New JerseyA5322221st Legislature (2026-2027)HouseWALLET

Imposes temporary $1 million cap on use of net operating loss deductions under corporation business tax for certain privilege periods.

Sponsored By: Katie Brennan (Democratic), Nicholas P. Scutari (Democratic), Anthony S. Verrelli (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

New Jersey businesses get deferred loss relief

Businesses can use losses blocked by the $1 million cap for tax periods ending July 31, 2030, through July 30, 2032. This restored deduction is available up to 75% of their allocated entire net income for the period. Loss deductions left unused because of either limit get six extra tax periods, immediately after their original expiration period. Businesses also avoid interest and penalties on estimated corporation tax underpayments caused by these loss deduction limits. This protection covers installments due after December 31, 2025, and before January 1, 2027.

New Jersey businesses face loss deduction cap

The law takes effect immediately and applies to New Jersey corporation business tax periods ending July 31, 2026, or later. For periods ending July 31, 2026, through July 30, 2030, total net operating loss deductions are capped at $1 million. Public utilities are excluded, and the cap is prorated by months for periods shorter than 12 months. The cap covers carried-over losses, converted prior losses, post-allocation losses, and losses carried over within combined groups, including any combination. It does not restrict businesses from surrendering, acquiring, or applying corporation business tax benefit certificates.

Sponsors & Cosponsors

Sponsors

  • Katie Brennan

    Democratic • House

  • Nicholas P. Scutari

    Democratic • Senate

  • Anthony S. Verrelli

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 72 • No: 37

Senate vote • 6/30/2026

3RDG FINAL PASSAGE

Yes: 25 • No: 15

House vote • 6/30/2026

3RDG FINAL PASSAGE

Yes: 47 • No: 22

Actions Timeline

  1. Governor: APP

    6/30/2026Governor
  2. Approved by Governor — P.L.2026, c.21.

    6/30/2026Governor
  3. Passed Senate, PBH — (25-15)

    6/30/2026Senate
  4. Substituted for S4536 (1R)

    6/30/2026Senate
  5. Received in Senate, SWR, 2nd Reading in Senate

    6/30/2026Senate
  6. Passed Assembly — (47-22-0)

    6/30/2026House
  7. REP/ACA, 2nd Reading in Assembly

    6/28/2026House
  8. Introduced, 1st Reading in Assembly, Referred to Assembly Budget Committee

    6/23/2026House

Bill Text

  • Version PL2026

    9/17/2026

  • Version AL2026

    8/13/2026

  • 7/6/26; 1R

    7/6/2026

  • Assembly Budget (6/28/26 1R)

    6/30/2026

  • Assembly Budget Substitute (6/28/26)

    6/29/2026

  • As Introduced

    6/27/2026

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