Schedule B: Sheltered Workshop Tax Credit (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
New Jersey Schedule B (Form NJ-1065) calculates the Sheltered Workshop Tax Credit for partnerships. It lists each qualified employee’s name, Social Security number, and wages, and calculates a credit equal to the lesser of 20% of wages or $1,000 per qualified person.
Who files this form
Schedule B is for partnerships claiming the Sheltered Workshop Tax Credit on Form NJ-1065 for tax year 2025.
To qualify, each employee for whom a credit is claimed must:
- Be a “Qualified Person” under P.L. 2005, c. 318.
- Have worked at least 26 weeks during the privilege period and at least 25 hours per week at or under the supervision of a sheltered workshop.
If either qualification question is answered “No,” the taxpayer does not qualify and must not complete the rest of the form.
What you'll need
Have the following information ready to complete Schedule B:
- The partnership name as shown on Form NJ-1065 and its federal EIN.
- Each qualified employee’s name and Social Security number.
- Salary and wages paid to each qualified employee during the tax year.
- Information needed to answer the qualification questions about each employee’s status, weeks worked, weekly hours, and sheltered workshop supervision.
If there are more employees than fit on lines 3 through 7, attach a schedule corresponding to Part II.
Common mistakes
- Do not complete the rest of Schedule B if either Part I answer is “No.” The form states that the taxpayer does not qualify in that case.
- Do not leave additional qualified employees off the calculation. If there are more names than fit in Part II, attach a schedule corresponding to Part II.
Questions people ask
How is the credit calculated for each qualified employee?
Enter the lesser of 20% of the employee’s salary and wages paid during the tax year or $1,000 in Column D.
How do I calculate the total available credit?
Add lines 3 through 7 and enter the total on line 8, Available Sheltered Workshop Tax Credit.
What information goes in Part II?
Enter each qualified employee’s name in Column A, Social Security number in Column B, salary and wages paid during the tax year in Column C, and calculated credit in Column D.
What if an employee does not meet the qualification requirements?
Part I asks whether every employee for whom a credit is claimed meets both qualification questions. If either answer is “No,” do not complete the rest of the form. The taxpayer does not qualify for the credit.
What if I need room for more employees?
Attach a schedule corresponding to Part II.