This calculator shows who pays New Jersey inheritance tax on what you leave, at what rate, and what gifts made in the last three years add to the bill.
Who pays New Jersey inheritance tax on what you leave?
New Jersey repealed its estate tax but kept the inheritance tax, and it is charged on the beneficiary, not the estate. Who receives the money decides whether there is any tax at all.
The gift box is optional. Enter what this person was given by the deceased in the three years before death, on top of what they inherit, and the tool will show what the contemplation of death presumption adds.
Beneficiary classes and rates from the Division of Taxation inheritance tax rates page. Repeal of the estate tax from the Division of Taxation page on inheritance and estate tax.
How it works
New Jersey taxes the recipient, not the estate
New Jersey repealed its estate tax for deaths after 1 January 2018, but the inheritance tax remains. The inheritance tax was not repealed. It taxes the beneficiary according to their relationship to you, which means the same estate can produce no tax at all or a substantial one depending only on who receives it.
Class A, which covers a spouse, children, grandchildren and parents, is exempt. Siblings and children-in-law are Class C, with an exemption and then rates from 11%. Nieces, nephews, friends and everyone else are Class D, taxed from the first dollar at 15%.
The three-year presumption
A gift made within three years of death is presumed to have been made in contemplation of death and is taxed as though it passed at death. The presumption can be rebutted, but that depends on evidence gathered while there is still time to gather it. The gift box on this calculator is an addition to what the beneficiary receives, not a breakdown of it.
Questions
Common questions
Does a niece really pay 15%?
Yes, from the first dollar, with no exemption. A niece receiving $300,000 pays $45,000. A child receiving the same amount pays nothing. That is the single largest lever in New Jersey estate planning and it is decided entirely by who is named.
Is life insurance caught?
Proceeds paid to a named beneficiary are generally not subject to New Jersey inheritance tax, which makes it a different instrument here from what it is in a state with an estate tax. See the life insurance calculator.
Check this against your own numbers.
The class of the beneficiary decides the rate, and the classes do not follow how close the relationship feels. We can cover it in a short conversation, at no charge and with no obligation.
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