TIN ComplianceA resource from TIN Comply
Backup withholding
No
Nonresident payments
Yes, 7%
Forms
NJ-550
State withholding

New Jersey backup withholding and nonresident contractor withholding

New Jersey’s rule turns on registration rather than residency. N.J.S.A. 54A:7-1.2 requires a person doing business in New Jersey that pays an unincorporated contractor, resident or nonresident, for construction services in the state to obtain the contractor’s New Jersey Business Registration Certificate or withhold 7 percent of the payment. Non-employer payers remit on Form NJ-550 monthly and reconcile on Schedule NJ-W-3-UNC; the 1099-MISC shows the withholding. Work for government agencies and for homeowners on their own residence is excluded. NJ-WT lists no backup withholding rule.

State backup withholding not requiredNonresident non-wage withholding requiredSources checked November 1, 2026Updated November 1, 2026
In this guide
  1. Status
  2. Withholding on non-wage payments to nonresidents
  3. What New Jersey does not require
  4. Pass-through entity withholding
  5. From the source
  6. What to confirm
  7. Sources

Status

State backup withholdingNot required (inferred)

Inferred: no provision found in the saved statute or guide

Non-wage payments to nonresidentsRequired

Primary source (statute, regulation or agency publication saved in full); NJ-WT and Form NJ-550; statute text taken from the 2006 bill as introduced (S468), not the codified section

Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in New Jersey exactly as everywhere else; this page covers only what the state adds. The 50-state tables put New Jersey next to its neighbours, and the New Jersey 1099 filing page covers whether the state wants its own copy of the 1099.

Withholding on non-wage payments to nonresidents

Applies to
Registration-based, not residency-based: persons maintaining an office or transacting business in NJ paying resident or nonresident unincorporated contractors (individuals, partnerships, LLCs not taxed as corporations) for construction services (capital improvements or repairs) in NJ must withhold unless the contractor provides a NJ Business Registration Certificate (BRC). No general rule for nonresident contractors, entertainers or athletes.
Threshold
None
Rate
7% of the amount paid for services
Statute
N.J.S.A. 54A:7-1.2 (P.L. 2006, c. 85, effective January 1, 2007); NJ-WT
Withholding return
Form NJ-550 (Monthly Return of Withholding from Unregistered Unincorporated Contractors) for non-employers, due 15th of following month; registered employers report on NJ-927/NJ-927-W; Schedule NJ-W-3-UNC annual reconciliation (electronic)
Exemption certificate or waiver
Copy of the contractor's NJ Business Registration Certificate (BRC), retained by the payer
Payee statement
Federal Form 1099-MISC showing NJ withholding; annual statement to the contractor by February 15 per statute
Due dates
NJ-550 and payment by the 15th day of the month following the payment month; NJ-W-3-UNC with 1099-MISC copies annually (electronic)
Exceptions
Contractors working for government agencies; work for homeowners or tenants on their principal residence; incorporated contractors; contractors providing a BRC; payments already subject to wage withholding

What New Jersey does not require

State backup withholding

No state backup withholding: N.J.S.A. 54A:7-1 covers wages and gambling winnings; NJ-WT lists no backup-withholding rule

Basis: Inferred: no provision found in the saved statute or guide.

Pass-through entity withholding (out of scope)

New Jersey partnerships pay tax on behalf of nonresident partners (N.J.S.A. 54A:8-6; NJ-1065) and S corporations file for nonresident shareholders. Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.

From the source

“obtain proof of the contractor’s New Jersey registration or withhold 7% of the amount paid for services”

New Jersey Division of Taxation, NJ-WT (September 2025), read November 1, 2026

What to confirm

  • The statute text was read from the 2006 bill as introduced (S468), not the codified section; NJ-WT and Form NJ-550 confirm the rule as enacted.

Sources

Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.

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