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Deductions & credits
The credit seems to be a state income tax payment made by the entity and then passed over to the individuals as a credit towards their tax liability. It is used to offset the tax on the individual return. The credit may not reduce the tax liability below the statutory minimum tax. Excess credits may be carried forward for twenty years.
You can enter the amount you are able to utilize for the credit amount and you could enter it as follows:
- Enter your K1 in the federal return under S-corps, Partnerships, and Trusts > K-1
- Once you begin your state return, you will come to the screen 'Schedule NJ-K-1 Received?' answer 'Yes'
- Continue through the NJ K-1 screens until you each 'Pass-Through Business Alternative Income Credit' entry
- Enter your BAIT amount from your K-1.
- See the images below.
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March 30, 2022
12:02 PM