312: Effluent Equipment Tax Credit (2024)

New Jersey · NJ Division of Taxation · Used for tax years 2024

Form 312 calculates the Effluent Equipment Tax Credit for the 2024 New Jersey Corporation Business Tax. It reports equipment costs, use in New Jersey, credits used or shared in prior years, and the credit available and allowable for the current tax period.

Who files this form

Complete Form 312 if you are claiming the Effluent Equipment Tax Credit on Form CBT-100, CBT-100S, or CBT-100U. You must also include the credit form for the year the credit was earned, even if you are not claiming the credit on that year's return.

To qualify, you must answer Yes to all three questions in Part I:

  • Was the equipment purchased in a tax period beginning on or after July 1, 2002?
  • Have you applied for or received a determination of environmentally beneficial operation from the Commissioner of the Department of Environmental Protection for the equipment?
  • Is the equipment used exclusively in New Jersey?

For a combined return, the member that earned the credit must complete the form.

What you'll need

Include these items with your Corporation Business Tax return:

  • A completed Form 312.
  • A copy of each determination of environmentally beneficial operation, if you have received it from the Commissioner of the Department of Environmental Protection.
  • An affidavit stating that the treatment or conveyance equipment is or will be used exclusively in New Jersey.

To complete the form, have the following information ready:

  • Each piece of equipment's description, month and year placed in service, and invoice cost.
  • Applicable Department of Environmental Protection loan amounts and Sales and Use Tax paid.
  • The number of months the equipment was used in New Jersey during the return period.
  • Credit used in prior years, including amounts shared with other combined group members.
  • Tax liability and other credits already applied on the current return. Combined return members not sharing their credit also need the group and member allocation factors from Schedule J, line 9.

If Part II does not have enough space, include an additional sheet in the same format with columns (A) through (I).

How to file

Include completed Form 312 with your CBT-100, CBT-100S, or CBT-100U return to validate the credit claim. The supplied text does not give a mailing address or e-filing directions.

  1. Complete Part I. If any answer is No, stop. You do not qualify for the credit.
  2. List each piece of equipment in Part II and calculate the available credit in Part III.
  3. If filing CBT-100 or CBT-100S, complete Part IV. Enter the allowable credit from line 16 on Schedule A-3, Part I of your return.
  4. If filing CBT-100U, check the combined return filers box and complete Part V, Section A instead of Part IV. If sharing the credit, enter line 24 in the member's column of Schedule A-3, Part I.
  5. If a combined return member is not sharing the credit, also fill in the nonsharing oval and complete Part V, Section B. Enter line 32 in the member's column of Schedule A-3, Part I of CBT-100U.

Common mistakes

  • Continuing after a No answer in Part I. Any No answer means you do not qualify. Do not complete the rest of the form.
  • Leaving out the form in the year the credit was earned. Include the credit form even if you are not claiming the credit that year.
  • Using the same costs for another credit. Costs used to calculate this credit cannot also be used to calculate another credit against the tax specified in the instructions.
  • Completing the wrong calculation section. CBT-100 and CBT-100S filers use Part IV. Combined return filers use Part V.
  • Skipping Section A when not sharing. Combined return members that do not share must complete both Sections A and B and fill in the nonsharing oval.
  • Omitting earlier credits. Include prior-year shared amounts in Part II, column (I), and list other credits already applied to current-year tax liability on line 14, 22, or 30, as applicable.

Questions people ask

Can unused credits be claimed in later years?

Yes. Unused credits may be claimed in subsequent tax years, subject to the limitations on Form 312.

Must I have received the environmental determination before answering Yes to question 2?

No. Question 2 asks whether you have applied for or received the determination. If you have received a determination, include a copy with your tax return.

How is the available credit calculated?

Part II subtracts the specified Department of Environmental Protection loan amount and Sales and Use Tax paid from the equipment's invoice cost. It then takes 50% of that amount and prorates it by months used in New Jersey divided by 12. In Part III, the available credit is the lesser of the resulting total minus credit used or shared in prior years, or 20% of that total. Parts IV or V apply further tax-liability limits.

Must a combined return member share its credit?

No. A member may choose not to share. It must fill in the nonsharing oval and complete both Sections A and B of Part V. The credit is limited by both the member-level and group-level calculations.

Official sources

All versions of 312