In a measure designed to generate much-needed revenue for New Jersey without increasing taxes across the board, Governor Murphy signed a bill into law on July 1, 2018 to establish what will become the seventh Tax Amnesty program in the state’s history. The Tax Amnesty program gives taxpayers who are in arrears for tax returns due between February 1, 2009 and September 1, 2017, the opportunity to pay their debt in full without incurring penalties. It simultaneously allows these taxpayers to take advantage of reduced interest rates. By participating in the Tax Amnesty program, taxpayers can benefit from relief on gross income tax and corporate business tax returns (for the 2009-2017 timeframe), as well as sales and use taxes (for December 31, 2009-June 30, 2017 tax quarters).
While no start date for the program has yet been announced by the New Jersey Division of Taxation, the Tax Amnesty program may not launch until after November 1, 2018 but already has a firm completion date of January 15, 2019. The amnesty period allows for an approximately 90-day window during which eligible taxpayers must take advantage of the offering. Those who are eligible but fail to file during the amnesty period will incur an additional 5% non-abatable penalty.
Taxpayers who apply for and are accepted into the program are obligated to file and remit both the full amount of taxes due and half of any interest owed as of November 1, 2018. These payments are nonrefundable.
Although collection costs, recovery fees, delinquency penalties, late filing penalties, and late payment penalties are among the items waived under the Tax Amnesty program, civil fraud and criminal penalties, if applicable, will not be waived. Additionally, the program does not accept any taxpayer who, at the time of payment, is under criminal investigation or charge for any state tax matter.
Untracht Early will update you when an effective date is announced by the New Jersey Division of Taxation. If you have questions about the Tax Amnesty program, please contact your Untracht Early advisor.