326: Drug Donation Program Tax Credit (2024)
New Jersey · NJ Division of Taxation · Used for tax years 2024
Form 326 calculates the 2024 New Jersey Corporation Business Tax credit for donations of drugs or administration supplies through a qualifying drug donation program. It reports the available credit, the amount allowed for the current tax period, and any unused credit carried forw
Who files this form
Complete Form 326 if you are claiming the Drug Donation Program Tax Credit on New Jersey Form CBT-100, CBT-100S, or CBT-100U. The instructions also require taxpayers to include the credit form for the year the credit was earned, even if they are not claiming it on that year’s return.
To qualify, you must answer “YES” to both questions in Part I:
- Did you donate over-the-counter drugs, prescription drugs, or administration supplies to a redistributor as part of a qualified drug donation program?
- Did you receive a receipt from the redistributor that calculates and certifies the credit amount?
For a combined return, the member that earned the credit must complete Form 326.
What you'll need
Have these documents and figures ready:
- Receipt(s) from the redistributor showing the approved credit amount. You must attach these to Form 326.
- Your CBT-100, CBT-100S, or CBT-100U return, including the tax liability figures needed for the credit calculation.
- Any credit carried forward from a prior privilege period or tax year.
- Details of other tax credits already applied to the current return.
CBT-100 and CBT-100S filers need New Jersey gross receipts to determine the required minimum tax, plus group payroll information if the affiliated or controlled group rule applies. Combined return members not sharing the credit also need the group and member allocation factors from Schedule J, line 9.
How to file
Include the completed Form 326 and redistributor receipt(s) with your CBT-100, CBT-100S, or CBT-100U return to validate the claim. The supplied text does not give a mailing address or e-filing directions.
- Complete Part I. If either answer is “NO,” stop. You do not qualify for the credit.
- In Part II, enter the approved credit amounts from your receipts and any prior credit carryforward.
- CBT-100 and CBT-100S filers complete Part III and report the allowable credit from line 13 on Schedule A-3, Part I.
- CBT-100U filers mark the combined return indicator and complete Part IV, Section A instead of Part III. If sharing the credit, report line 22 in the member’s column of Schedule A-3, Part I.
- Combined return members not sharing the credit must also fill in the non-sharing oval and complete Section B. Report line 31 in the member’s column of Schedule A-3, Part I.
Common mistakes
- Continuing after a “NO” answer in Part I. Both answers must be “YES” to qualify.
- Leaving out the receipts. Attach the redistributor receipt(s) to Form 326 and include them with the return.
- Using the same amounts for another credit. Amounts included in this credit’s calculation cannot also be included in the calculation of another credit.
- Completing the wrong part. Combined return filers must skip Part III and complete Part IV, Section A. Members not sharing must also complete Section B and mark the non-sharing oval.
- Omitting credits already applied. List other credits already used against the relevant taxpayer, group, or member tax liability.
- Omitting the form because you are not using the credit yet. Include the credit form in the year the credit was earned, even if you are not claiming the credit on that return.
Questions people ask
How is the credit amount determined?
The credit equals the cost of the donated items plus the verifiable costs incurred to make the donation. Enter the approved credit amount shown on the redistributor’s receipt(s).
Can the credit eliminate all of my tax?
No. This credit, together with other credits taken, is limited to 50% of total tax liability and cannot reduce tax below the statutory minimum. Part IV applies the group and member limits for combined return filers.
What happens to unused credit?
Unused credit can be carried forward for up to 20 privilege periods.
Must a combined return member share its credit?
No. Members may choose not to share. A member making that choice must mark the non-sharing oval and complete both Sections A and B of Part IV. Its allowable credit is also limited by the amount that would have been allowed against the group’s tax liability.