NJ Form IT-R:

  • The inheritance tax applies to individuals who are residents of New Jersey, or owned property in New Jersey; and leave property to someone who isn’t a close relative.
  • The tax rate depends on the beneficiary class.
  • The executor/administrator of the estate is responsible for filing an inheritance tax return.
  • The return must be filed and any tax must be paid 8 months from the date of death.
  • An extension of 4 months can be granted, but the tax must still be paid by the original deadline.
  • Certain property can’t be transferred out of the estate until the inheritance tax is paid and the state issues a tax waiver.
  • If no tax is due, someone who is a Class A beneficiary can file a “Request for Real Property Tax Waiver.” If the waiver is granted, an inheritance tax return doesn’t have to be filed.

 

Assets owned at death that are subject to the NJ Inheritance Tax:

  • Real estate in New Jersey
  • Bank accounts and certificates of deposit
  • Investment accounts and securities
  • Vehicles and other items of personal property
  • Proceeds from insurance policies on your life, if decedent owned the policy
  • Retirement account funds
  • Small business interests (sole proprietorship, limited liability company, or small corporation)
  • Taxable gifts decedent made in the 3 years prior to death
  • Proceeds of any life insurance policy decedent transferred to an irrevocable life insurance trust within three years before death.

Beneficiary Classes:

  1. Class Abeneficiaries are exempt from the inheritance tax. They includes the deceased person’s:
  • spouse, domestic partner, or civil union partner
  • parent or grandparent
  • child (biological, adopted, or mutually acknowledged)
  • stepchild (but not stepgrandchild or great-stepgrandchild)
  • grandchild or other lineal descendant of a child
  1. Class Bwas deleted when New Jersey law changed.