If you think that your inheritance is tax free in New Jersey, think again. The revised New Jersey Transfer Inheritance Tax Act of 1985 provides for the following 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% tax for bequests in excess of $25,000 and up to $1,100,000; 13% tax for bequests in excess of $1,100,00 and up to $1,400,000; 14% tax for bequests in excess of $1,400,000 and up to $1,700,000; and 16% 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% 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.
Disclaimer: This article is provided as a courtesy by the law firm of Shapiro Croland Reiser Apfel & Di Iorio LLP. It is not intended to create an attorney-client relationship between any user of this website and Shapiro Croland Reiser Apfel & Di Iorio LLP. Further, laws are frequently updated and modified by the New Jersey legislature. Shapiro Croland Reiser Apfel & Di Iorio LLP makes no representation as to the accuracy of any law cited or quoted on this website.