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NJ Inheritance Tax Rates

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New Jersey has an inheritance tax which is in addition to the Federal estate tax, New Jersey estate tax, and income taxes.   Whether an inheritance tax is owed depends on the relationship of the beneficiary of the estate to the decedent and the amount of the inheritance.   The inheritance tax can apply to both probate and non-probate assets (i.e.; retirement accounts, jointly held assets, and payable on death accounts).   Even if no inheritance taxes are owed, the executor or administrator of the estate may still have to file the NJ inheritance tax form to prove that no inheritance taxes are owed.

The inheritance tax must be paid in full within eight (8) months from the date of death of the decedent to avoid additional interest for unpaid taxes.

Table:  NJ Inheritance Tax Rates

Beneficiary ClassTax Rate
Class A
  • Parent
  • Grandparent
  • Spouse
  • Civil union partner - after 02/19/2007
  • Domestic partner - after 07/10/2004
  • Child (natural and adopted)
  • Stepchild
  • Mutually acknowledged child
  • The offspring of a natural parent conceived by the artificial insemination of that parent who is a partner in a civil union couple is presumed to be the child of the non-natural partner.  See In the Matter of the Parentage of the Child of Kimberly Robinson, 383 N.J. Super. 165; 890 A.2d 1036 (Ch. Div. 2005).
  • Issue of a child or a legally adopted child (i.e.; grandchildren, great-grandchildren, etc.)
The issue of stepchildren are Class D beneficiaries, not Class A beneficiaries.

Exempt from NJ Inheritance Taxes for decedents dying on or after July 1, 1988.

The Form NJ-IT-R must be filed with sufficient evidence to prove the mutually acknowledged child relationship, even though no tax will be owed.

Class BEliminated by statute as of July 1, 1963.
Class C
  • Siblings (including half brother and half sister)
  • Spouse or surviving spouse of a child of the decedent (i.e.; son-in-law or daughter-in-law)
  • Civil union partner or surviving civil union partner of a child of the decedent (i.e.; son-in-law or daughter-in-law) - after 02/19/2007
For decedents dying on or after July 1, 1988:
  • First $25,000, no tax.
  • Next $1,075,000, 11% tax.
  • Next $300,000, 13% tax.
  • Next $300,000, 14% tax.
  • Over $1,700,000, 16% tax on amount over $1,700,000.
Class D
Every other transferee, distributee or beneficiary who is not included in Classes A, C or E.   Examples of Class D beneficiaries include:
  • Siblings of the decedent's spouse/civil union partner/domestic partner (i.e.; stepbrothers and stepsisters)
  • Spouses/civil union partners/domestic partners of stepchildren
  • Spouses/civil union partners/domestic partners of mutually acknowledged children
  • Fiancé or fiancée
  • Uncles and aunts
  • Nieces and nephews
  • Cousins
For decedent's dying on or after 03/29/1962:
  • If less than $500, no tax.  If $500 or more, no exemption.
  • Up to $700,000, 15% tax.
  • Over $700,000, 16% tax on amount over $700,000.
Class E
The State of New Jersey or any political subdivision thereof, or any educational institution, church, hospital, orphan asylum, public library or Bible and tract society or to, for the use of or in trust for religious, charitable, benevolent, scientific, literary or educational purposes, including any institution instructing the blind in the use of dogs as guides, no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation; provided, that the exemption does not extend to transfers of property to such educational institutions and organizations of other states, the District of Columbia, territories and foreign countries which do not grant an equal, and like exemption on transfers of property for the benefit of such institutions and organizations of this State.
The fact that a beneficiary may be considered "nonprofit" by the Internal Revenue Service does not necessarily mean that it qualifies for exemption as a Class E beneficiary since the criteria are different.
Exempt from NJ Inheritance Taxes.

Source

The information in this article was obtained from New Jersey laws and regulations and the NJ Division of Taxation website.   Information in this article is subject to change at any time by the State of New Jersey.

More Information

This article is meant for general information only, and it is not to be construed as legal advice.   Click here to find other articles about estates and trusts.  If you would like more information about estate, trust or probate matters, please contact us for an evaluation of your case.

First published online: Mar 2011

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