Service boundary: Federal and NJ tax rules change regularly. This article is an educational checklist, not a reminder or account-monitoring service. Any mid-year tax work requires separately accepted written scope based on client-supplied facts, and no result is promised.
In This Article
- NJ BAIT Updates
- Federal Bonus Depreciation Under the OBBBA
- NJ Minimum-Wage Rules
- Records Supporting Reported Positions
- Current-Year Review Scope
- Related Reading
- Frequently Asked Questions
- Request a Written Scope
New Jersey's 2025-2026 tax and payroll landscape includes the NJ BAIT election and its annual deadline, the federal Section 168(k) allowance for otherwise-qualified property acquired and placed in service after January 19, 2025, and NJ minimum-wage schedules. Not every item on that list is a 2025-2026 statutory change; the BAIT rate schedule and election mechanics are existing rules under N.J.S.A. 54A:12-3. Application depends on the tax year, entity and member types, property and acquisition facts, employer and worker categories, wage coverage, and the applicable federal and NJ returns.
Tax law evolves every year. Here are selected current rules for NJ small businesses and individuals; confirm current authority before relying on any dated figure.
NJ BAIT Updates
The BAIT uses its own three-bracket schedule under N.J.S.A. 54A:12-3 (as amended by P.L. 2021 c.419) on the statutory sum of each member's share of distributive proceeds attributable to the electing pass-through entity: 5.675% on the first $250,000 of that sum, 6.52% on the portion from $250,001 through $1,000,000, and 10.9% on the portion over $1,000,000. This schedule is separate from NJ individual gross income tax brackets. An eligible partnership, NJ S corporation, or LLC classified as a partnership or S corporation for federal tax purposes must have at least one individual, estate, or trust member subject to NJ Gross Income Tax on that member's share; a single-member LLC or sole proprietorship is not eligible. The separate annual election must be filed electronically through the NJ Division of Taxation's PTE File and Pay System before any BAIT payment and no later than the original PTE-100 due date, adjusted for a weekend or legal holiday (TY2025 calendar-year: March 16, 2026; TY2026 calendar-year: March 15, 2027). It does not carry forward, cannot be made retroactively, and is not made on CBT-100S or NJ-1065. Each member's share of BAIT paid follows the current member-type and return rules; any refundable credit, partnership or entity application, refund, or following-year overpayment carryforward depends on the applicable NJ return, the member and entity types, and whether a following-year BAIT election exists.
Federal Bonus Depreciation Under the OBBBA
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, generally provides a permanent 100% federal Section 168(k) additional first-year allowance for otherwise-qualified property acquired and placed in service after January 19, 2025, unless an applicable election changes the percentage or excludes a class. Notice 2026-11 applies acquisition-date rules that include written-binding-contract and separate self-constructed-property and component rules. Otherwise-qualified property whose applicable acquisition date is on or before January 19, 2025 generally remains on the prior phase-down: 40% if placed in service in 2025, 20% in 2026, and 0% later, subject to the applicable placed-in-service deadline, election, and special rules for specified plants, long-production-period property, and certain aircraft. New Jersey does not conform to the current federal 100% allowance: Gross Income Tax filers apply GIT-DEP and the prescribed owner or entity routes, while Corporation Business Tax filers apply Schedule S and the current entity-return instructions, with separate state basis and depreciation reconciliation as applicable.
NJ Minimum-Wage Rules
For covered employees, the applicable 2025 or 2026 NJ minimum-wage schedule depends on the pay period, worker classification and coverage, employer size or seasonal status, and any farm, tipped-worker, or other category-specific rule or exemption. Wage expense follows actual hours and pay. Payroll-tax and estimated-tax computations separately depend on taxable wage bases, rates, business results, and the applicable returns; a minimum-wage change does not determine either computation by itself.
Records Supporting Reported Positions
Businesses should retain organized records that support the positions actually reported; Monaco CPA does not provide audit-defense or audit-readiness engagements.
Current-Year Review Scope
A client may separately request a written-scope review of specified current-year facts. Monaco CPA does not monitor accounts or deadlines, send reminders, or promise periodic meetings or a result.
Related Reading
Related reading: NJ BAIT Election | Quarterly Estimated Taxes in NJ | Section 179 and Bonus Depreciation in NJ | Tax preparation services
Official sources: NJ Division of Taxation BAIT guidance (opens in a new tab) | IRS Notice 2026-11 (opens in a new tab) | NJDOL 2026 minimum-wage notice (opens in a new tab) | NJ wage-and-hour laws and current schedules (opens in a new tab)
Frequently Asked Questions
What is the NJ BAIT election and has it changed for 2025?
The NJ Business Alternative Income Tax (BAIT) permits an eligible partnership, NJ S corporation, or LLC classified as a partnership or S corporation for federal tax purposes to pay tax at the entity level when it has at least one individual, estate, or trust member subject to NJ Gross Income Tax on that member's share; a single-member LLC or sole proprietorship is not eligible. The statutory 5.675% / 6.52% / 10.9% marginal schedule applies to the sum of each member's share of distributive proceeds attributable to the electing entity. A qualifying payment may produce a federal entity-level deduction outside an owner's individual SALT-cap calculation, but the actual federal benefit depends on allocation, QBI, credits, rates, and timing. The separate annual election must be made electronically through the NJ PTE File and Pay System before any BAIT payment and no later than the original PTE-100 due date; it does not carry forward, cannot be made retroactively, and is not made on CBT-100S or NJ-1065. Each member's share of BAIT paid follows the current member-type and return rules, so any refundable credit, partnership or entity application, refund, or following-year overpayment carryforward depends on the applicable NJ return, the member and entity types, and whether a following-year BAIT election exists.
Is federal bonus depreciation still phasing down?
The OBBBA generally made the 100% federal Section 168(k) allowance permanent for otherwise-qualified property acquired and placed in service after January 19, 2025. Notice 2026-11's acquisition rules, applicable elections, and the property's qualification and placed-in-service facts still control. An otherwise-qualified earlier acquisition generally remains on the prior phase-down (40% if placed in service in 2025, 20% in 2026, and 0% later), subject to special-property and election rules. NJ filers separately apply the applicable GIT-DEP, entity, member, or CBT adjustment and basis rules.
Which NJ minimum-wage schedule applies to a business?
First determine whether the worker is an employee covered by the applicable NJ rule and which current schedule applies, including any small-employer, seasonal, farm, tipped-worker, or other category-specific rule. Actual hours and pay determine wage expense. Payroll taxes and estimated taxes require separate computations using the applicable taxable wage bases, rates, business results, and return facts.
Should I schedule a mid-year tax review?
It can be requested, but it is not automatic. Any mid-year analysis must be separately accepted in writing, uses client-supplied facts, and addresses only the specified questions. Monaco CPA does not monitor accounts or deadlines, recommend entity formation, send reminders, or promise tax savings.
Request a Written Scope
Tax rules change frequently. Use the contact form to request a written scope; submitting it does not promise a call, engagement, or outcome. Greg Monaco is a NJ-licensed CPA and the firm's sole practitioner.
