How to make the New Jersey PTET election.

New Jersey’s Pass-Through Business Alternative Income Tax lets your business pay state income tax for its owners and deduct it federally, outside the SALT cap. Here’s when and how to elect for 2026, and how to pay.

Can your business elect?

Partnerships, New Jersey S corporations (federal S corporations that file Form CBT-100S), and LLCs taxed as a partnership or S corporation, if at least one member is an individual, estate, or trust subject to New Jersey Gross Income Tax. Single-member LLCs and sole proprietorships cannot elect.

The entity makes the election and computes tax on every member's share of distributive proceeds, including tax-exempt and corporate members. Since 2022, a partnership that receives a BAIT credit from a lower-tier entity can use it on its own PTE-100 or NJ-1065 or allocate it to its individual, estate, and trust partners. Entities under more than 50% common ownership may file one consolidated PTE-100 through a designated entity.

Rate: Graduated rates on the sum of members' distributive proceeds: 5.675% on the first $250,000, 6.52% from $250,000 to $1,000,000, and 10.9% over $1,000,000.

For partnerships, the full distributive share of resident individual, estate, and trust members plus the New Jersey-source share of all other members. For S corporations, only New Jersey-source income of each shareholder.

Available for 2026. The Pass-Through Business Alternative Income Tax was enacted by P.L.2019, c.320 and expanded by P.L.2021, c.419 for tax years beginning in 2022, and the Division has published the 2026 Form PTE-100 instructions. New to PTET? See how the election works.

Deadlines

Step	Due for 2026
Make the election	Before the first payment, and no later than March 15, 2027
1st estimated payment	April 15, 2026
2nd estimated payment	June 15, 2026
3rd estimated payment	September 15, 2026
4th estimated payment	January 15, 2027
Return and balance due	March 15, 2027
Extended return	September 15, 2027

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: The election must be filed electronically each year by the original due date of Form PTE-100 (March 15, 2027 for calendar year 2026) and before any payment, including estimated payments, is made.

Register the business with the Division of Revenue and Enterprise Services if it is not already registered. The PTE system does not accept elections, returns, or payments from unregistered entities.
Log in to the PTE Filing and Payment System with the business's 12-digit ID number (generally the FEIN followed by 000) and either the account password or the business name.
File the PTE Election Form for tax year 2026. Elections do not carry forward, so a new one is filed each year.
Submit the election before making any 2026 payment, including the first estimated payment, and no later than March 15, 2027.
Keep the confirmation number printed at the top of the last page, which says the election form has been successfully submitted.

Paying the tax, step by step

Estimated payments on Form PTE-150 are required if BAIT liability exceeds $400, due April 15, June 15, and September 15, 2026, and January 15, 2027 (a weekend due date moves to the next business day). Underpayments are charged interest, computed on Schedule PTE-160. An entity is not penalized for missed estimates in the first year it elects.

What you need

Nothing to set up. NJ PTE Filing and Payment System takes payments without an account.
The business's 12-digit ID number (generally the FEIN followed by 000).
The PTE system password, or the business name as registered.
Registration with the Division of Revenue and Enterprise Services.

Start at NJ PTE Filing and Payment System, New Jersey's official site.

Confirm the 2026 PTE Election Form has been filed. The system does not accept payments before the election.
Log in to the PTE Filing and Payment System with the 12-digit ID number and the password or the business name.
Make each quarterly estimated payment using Form PTE-150 in the system.
Pay any balance when filing Form PTE-100, or pay at least 80% of the tax with Form PTE-200-T by March 15, 2027 to get the six-month filing extension.
All BAIT forms and payments are filed electronically. Paper forms mailed to the Division are not accepted.

Filing the return: Form PTE-100 with a Schedule PTE-K-1 for every member, filed electronically by March 15, 2027. Form PTE-200-T gives a six-month extension to file, but at least 80% of the tax must be paid by March 15, 2027.

Keep the BAIT separate from your personal estimates. The business pays the BAIT from its own account under its own ID. Once it does, each owner's personal New Jersey estimates can usually drop by the credit they expect, so the same tax is not paid twice.

Claiming the credit

Members claim a refundable credit for their share of BAIT, reported on Schedule PTE-K-1, on Form NJ-1040, NJ-1040NR, NJ-1041, or the Corporation Business Tax return. New Jersey residents may also claim a credit for substantially similar entity-level taxes paid to other states.

Good to know

BAIT estimated payments are separate from Form NJ-1040-ES payments and cannot be moved to another tax account. Members may still need their own estimates for income BAIT does not cover.
In the first year an entity elects, it can pay the full year's BAIT by March 15 and members are credited as if it had been paid evenly through the year.
Since 2022 (P.L.2021, c.419), a partnership's resident members are taxed on all of their distributive proceeds, the credit is refundable for C corporation and S corporation members, and tiered entities can pass the credit through.
The FAQ says BAIT is added back to income on Form NJ-1065 (line 13a) or Form CBT-100S (Schedule K, line 4b).
Electing does not prevent filing a composite return (Form NJ-1080-C), but composite overpayments cannot be transferred to the BAIT account. A BAIT overpayment carries forward to 2027 only if the entity makes a 2027 election; otherwise it is refunded.
Paying your personal New Jersey estimates? See how to pay New Jersey estimated taxes.
Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the New Jersey Division of Taxation's own publications and N.J.S.A. 54A:12-1 et seq. (P.L.2019, c.320, as amended by P.L.2021, c.419).

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.