MORRIS COUNTY — The New Jersey Senate has approved bipartisan legislation sponsored by Senator Joe Pennacchio aimed at protecting the independent contractor status of real estate professionals while allowing them to continue receiving commission income through limited liability companies (LLCs).
The measure, known as S-4889/A-5978, amends existing state law to clarify that real estate agents may accept commission payments through an LLC without jeopardizing their classification as independent contractors—an issue that surfaced following new registration requirements enacted last year.
According to Pennacchio, the bill is designed to ensure real estate professionals can preserve their independence while benefiting from federal tax deductions available to independent contractors.
“This bill ensures that New Jersey real estate professionals can keep their independence while taking full advantage of federal tax benefits,” Pennacchio said. “It’s a simple, common-sense fix that will protect realtors’ hard-earned money while making New Jersey a more business-friendly state.”
Industry advocates raised concerns that the prior registration changes could have unintentionally forced real estate professionals into employee status, potentially eliminating access to important federal tax advantages. The newly approved legislation addresses those concerns by clearly defining that commissions paid through an LLC do not alter a realtor’s independent contractor standing.
With Senate approval secured, the bill now advances through the legislative process as New Jersey lawmakers continue efforts to balance worker protections with flexibility for small businesses and independent professionals across the state.
