NJ-1041SB: Fiduciary Income Tax Return Electing Small Business Trust and Instructions (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
Form NJ-1041SB is the 2025 New Jersey fiduciary income tax return for an Electing Small Business Trust. It reports S corporation income and, when applicable, non-S corporation income, along with deductions, credits, payments, and tax due or refund. It also includes the trust’s co
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. For non S corporation income:
- A resident trust must complete Part II if it has non S corporation income.
- A nonresident trust must complete Part II and Part II, Schedule G, if it has non S corporation income from New Jersey sources, whether or not that income is 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 trust’s income and credits, gather these records and attachments:
- S corporation income: 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 from GIT-9S.
- Business and rental income: Enclose federal Schedule C or F for Part II, Schedule A, and federal Schedule E for Part II, Schedule C. Use federal Schedule D information for property dispositions in Part II, Schedule B.
- Beneficiary distributions: Prepare a Schedule NJK-1 for each beneficiary using Part II, Schedule D, and include the schedules with the return.
- Partnership payments and pass-through tax credits: Include the applicable Schedules NJK-1, NJ-K-1, and PTE-K-1 supporting the amounts claimed.
- Credits for taxes paid to other jurisdictions: Include all credit calculations. Keep copies of the other state or political subdivision tax returns with your records.
- Business income allocation: Enclose Form NJ-NR-A when applicable.
- Payment by mail: Include a completed Form NJ-1041-V payment voucher with the check or money order.
How to file
Complete Form NJ-1041SB and the applicable schedules. The return must be signed and dated by the individual fiduciary or an authorized officer who manages or controls the trust’s income and has authority to make the election.
If tax is due on line 40, pay it in full. For payment by mail:
- Make the check or money order payable to State of New Jersey–TGI.
- Write the trust’s federal ID number on the check or money order.
- Enclose the payment and a completed Form NJ-1041-V payment voucher.
- 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 through nj.gov/taxation.
Common mistakes
- Using losses where zero is required. Enter zero for a net loss on Part I, lines 1 and 4. Nonresident trusts must also enter zero for a net loss on Part I, line 2. In Part II, enter zero for any income category with a net loss. Schedule G warns that a loss in one category cannot offset income in another.
- Reporting stock dispositions as a nonresident trust. Nonresident trusts must leave Part I, line 3, blank.
- Including S corporation deductions in Part II. Do not include distributions of Part I S corporation income on line 19 or commissions related to that income on line 21.
- 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.
- Combining credit calculations. Calculate credits separately for each jurisdiction and for the S corporation and non S corporation portions of income. Do not combine the same income taxed by more than one jurisdiction on Schedule E, line 55.
Questions people ask
What tax rate applies to the S corporation portion of income?
For 2025, multiply Part I, line 5, by .1075, or 10.75%, to calculate the tax on line 6.
Can the trust claim deductions against its S corporation income?
For the S corporation portion, the ESBT waives the minimum taxable income threshold, the exemption, deductions for distributions and income commissions, and the Alternative Business Calculation Adjustment. The adjustment is not available to an ESBT for the non S corporation portion either.
Can a resident trust claim a credit for taxes paid to another jurisdiction?
A resident trust may qualify when income is taxed by both New Jersey and another jurisdiction. Use separate Schedule E calculations for each jurisdiction and each income portion. No credit is allowed for another jurisdiction’s tax on S corporation income or gains from the corporation’s asset dispositions allocated to New Jersey using the corporation’s New Jersey allocation factor.
What can the trust do with an overpayment?
Enter on line 42 the amount of the 2025 overpayment to apply to 2026 tax. Subtract that amount from line 41 and enter the remaining refund on line 43.