326: Drug Donation Program Tax Credit (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
Form 326 calculates the 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 forward.
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 you to include the credit form in the year the credit was earned, even if you are not claiming the credit on that year's return.
To qualify, you must:
- Donate over-the-counter drugs, prescription drugs, or administration supplies to a redistributor as part of a qualified drug donation program.
- 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
- Redistributor receipts: Attach the receipt or receipts that calculate and certify the credit amount for your donations.
- Your Corporation Business Tax return: Use Form CBT-100, CBT-100S, or CBT-100U to obtain the tax liability figures and report the allowable credit on Schedule A-3, Part I.
- Credit information: Have the amount of any credit carried forward from the prior period and details of other tax credits already applied to the current return.
- Minimum tax information: CBT-100 and CBT-100S filers need the applicable New Jersey gross receipts and, where required, affiliated or controlled group payroll information. An S corporation filing with its QSSS entities uses the aggregate minimum tax from Schedule Q, Part I, line 1.
- For combined members not sharing the credit: Use the group and member allocation factors from Schedule J, line 9.
How to file
Include the completed Form 326 and the redistributor receipts 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. Both qualification answers must be “YES.” If either answer is “NO,” stop. You do not qualify for the credit.
- Complete Part II. Enter the approved credit amounts from the receipts and add any credit carried forward from the prior period.
- Calculate the allowable credit. CBT-100 and CBT-100S filers complete Part III. CBT-100U filers complete Part IV, Section A, instead.
- For combined returns, mark the combined return filers box. Members not sharing their credit must also fill in the nonsharing oval and complete Part IV, Section B.
- Report the allowable credit on Schedule A-3, Part I. Use line 13 for CBT-100 or CBT-100S. For CBT-100U, use line 22 if sharing or line 31 if not sharing, and enter it in the member's column.
- Calculate the carryforward. Use line 14, 23, or 32, as applicable.
Common mistakes
- Leaving out receipts. The redistributor receipts must be attached to Form 326.
- Continuing after a “NO” answer in Part I. Both answers must be “YES” to qualify.
- Using the same amounts for another credit. Amounts included in this credit's calculation cannot also be included in the calculation of any other credit.
- Skipping the form because you are not using the credit yet. Include the appropriate credit form in the year the credit was earned, even if you are not claiming it on that return.
- Completing the wrong part for a combined return. Combined return filers must skip Part III and complete Part IV, Section A. Nonsharing members must also complete Section B and mark the nonsharing oval.
- Omitting other credits already applied. List them on line 11, 20, or 29, as applicable, so the allowable credit is calculated correctly.
- Applying the credit against the Corporate Transit Fee. The credit cannot be used against that fee.
Questions people ask
How is the credit amount determined?
The program provides a credit equal to the cost of the donated items plus the verifiable costs incurred to make the donation. Enter the approved credit amount shown on the redistributor receipts in Part II.
Can the credit eliminate my Corporation Business Tax liability?
No. This credit, together with other credits taken, is limited to 50% of your total tax liability and cannot reduce it below the statutory minimum. Combined return filers must follow the group limits and, if not sharing, the additional member limits in Part IV.
What happens to credit I cannot use now?
Unused credit can be carried forward for up to 20 privilege periods.
Must a combined group member share its credit?
No. A member may choose not to share. It must mark the nonsharing oval and complete both Sections A and B of Part IV. Its credit is also limited to the amount that would otherwise be allowed against the group tax liability.
Can I use the credit against the Corporate Transit Fee?
No. The instructions expressly prohibit using this credit against the Corporate Transit Fee.