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16 Jul

If You Owe Back Taxes, Take Note: New Jersey Just Passed a New Tax Amnesty Bill

New Jersey’s New Tax Amnesty Bill

Gavel

On July 1st, the State of New Jersey passed a bill that establishes a 90-day tax amnesty period for its taxpayers. This bill was introduced in March, but it went through two re-writes before the Governor approved it. As enacted, this bill will provide penalty and interest relief for taxpayers who owe back taxes to the State. Legislators have high hopes that this program will bring in lost revenue that has been deemed uncollectable or has not yet been to collections. A similar amnesty in 2014 brought the state more than $75 million, and one in 2009 brought in $725 million. The New Jersey Division of Taxation is tasked with scheduling the 90-day amnesty period, and while we don’t yet know the exact dates, the Bill requires that it end no later than January 15, 2019.

Eligibility Requirements

Any state tax liabilities related to tax returns that were originally due February 1, 2009 to September 1, 2017 will be eligible for the amnesty. To qualify for this program, a taxpayer – business, individual, trust, etc. – must do two things: (1) they must pay their back taxes owed in full and ½ of the interest that would be due as of November 1, 2018, and (2) they must file any missing returns for the periods for which they are seeking amnesty.

Relief

Taxpayers who follow all amnesty program requirements will be relieved from the following liabilities:

  • ½ of the interest that would be due as of November 1st, 2018;
  • All late payment penalties;
  • All late filing penalties;
  • All delinquency penalties;
  • All recovery fees; and,
  • Any collection costs that would have been assigned to them.

Unfortunately, criminal penalties cannot be waived, and anyone who has been notified that they are under criminal investigation is prohibited from utilizing this amnesty program.

Taxpayers who do not take advantage of the program will face an additional 5% penalty on top of the typical late filing or late payment penalties assigned to their account. This penalty will not be eligible for waiver or abatement, so if you owe back taxes to New Jersey, it is best to take advantage of the amnesty.

Our Spire Group professionals are here to help you navigate this new program, and we can contact the State on your behalf to help you comply. If you need help coming back into compliance with the state, please contact us; we’re here to help.

About the Author

Spire Group Tax Committee Spire Group Tax Committee
The Tax Committee is comprised of a group of tax professionals that oversee tax procedures, guidelines and best practices at Spire Group, PC. They are continuously reviewing new tax laws, legislation, and tax planning strategies.

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