NJ Inheritance Tax Rates

 The amount of New Jersey inheritance tax imposed depends upon the relationship of the transferee to the decedent.  New Jersey recognizes five beneficiary classes, but only four of those classes are currently being used.(Class B was eliminated by the statute as of July 1, 1963.)

Class A beneficiaries include the father, mother, grandparents, spouse, child of the decedent, adopted child of the decedent, issue of any child of the decedent and step-child of the decedent. New Jersey does not impose a tax on Class A beneficiaries. For example, if the provisions of the decedent's Will state that the estate is to be divided among the decedent's surviving spouse and three children, then there is no New Jersey inheritance tax.

Class C beneficiaries include the brother or sister of the decedent, including a half brother or half sister, the wife or widow of a son of the decedent, or the husband or widower of a daughter of the decedent. The first $ 25,000 of a bequest to a Class C beneficiary is exempt from taxation. A graduated rate schedule is used to calculate the tax on amounts exceeding $ 25,000. The tax rates start at 11% and max out at 16%.

Class D beneficiaries include every other transferee, distributee or beneficiary who is not included in Classes A, C or E. If the value of the property transferring to a Class D beneficiary is less than $ 500, there is no inheritance tax. The tax rate on assets valued at $ 700,000 or less are taxed at a rate of 15%. Assets transferred in excess of $ 700,000 are taxed at a rate of 16%.

Tax exempt organizations are classified as Class E beneficiaries. No inheritance tax is imposed on this class.