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What are the New Jersey income tax responsibilities of nonresident shareholders of a NewJersey S corporation?Nonresident taxpayers will report their pro rata share of S corporation income allocated to New Jersey of the New Jersey S corporation, pursuant to N.J.S.A. 54A:5-8(6).See here - page 2 http://www.state.nj.us/treasury/taxation/pdf/pubs/corp/git9s.pdfPayment of Tax by Nonresident Shareholders Estimated Tax Payments An S corporation is not required to withhold income tax from a nonresident shareholder’s pro rata share of S corporation income. You should consider making estimated income tax payments to cover the amount of your taxable S corporation income.Nonconsenting Shareholders If you are a nonresident of New Jersey and become a shareholder in an S corporation that has made the election to be treated as a New Jersey S corporation and you have failed to consent to that election, the S corporation is required to withhold income tax from your pro rata share of S corporation income. Payments made by the S corporation on your behalf are reported to you on Schedule NJ‑K‑1, Form CBT‑100S and must be included as New Jersey estimated tax payments on your Form NJ‑1040NR. To receive credit, you must enclose a copy of your Schedule NJ-K-1(s) with your nonresident income tax return.
Yes - rules for partnerships are different.
For S-corporation withholding is required only for shareholders who failed to consent to that election.