New Jersey's inheritance tax is a nuanced, variable bit of legislature that applies in some situations, but not in others. When planning out your estate and determining where you will distribute things after you have passed, it is important to be aware of all applicable taxes and deductions.
This includes the federal estate tax, the New Jersey estate tax and the:
New Jersey Inheritance Tax
The New Jersey Inheritance Tax is imposed at a graduated rate, depending on the total value of the inheritance. This means that the rate at which your beneficiary will be taxed for a $25,000 inheritance will be different than the rate at which he or she will be taxed for a $250,000 inheritance.
An inheritance becomes taxable when it reaches $500; however, it only applies to certain individuals.
For example, you may pass assets on to your spouse, parents, grandparents, children, or grandchildren without incurring an inheritance tax. These assets will still be taxable under the New Jersey estate tax and, next year, the federal estate tax.
Still, in most matters of asset transfer between family members, the inheritance tax will not come into play.
This tax does come into play when you pass part of your estate on to someone not included in the above list. Say you leave $1,000 to the child of a friend. This money will be subject to the state inheritance tax and that individual will be held responsible for filing a return within eight months of your passing.
Related Resource
- New Jersey Department of the Treasury
No Comments
Leave a comment