New Jersey Real Estate Broker’s Commissions Are Taxable Wages

A licensed New Jersey real estate broker who also served as an officer and part-owner of his firm must treat sales commissions as taxable wages, the New Jersey Tax Court has held.

Judge Joshua T. Nugent rejected Michael Monihan’s claim that a decades-old independent contractor agreement allowed him to report that income as business profits.

The opinion affirmed the state Division of Taxation’s reclassification of commissions earned by Monihan from 2016 through 2018, finding he was an employee of his S corporation under state tax regulations and therefore required to report all remuneration as wages.

The case focused on a ...