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When someone dies, the assets he/she owns must go somewhere or to someone. When these assets are transferred from the name of the person who died ("the decedent") to someone else ("the beneficiary"), the State of New Jersey may impose a tax on this "transfer" of ownership.
The amount of tax imposed depends on several factors:
Who the beneficiaries are and how they are related to the decedent;
The date of death value of the assets (and debts) that the decedent owned;
What kind of assets the decedent owned;
Whether the decedent lived in New Jersey or another state.
Note: Where the beneficiaries lived is not a factor.
There are two types of Inheritance Tax, resident and non-resident. This is based on where the person legally lived when he/she passed away.
Resident Decedents
Someone who died as a legal resident of New Jersey.
Almost anything a decedent owned can be taxed, depending on who inherits the decedent's property.
This can include:
Houses or real estate;
Stocks;
Bonds;
Cars; and
Other Tangible Personal Property.
Non-Resident Decedents
Someone who died as a legal resident of another state or a foreign country
People who did not live in New Jersey, but owned certain types of property in New Jersey (usually real estate), may be subject to New Jersey Non-Resident Inheritance Tax.
See New Jersey Non-Resident Inheritance Tax Frequently Asked Questions kb for more information.
New Jersey Estate Tax Overview
Estate Tax is in addition to Inheritance Tax. It is based upon the size of the decedent's gross estate and according to the decedent's date of death.
The New Jersey Estate Tax is scheduled to be phased out in two parts. If the resident decedent died:
On December 31, 2016, or before, the Estate Tax exemption was capped at $675,000;
On or after January 1, 2017, but before January 1, 2018 , the Estate Tax exemption was $2 million;
On or after January 1, 2018, no Estate Tax will be imposed.
Note: The estate only pays the amount of Estate Tax which is over and above the amount of any Inheritance Tax due.
Note: No Estate Tax is due if the decedent was not a resident of New Jersey.
For resident decedents who die before January 1, 2017
Estate Tax applies if the resident decedent's gross taxable estate, plus adjusted taxable gifts, exceeds $675,000 43 kb as determined in accordance with the provisions of the Internal Revenue Code in effect on December 31, 2001.
For resident decedents who die on or after January 1, 2017, but before January 1, 2018
Estate Tax applies if the resident decedent's taxable estate exceeds $2 million 43 kb, as determined in accordance with the provisions of the Internal Revenue Code in effect on January 1, 2017.
For resident decedents who die on or after January 1, 2018
No New Jersey Estate Tax will be imposed on the estates of resident decedents who die on or after January 1, 2018. No Estate Tax return will be required. Note: New Jersey Inheritance Tax may still apply. See Inheritance Tax Filing Requirements.
Last Updated: Friday, 01/12/18
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