N.J. Admin. Code § 18:7-13.8

Current through Register Vol. 56, No. 24, December 18, 2024

Section 18:7-13.8 - Claims for refund; when allowed

(a) The four-year statute of limitations period for filing a claim for refund commences to run from the later of the payment of tax for the taxable year or from the filing of the final return for the taxable year. The due date of the return is deemed the payment date if filing and payment are made prior to the due date. For purposes of this section, the term "due date" means the original due date of the return. The term does not mean or include any extended due date.

(b) The four-year period for filing a claim for refund relating to an amended return ("additional self-assessment") commences on the later of payment of the additional self-assessment or the filing of an amended return reflecting the additional self-assessment.

(c) For purposes of the application of this section only:

1. A Tentative Return and Application for Extension of Time to File a tentative New Jersey corporation business tax return and an installment voucher are not returns;

2. The taxpayer shall file the applicable New Jersey corporation business tax for the respective period; and

3. A Report of Changes in Corporate Taxable Net Income by the Internal Revenue Service (IRA-100) or a New Jersey corporation business tax return for the appropriate tax year, with the words "AMENDED RETURN" clearly indicated on the front page of the form, is an amended return.

(d) When a taxpayer files a Report of Changes in Corporate Taxable Net Income by the Internal Revenue Service pursuant to N.J.A.C. 18:7-11.8(a) that results in a diminution of entire net income for any year, the four-year period for filing a claim for refund based on that diminution for the return year at issue begins on the date that taxable income is finally changed or corrected by the Internal Revenue Service. Such claims for refund must be filed with the Division of Taxation on Form A-3730. The Division may require additional information in order to properly determine the operative date of the Internal Revenue Service change or correction.

(e) When a taxpayer files an amended return with the Internal Revenue Service (Form 1120X) and files an amended return with the State of New Jersey within 90 days pursuant to N.J.A.C. 18:7-11.8(b), the claim will be considered a timely refund claim if it is filed with the Division of Taxation within four years of the later of filing or payment of the original return self-assessment.

(f) Where the Director makes an assessment and the taxpayer properly protests the assessment pursuant to N.J.A.C. 18:7-13.2, the taxpayer may establish that it made an erroneous overpayment based upon a different issue for a period covered by the assessment. Upon audit and verification, the Director will credit the erroneous overpayment of tax to the account of the taxpayer to offset the amount of the deficiency assessment pursuant to N.J.S.A. 54:49-16. After a final determination has been issued, the taxpayer has 90 days in which to appeal to the Tax Court if it is dissatisfied with the determination. The offset procedure is not considered a refund action pursuant to N.J.S.A. 54:49-14.

(g) Where the Director assesses additional tax by way of an additional assessment or final determination and the taxpayer pays the assessment, the taxpayer may not convert an assessment proceeding into a refund action by filing a refund claim, unless the taxpayer follows the procedure prescribed in N.J.S.A. 54:49-14b and N.J.A.C. 18:2-5.5(c)1.

(h) If a taxpayer believes that it is entitled to relief pursuant to N.J.S.A. 54:10A-8, and it believes that a remedy based upon the rationale explicitly addressed by N.J.A.C. 18:7-8.3(b) is not adequate, such relief request is deemed a refund claim. The taxpayer is required to file its return and pay its tax in accordance with the Corporation Business Tax Act, plainly noting on the filed returns its claim for "Section 8 relief" and supplying supporting materials in accordance with N.J.A.C. 18:7-10.1. In addition, a claim for refund must accompany the return as filed. This application constitutes a refund claim and is subject in any event to the same period of limitations as any other claim for refund.

(i) To claim a refund and amend the applicable New Jersey corporation business tax returns, the applicable return for the appropriate tax year shall be used. The words "AMENDED RETURN" shall be clearly indicated on the front page of the New Jersey corporation business tax return, and it shall be submitted electronically except in the case of the BFC-1, which is mailed to:

Corporation Business Tax Refund Section

3 John Fitch Way

PO Box 259

Trenton, NJ 08695-0259.

The following examples apply to claims accruing on and after July 1, 1993:

Example 1: Taxpayer is delinquent in filing its final return. However, the installment payments of estimated tax were sufficient to pay the tax appearing on the return. If taxpayer subsequently learns that the amount shown on the delinquent final return as filed was in excess of its true liability, a claim for refund of such overpayment is considered timely if filed within four years of the filing of the delinquent corporation business tax return. A penalty for late filing of the corporation business tax return may be imposed pursuant to N.J.S.A. 54:49-4.

Example 2: One year after filing a corporation business tax return and paying the tax liability shown thereon, a taxpayer discovers an error in its payroll figures and thereupon files a Form 1120X with the Internal Revenue Service reflecting a larger expense deduction. Within 90 days of filing the Form 1120X, taxpayer files an amended tax return claiming a refund for an overpayment of tax. Upon audit and verification the refund will be granted. Any taxpayer filing an amended return with the Internal Revenue Service must file an amended return with New Jersey within 90 days, see N.J.S.A. 54:10A-13. The periods of limitation to make deficiency assessments pursuant to N.J.S.A. 54:49-6 and to file claims for refund pursuant to N.J.S.A. 54:49-14 shall commence to run for additional four-year periods from the date that taxable income is finally changed or corrected by the Commissioner of Internal Revenue; provided, that the additional periods of limitation shall only be applicable to the increase or decrease in tax attributable to the adjustments in such changed or corrected taxable income.

Example 3: Taxpayer receives an additional tax assessment with which it disagrees. Taxpayer does not contest the assessment with the Division or in the Tax Court within 90 days. Taxpayer pays the assessment within one year after the end of the 90-day protest period and 90-day appeal period and subsequently discovers that the identical issue upon which the assessment was based was decided in favor of another taxpayer and adversely to the State. Taxpayer files a claim for refund within four years of having made its payment of the assessment but beyond 450 days after the 90-day protest period expires. Since the taxpayer did not contest its assessment in a timely fashion in accordance with N.J.S.A. 54:49-14a or follow the refund procedure established by N.J.S.A. 54:49-14b and N.J.A.C. 18:2-5.5(c)1, the claim must be rejected.

Example 4: Taxpayer did not contest an estimated tax assessment (N.J.S.A. 54:49-5). More than four years after having paid it, the taxpayer concludes that it was erroneous. Subsequently, the taxpayer files a Report of Changes in Corporate Taxable Net Income by the Internal Revenue Service (IRA-100) or a corporation business tax return marked "AMENDED RETURN" relating to the same tax year and upon which additional tax is due. Taxpayer may no longer claim a refund of any portion of the tax paid on the estimated tax assessment, nor have such funds applied to the self-assessment arising out of changes by the Internal Revenue Service to its income for that year.

N.J. Admin. Code § 18:7-13.8

Amended by 49 N.J.R. 1694(a), effective 6/19/2017

Amended by 54 N.J.R. 1819(a), effective 9/19/2022