What is the nexus in NJ for payroll?

Criteria for Establishing Payroll Tax Nexus in New Jersey

To establish payroll tax nexus in New Jersey, an employer must meet certain criteria as outlined in the New Jersey Statutes. The following points summarize the key criteria:

1. Employer Presence in New Jersey:

- An employer must have a physical presence in the state, such as maintaining an office or transacting business within New Jersey.

2. Payment of Salaries, Wages, or Remuneration:

- The employer must be making payments of salaries, wages, or remuneration that are subject to New Jersey gross income tax. This includes payments that are also subject to contributions under the New Jersey unemployment compensation law.

3. Withholding Requirements:

- Employers are required to deduct and withhold tax from wages, salaries, or commissions derived from sources within New Jersey. The withholding amount should be computed to result in a sum substantially equivalent to the estimated tax due under New Jersey law.

4. Regulatory Compliance:

- Employers must follow methods and procedures prescribed by regulation for determining the amount to be withheld, furnishing written exemption certificates, and providing written statements showing compensation and withheld amounts.

5. Information Sharing for Verification:

- Employers may be required to furnish wage and tax withholding information for the purpose of verifying payroll information, especially if they are subject to local employer payroll taxes.

6. Collaboration with State Departments:

- The director may furnish information to the Commissioner of Labor and Workforce Development for labor market research or investigations related to state wage, benefit, or tax laws.

By meeting these criteria, an employer establishes payroll tax nexus in New Jersey and becomes responsible for complying with the state's tax withholding and reporting requirements.

‍

Sources:

Missouri Revised Statutes Title X. Taxation and Revenue § 143.201. Information statement for employee 2023-01-01

North Carolina General Statutes Chapter 105. Taxation § 105-163.7. Statement to employees; information to Secretary 2023-01-01

North Carolina General Statutes Chapter 105. Taxation § 105-163.6A. Federal determinations 2023-01-01

New Jersey Statutes Title 54. Taxation 54 § 8A-17 2021-02-19

New Jersey Statutes Title 54A. New Jersey Gross Income Tax Act 54A § 2-1 2021-02-19

New Jersey Statutes Title 54. Taxation 54 § 50-9 2021-02-19