NJ-1041SB: Fiduciary Income Tax Return—Electing Small Business Trust (2024)
New Jersey · NJ Division of Taxation · Used for tax years 2024
Form NJ-1041SB is the 2024 New Jersey fiduciary income tax return for an Electing Small Business Trust. It reports S corporation income and applicable non-S corporation income, calculates tax, payments, and credits, and determines any balance due or refund. It also includes the t
Who files this form
A federal Electing Small Business Trust (ESBT) uses Form NJ-1041SB to elect to be taxed as a New Jersey ESBT. The trust makes the election by filing the return and signing the election statement.
Part I reports the S corporation portion of income. Part II applies as follows:
- Resident trusts: Complete Part II if the trust has non S corporation income.
- Nonresident trusts: Complete Part II and Part II, Schedule G if the trust has non S corporation income from New Jersey sources, whether or not that income was distributed.
What you'll need
Have the trust’s federal employer identification number, residency status, and the fiduciary’s name, title, and address ready.
Depending on the income and credits reported, you may also need:
- S corporation schedules: Attach Schedule(s) NJ-K-1. If the trust has S corporation income earned outside New Jersey from a hybrid corporation, or did not receive NJ-K-1s, complete Reconciliation Worksheet B or Worksheet B – Liquidated to determine reportable income.
- Business and rental schedules: Enclose federal Schedule C or F for Part II, Schedule A, and federal Schedule E for Part II, Schedule C. Part II, Schedule B uses property-sale information reported on federal Schedule D.
- Partnership and credit schedules: Include the applicable NJK-1, NJ-K-1, and PTE-K-1 schedules supporting partnership income, tax paid by partnerships, or credits claimed.
- Beneficiary information: Prepare a Schedule NJK-1 for each beneficiary using Part II, Schedule D, and include it with the return.
- Business allocation: Enclose Form NJ-NR-A when allocating business income to New Jersey.
- Taxes paid to other jurisdictions: Include all credit calculations with the return. Keep a copy of the other jurisdiction’s tax return in your records.
- Payment by mail: Include a completed Form NJ-1041-V with the check or money order.
How to file
Complete Part I and any applicable Part II lines and schedules. Include the required supporting schedules and credit calculations.
The return must be signed and dated by the individual fiduciary or an authorized officer who manages the trust’s income and has authority to make the election. Signing the election statement makes the New Jersey ESBT election for tax year 2024.
If you owe tax: Pay the amount on line 40 in full. For payment by mail, enclose a check or money order and completed Form NJ-1041-V. Make the payment payable to State of New Jersey–TGI and write the trust’s federal ID number on it. Mail to:
State of New Jersey–TGI
Division of Taxation
Revenue Processing Center
PO Box 648
Trenton, NJ 08646-0648
The form also allows payment online at nj.gov/taxation. The supplied text does not provide e-file instructions.
Common mistakes
- Entering losses where zero is required: Enter zero for a net loss on Part I, lines 1 and 4, and for any net-loss category in Part II. Nonresident trusts must also enter zero for a net loss on Part I, line 2.
- Offsetting different income categories: Part II, Schedule G warns that a net loss in one category cannot offset income in another.
- Completing line 3 as a nonresident trust: Nonresident trusts must make no entry on Part I, line 3.
- Deducting S corporation distributions or commissions in Part II: Do not include Part I S corporation distributions on line 19 or commissions related to that income on line 21.
- Combining credits for different jurisdictions: Calculate each jurisdiction’s credit separately, and keep S corporation and non S corporation credit calculations separate. Do not combine the same income taxed by more than one jurisdiction.
- Deducting interest on debt used to buy S corporation stock: The instructions state that this interest is not deductible by a shareholder for Gross Income Tax purposes.
- Overlooking the line 17 reminder: If gross income on line 17 is $10,000 or less, see the NJ-1041 instructions.
Questions people ask
What tax rate applies to the S corporation portion for 2024?
Multiply the taxable S corporation income on line 5 by .1075, or 10.75%, and enter the result on line 6.
Can the trust claim deductions against its S corporation income?
For the S corporation portion, the ESBT gives up the minimum taxable income threshold, exemption, deductions for distributions and income commissions, and the Alternative Business Calculation Adjustment. The Alternative Business Calculation Adjustment is not available to an ESBT for its non S corporation portion either.
Can the trust claim a credit for taxes paid to another jurisdiction?
A resident trust may qualify when the specified income is taxed by both New Jersey and another jurisdiction. Use Part I, Schedule E for S corporation income and Part II, Schedule E for non S corporation income, with a separate calculation for each jurisdiction. No credit is allowed for another jurisdiction’s tax on S corporation source income allocated to New Jersey based on the corporation’s New Jersey allocation factor.
Can a 2024 overpayment be applied to 2025 tax?
Yes. Enter the amount of the line 41 overpayment you want to apply to 2025 on line 42. Subtract line 42 from line 41 to calculate the refund on line 43.