. Start your filing — it takes about 10 minutes.
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