Family · Inheritance tax
Does New Jersey Have an Inheritance Tax?
Whether New Jersey taxes what an heir inherits, who has to pay, the rates by relationship, and who is exempt. Inheritance tax is separate from any estate tax. Cited to the statute.
How the inheritance tax works in New Jersey
Who pays, how the rate tracks the relationship to the person who died, and the heirs the law exempts.
| How the tax works | What it means |
|---|---|
| The heir pays, by relationship class | New Jersey sorts each beneficiary into a class. Class A (spouse or partner, children, stepchildren, grandchildren, parents, grandparents) is exempt. Class C (siblings, and a son- or daughter-in-law) and Class D (everyone else) pay the tax under N.J.S.A. 54:34-2. |
| Class C rates | A Class C heir pays nothing on the first $25,000, then 11% on the next amount up to $1,100,000, 13% on the next $300,000, 14% on the next $300,000, and 16% on anything over $1,700,000. |
| Class D rates | A Class D heir, such as a niece, nephew, cousin, or friend, pays 15% on the first $700,000 and 16% on the amount above that. The tax applies to any transfer of $500 or more. |
| Who is exempt | What it means |
|---|---|
| Class A close family exempt | A surviving spouse, civil union or domestic partner, children and their descendants, stepchildren, parents, and grandparents are Class A and pay no inheritance tax. |
| Charities and government exempt | Class E beneficiaries, including qualifying charities, religious and educational institutions, and government bodies, are exempt from the tax. |
| Life insurance to a named beneficiary | Life insurance proceeds paid to a named beneficiary are not subject to New Jersey inheritance tax. |
What you can do right now
Concrete, neutral steps if you may owe or receive an inheritance in New Jersey. This is general information, not tax or legal advice.
- Sort each heir into a class
Place every beneficiary into Class A (exempt), Class C, Class D, or Class E (exempt). The class sets whether and how much tax is owed on that person’s share.
- File the correct return
The transfer inheritance tax is reported to the New Jersey Division of Taxation. A return is generally due within eight months of the death; confirm the current form and deadline before filing.
- Do not confuse it with the old estate tax
For deaths in 2018 or later there is no New Jersey estate tax. Only the inheritance tax may apply, and only to Class C and Class D heirs.
- Get help for larger or mixed estates
If heirs fall into different classes or the amounts are large, the graduated brackets get complex. Confirm the numbers with the Division of Taxation or a probate attorney before paying.
Inheritance tax turns on the exact relationship and the value received. The state department of revenue publishes the forms and can point you to the current rate schedule.
→ New Jersey Division of Taxation: Inheritance TaxThis is general information, not tax or legal advice. Rates and exemptions change and turn on the relationship, so confirm your situation against the statute or with the state revenue office.
What people in New Jersey get wrong about inheritance tax
New Jersey is one of the few states that still levies an inheritance tax, a tax the heir pays based on how they were related to the person who died. The state sorts beneficiaries into classes. Class A, which covers a spouse or partner, children and grandchildren, and parents, pays nothing. Class C, which covers siblings and a son- or daughter-in-law, pays nothing on the first $25,000 and then 11% rising to 16% on very large shares. Class D, which is everyone else such as nieces, nephews, cousins, and friends, pays 15% on the first $700,000 and 16% above that, on any transfer of $500 or more. Charities and government fall in the exempt Class E. Two points confuse people. First, New Jersey repealed its separate estate tax for deaths in 2018 and later, but the inheritance tax stayed. Second, an inheritance tax is not an estate tax: the heir pays the inheritance tax, while an estate tax would be paid by the estate.
Common questions
Does New Jersey have an inheritance tax?
Yes. New Jersey levies a transfer inheritance tax under N.J.S.A. 54:34-1 et seq. Close family in Class A pay nothing, while Class C and Class D heirs pay 11% to 16%.
Who is exempt from New Jersey inheritance tax?
Class A beneficiaries are exempt: a spouse or civil union or domestic partner, children and their descendants, stepchildren, parents, and grandparents. Charities and government (Class E) are also exempt.
Did New Jersey get rid of its inheritance tax?
No. New Jersey repealed its separate estate tax for deaths on or after January 1, 2018, but it kept the inheritance tax. The two are different taxes.
How much is New Jersey inheritance tax for a niece or nephew?
Nieces and nephews are Class D and pay 15% on the first $700,000 and 16% above that, on any transfer of $500 or more.
Is inheritance tax the same as estate tax in New Jersey?
No. The inheritance tax is paid by the heir based on relationship class. An estate tax is paid by the estate. New Jersey no longer has a state estate tax, but the inheritance tax remains.
Not legal advicePlainStatute provides plain-language summaries of public law for general information only. This is not legal advice. Statutes change; always confirm current requirements with the official source linked above before acting.