State Inheritance Tax
The revised New Jersey Transfer Inheritance Tax Act of 1985 provides for four classifications of beneficiaries.
- Class A – Spouses, children, step-children, grandchildren, parents, and grandparents are not subject to state inheritance tax.
- Class B – This class was eliminated in a 1963 revision of the inheritance tax law.
- Class C – Brothers, sisters, daughters-in-law, and sons-in-law are exempt from inheritance tax for the first $25,000. They are subject to 11 percent tax for bequests in excess of $25,000 and up to $1,100,000; 13 percent tax for bequests in excess of $1,100,00 and up to $1,400,000; 14 percent tax for bequests in excess of $1,400,000 and up to $1,700,000; and 16 percent tax for bequests in excess of $1,700,000.
- Class D – All other individuals that do not fall into Class A or C are exempt from tax if the total amount of the bequest does not exceed $499. These individuals are subject to 15 percent tax on all bequests over $499 and up to $700,000, and 16% tax on bequests in excess of $700,000.
- Class E – Charitable or non-profit entities are exempt from inheritance tax.
Further information concerning state inheritance tax may be obtained by contacting the New Jersey Transfer Inheritance and Estate Tax Division.
NJ Estate Tax
Current law states there will be no NJ Estate Tax on or after 2018.
Federal Estate Tax
For transfers from spouse to spouse, there is no federal estate tax. For all others, the estate tax exemption is approximately $11.2 million and adjusted for inflation. If you anticipate having any tax issues or need assistance with taxes related to an estate, you should consult with a tax professional.