332: Tiered Subsidiary Dividend Pyramid Tax Credit (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
New Jersey Form 332 calculates the Tiered Subsidiary Dividend Pyramid Tax Credit for Corporation Business Tax. It reports subsidiary dividends, the subsidiary’s tax information, and the allowable credit for the current tax period.
Who files this form
Form 332 is for taxpayers calculating New Jersey’s Tiered Subsidiary Dividend Pyramid Tax Credit. It covers qualifying dividends received from a subsidiary that received those dividends from other subsidiaries, included them in its New Jersey taxable income, and paid New Jersey Corporation Business Tax on them on a timely filed return.
- The taxpayer must own 50% or more of the subsidiary’s voting stock and all other classes of stock.
- For this credit, tax paid includes tax the subsidiary would have paid without tax credits, prior year net operating losses, or net operating losses.
- For a combined group, the managerial member completes the form. The group is treated as one taxpayer and cannot claim this credit for taxes paid by another member of the same group.
Include Form 332 in the year the credit was earned, even if you are not claiming the credit on your return.
What you'll need
Have the following information available to complete Form 332:
- Your name as shown on the return, federal ID number, and unitary ID number, if applicable.
- Each qualifying subsidiary’s name and federal ID number. Combined groups also provide the relevant member’s name and federal ID number.
- Dividends received from each subsidiary and the amount not excluded by the dividend exclusion.
- Each subsidiary’s tax rate, New Jersey allocation factor, and tax paid or treated as paid on the qualifying dividends.
- Your tax liability from Form CBT-100, CBT-100S, or CBT-100U, and other tax credits used on the current year’s return.
A completed Form 332 must be included with the CBT-100, CBT-100S, or CBT-100U return to validate the claim.
How to file
Include the completed Form 332 with your CBT-100, CBT-100S, or CBT-100U return. The supplied text does not give a mailing address or e-filing instructions.
- Enter your identifying information and select combined-group or separate-return filing status. The managerial member completes the form for a combined group. Separate return filers skip Part I, column 1, and begin with column 2.
- Complete Part I for qualifying subsidiary dividends. For each entry, multiply column 3b by columns 4a and 4b to calculate column 5. Enter the total of column 5 on line 1.
- In Part II, line 2, enter tax liability from page 1, line 2a of CBT-100 or CBT-100S, or Schedule A, Section II, Part III, line 4a, column (c) of CBT-100U.
- Enter other tax credits used on line 3. Subtract line 3 from line 2 and enter the result on line 4. If the result is zero or less, enter zero.
- Enter the smaller of line 1 or line 4 on line 5 and on Schedule A-3, Part I of your CBT-100, CBT-100S, or CBT-100U.
Common mistakes
- Leaving out Form 332. Include it with the return to validate the claim. The instructions also require the credit form in the year the credit was earned, even if you are not claiming the credit.
- Including ineligible dividends. Do not include dividends from a subsidiary that has not filed and paid New Jersey tax on them, subject to the form’s definition of tax paid.
- Claiming credit for dividends already eliminated on a combined return. Dividends and deemed dividends already eliminated in column (b) of Part I or Part II of Schedule A do not qualify.
- Completing the wrong columns. Separate return filers must skip Part I, column 1.
- Using the credit beyond its limits. It cannot reduce liability below zero, be refunded, be carried forward, or be used against the Corporate Transit Fee.
Questions people ask
Does Form 332 replace another schedule?
Yes. Form 332 replaces Schedule RT, Allocated Tiered Subsidiary Dividend Exclusion.
What are tiered dividends?
They are dividends reported as dividend income on a subsidiary’s CBT-100, CBT-100U, or CBT-100S and then issued to the parent company as a dividend.
Can the credit reduce the minimum tax?
Yes. It may be applied against the minimum tax and can reduce the taxpayer’s liability to zero, but not below zero. It cannot be used against the Corporate Transit Fee.
What happens to credit I cannot use?
The credit is not refundable, and unused credit cannot be carried forward.
Can a combined group claim credit for tax paid by a subsidiary outside the group?
Yes, if the qualifying subsidiary filed a New Jersey Corporation Business Tax return and paid tax on dividends or deemed dividends received from other subsidiaries and included in its entire net income. The subsidiary may file separately or as part of another combined group filing a separate New Jersey combined return.