Resources

Articles & Tips

New Jersey Contractor withholding requirements  and  Business Registration Certificates

Effective January 1, 2007, the State of New Jersey now requires entitities making payments to unregistered unincorporated contractors for work performed in New Jersey to deduct and withhold tax from that compensation for any contractor who does not provide proof of a registration (a Business Registration Certificate, Form BRC) with the New Jersey Division of Revenue.  The required amount to be withheld is 7%.

In order to facilitate this new requirement, the state has created Form NJ-550 to report the unregistered contractor's name, social security number or federal employer identification number, gross amount paid and amount withheld.  Filing and payment of the amount withheld is required for each calendar month.  The NJ-550 and associated payment are due on or before the 15th day of the month following the close of the calendar month in which the payment was made.

A Business Registration Certificate serves two purposes:

• For public contracting. All contractors and subcontractors must provide this documentation when seeking to do business with the State of New Jersey, and other public agencies in this state.
   
• To comply with Chapter 85, P.L. 2006, defined under N.J.S.A. 54A:7-1.2. You must use the Business Registration Certificate if you are an unincorporated construction contractor performing work in NJ or you are a registered unincorporated contractor providing proof of certification.

If you are a registered vendor but have not received the Business Registration Certificate in the mail, you may obtain a certificate online at: http://www1.state.nj.us/TYTR_BRC/jsp/BRCLoginJsp.jsp

To determine if the business is already registered, you may check the online registration inquiry at:  https://www1.state.nj.us/TYTR_BRC/jsp/BRCLoginJsp.jsp

If you have not registered but are required to have this certificate, you will need to complete Form NJ-REG. Representatives of the Division's Client Registration activity are available to assist in the registration process by calling 609.292.1730.