New Jersey Employer Payroll — NJ-927, W-2, TDI/FLI & BAIT Coordination

Register the business with the NJ Division of Taxation (for GIT withholding) and NJDOL (for UI/TDI/FLI). Obtain the NJ Employer Registration Number and UI/TDI account numbers. Confirm the entity type — if a pass-through, flag the BAIT election opportunity at this stage so owners can make an informed decision before the March 15 deadline.

Collect NJ-W4 from every new hire — this is separate from the federal W-4 and required independently. Apply NJ default withholding rules (single, zero allowances, Table A) for any employee who fails to submit an NJ-W4. Document NJ-specific wage exclusions: 401(k) deferrals are NOT excluded from NJ taxable wages (Box 16 will exceed Box 1); HSA employer contributions are also not excluded at the NJ level. For any worker paid as a 1099 contractor, run the ABC test (N.J.S.A. 43:21-19(i)(6)) and document findings.

Configure payroll software with 2025 NJ contribution rates. Employee withholding uses the graduated GIT brackets (1.4% through 10.75%). TDI employee rate is 0.23% on wages up to $165,400 (max $380.42); FLI employee rate is 0.06% on wages up to $165,400 (max $99.24). UI employee rate is 0.3825% on the first $43,300 (max $165.62). Employer TDI is 0.93% on first $43,300; employer UI is 2.8% (new employer) or experience-rated on first $43,300. For supplemental wages (bonuses, commissions), withhold at the marginal GIT bracket rate for employees below $1M YTD, or at the flat 11.8% supplemental rate for high earners.

File Form NJ-927 (or NJ-927-W for weekly remitters) quarterly. NJ-927 is a combined return that reports GIT withholding, UI, TDI, FLI, WF, and SWF in a single filing — no separate state equivalent to Form 940. Due dates: Q1 April 30, Q2 July 30, Q3 October 30, Q4 February 2 (2026). Monthly remitters also file NJ-500 by the 15th of the following month. Weekly remitters use EFT. Also file the WR-30 wage-and-contribution report each quarter listing each employee's wages and contributions — late WR-30 carries a $5 per employee penalty (up to $25,000 per quarter).

For any NJ-registered employer with employees who live in NJ but work in NY, or who live in NY but work in NJ, determine the correct withholding split. NJ has no reciprocity with NY, so both states may withhold; the employee claims a credit on the resident return. NJ does have reciprocity with PA under the 1977 agreement: PA residents working in NJ file Form NJ-165 to claim exemption from NJ GIT withholding, and NJ residents working in PA file REV-419 to claim PA exemption. Flag the NY 'convenience of employer' rule for any NJ employer with NY-based operations: remote workdays from NJ for a NY-convenience employer count as NY-source days.

Prepare W-2s with correct NJ-specific amounts: Box 16 (NJ wages) will exceed Box 1 for employees with 401(k) deferrals or employer HSA contributions, which are excluded federally but not by NJ. Box 14 must show employee UI/WF/SWF contributions labeled 'UI/WF/SWF'. File Copy 1 W-2s with NJ via the NJ-W-3 Annual Reconciliation by February 15 (earlier than the January 31 federal SSA deadline). Submit W-2 data electronically in MMRRF format. For 1099-NEC filers, report to NJ by January 31 via the Combined Federal/State Filing (CF/SF) program or MMRRF direct upload.

For pass-through entities (partnerships, S-corps, multi-member LLCs) that elected BAIT for 2025, file Form PTE-100 by March 15, 2026. Compute the BAIT base: 100% of each NJ-resident member's distributive share (including guaranteed payments) plus the NJ-apportioned share for non-resident members. Apply graduated brackets (5.675% to 10.9%) to the aggregate base — brackets apply at the entity level, not per member. Ensure quarterly PTE-150 estimates were paid by April 15, June 16, September 15, and January 15. Issue Schedule PTE-K1 to each member showing their share of BAIT paid for use on the NJ-1040 refundable credit. Note: BAIT is entirely separate from NJ-927 and has no interaction with payroll withholding.