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New Jersey Estate Taxes

Does New Jersey Collect Estate Taxes ?

New Jersey is an expensive place to die. The state collects both an estate tax and an inheritance tax. This is separate from any taxes the federal government will collect. The Garden State is among one of several states that still assesses separate estate and inheritance taxes on certain property when a person dies.

Estate Tax

Estates with a total value of more than $675,000 are subject to the New Jersey estate tax of up to 16%. However, property you leave to your spouse or civil union partner is exempt from state estate tax, no matter what the amount. Basically, the executor of your estate will have to file a state tax return. This tax only applies to New Jersey residents. So, if you own property here, but aren't a resident, you won't have to worry about the tax.

Inheritance Tax

New Jersey also imposes an inheritance tax of up to 16% on the deceased person's estate.The inheritance tax applies when someone who lived in New Jersey, or owned property there, leaves property to someone who isn't a close relative.

The inheritance tax will only apply to certain categories of beneficiaries. For example, if you are a spouse, domestic partner, parent, child, stepchild, or grandparent, the inheritance tax doesn't apply. However, all other relationships may have to pay the tax at varying rates depending on your relationship to the person who died. For instance, a sibling will have to pay a certain tax percentage on any estate over $25,000.

Inheritance Tax Exemptions

Some items are exempt from inheritance taxes such:

  • All transfers having an aggregate value under $500;
  • Life insurance proceeds paid to a named beneficiary;
  • Charitable transfers for the use of any educational institution, church, hospital, orphan asylum, public library, etc.;
  • Transfers for public purposes made to New Jersey or any political subdivision thereof;
  • Federal civil service retirement benefits payable to a beneficiary other than the estate, executor, or administrator;
  • Annuities payable to survivors of military retirees; and
  • Qualified employment annuities paid to a surviving spouse, civil union partner, or domestic partner.

See Probate Court, State Probate Courts, Avoiding Probate, and Estate Taxes for more information.

Government Agency State of New Jersey Department of Treasury, Division of Taxation

When is estate tax due?

When is the inheritance tax due?

The New Jersey estate tax is due on the decedent's date of death and must be paid within nine months in all cases.

The inheritance tax is due eight (8) months after a death.

What is the Tax Rate?

Estate Taxes: Up to 16%

Inheritance Taxes: Varies depending on your relationship to the deceased person.

List of Forms

Inheritance Tax Forms

New Jersey tax laws can be tricky. Please consider contacting a local tax attorney who can help you better understand the current rules and procedures.

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