New Jersey Estate Tax Changes
In October, Governor Chris Christie signed a transportation funding bill which included the New Jersey Estate Tax Repeal. This bill will go into effect on January 1, 2018.
What Does The Change Mean?
You may be wondering what this tax repeal means for your estate. Currently, New Jersey has an estate tax exemption of $675,000. The repeal means this exemption will increase to $2 million for all deaths on or after January 1, 2017.
The estate tax will now be levied only after the amount left to heirs exceeds $2 million. Furthermore, for all deaths on or after January 1, 2018, the tax will be completely eliminated. This is great news for New Jersey residents.
The Difference Between an Estate Tax and an Inheritance Tax
Many do not realize that an inheritance tax is separate from an estate tax. Most states do not have inheritance taxes, but New Jersey is one of the few states where the tax remains while the New Jersey estate tax is levied on a Decedent’s transfer to all beneficiaries except a spouse or charity. The inheritance tax is levied on property which passes to anyone other than a spouse, parent, grandparent, child, or grandchild. Accordingly, assets which pass to a decedent’s other relatives such as aunts, uncles, nieces, nephews and cousins, etc. will be subject to the New Jersey Inheritance tax. The new legislation did not repeal this inheritance tax.
Contact McCarthy Weidler PC for more information.