New Jersey Inheritance Tax Guide
TaxRep › U.S. Estate & Inheritance Tax Guide › State Guides
New Jersey Inheritance Tax Guide (2025)
State Inheritance Tax (Classes A/C/D/E) · Filing due 8 months after death (10% annual interest thereafter) · Estate Tax repealed for deaths on/after Jan 1, 2018.
Inheritance Tax
No Estate Tax (since 2018)
Classes A/C/D/E
Last updated: October 6, 2025
Fast Facts
- No NJ Estate Tax for decedents dying on/after 1/1/2018 (inheritance tax remains).
- Filing & interest: Inheritance tax return/payment generally due 8 months after death; unpaid tax accrues 10% interest per annum thereafter.
- Classes & exemptions:
- Class A – Exempt: spouse/civil union partner/domestic partner; lineal ancestors/descendants; stepchildren (not step-grandchildren); mutually acknowledged child.
- Class C: siblings; child’s spouse (son-/daughter-in-law). Exemption $25,000; rates 11%–16% by bracket.
- Class D: all others (e.g., nieces/nephews, cousins, friends). $500 de minimis; then 15%/16%.
- Class E – Exempt: qualified charities, religious/educational institutions, and governments.
- Situs (what NJ can tax): Resident decedents – NJ real/tangible + worldwide intangibles. Non-residents – only NJ real/tangible; nonresident intangibles are not taxed.
- Waivers: L-8 (self-executing waiver for non-real estate assets to Class A) and L-9/L-9NR (real property waivers) commonly required to release assets and transfer title.
What’s taxable in New Jersey?
| Asset type | Resident decedent | Non-resident decedent |
|---|---|---|
| Real estate in NJ | Taxable (by beneficiary class) | Taxable (by beneficiary class) |
| Real estate outside NJ | Not taxable in NJ | Not taxable in NJ |
| Tangible personal property in NJ | Taxable | Taxable |
| Tangible personal property outside NJ | Not taxable in NJ | Not taxable in NJ |
| Intangibles (cash, brokerage, stocks, bonds, LLC interests) | Taxable (wherever located) | Not taxable in NJ (nonresident intangibles) |
Tax is computed per beneficiary on their NJ-taxable share, subject to class and brackets.
Inheritance Tax — Classes & Rates
| Class | Who? | Exemption | Rates / Brackets |
|---|---|---|---|
| A | Spouse, civil union/domestic partner; parents/grandparents; children (incl. adopted), grandchildren; stepchildren; mutually acknowledged child | Fully exempt | — |
| C | Siblings; child’s spouse (son-/daughter-in-law) | $25,000 |
11% over $25,000 up to $1,100,000 total; 13% $1.1M–$1.4M; 14% $1.4M–$1.7M; 16% over $1.7M |
| D | All others (e.g., nieces/nephews, cousins, friends) | $500 de minimis | 15% up to $700,000; 16% over $700,000 |
| E | Qualified charities; religious/educational institutions; governments | Exempt | — |
Transfers under $500 are exempt. Class B was eliminated years ago; NJ currently uses A/C/D/E.
New Jersey Inheritance Tax — Quick Calculator (per beneficiary)
Instant calculation as you type. Educational tool; actual returns consider situs, contingencies, trusts, prior transfers, and waivers.
1) Beneficiary & share
2) Situs toggle
If checked, tax = $0 (status-based exemption). Otherwise, calculator assumes the share is NJ-taxable.
3) Results
Class / exemption used
Class A — exempt
Estimated inheritance tax
$0
Payment timing
Due in 8 months
Interest of 10% per year begins after 8 months if tax remains unpaid. Waivers (L-8/L-9) are needed to release many NJ assets and real estate titles.
Planning in Practice: Step-Up, “Gift vs. Inherit,” Waivers
- Federal step-up (IRC §1014): Heirs generally receive stepped-up basis at FMV on death for U.S. income tax. NJ inheritance tax is separate (transfer tax at the state level).
- Gift vs inherit: Class A/E are fully exempt; for Class C/D, inheritance may still be preferable to lifetime gifts (carryover basis) because of step-up and brackets. Micro-bequests under $500 are exempt.
- Situs tuning: Nonresident intangibles are not taxed; resident out-of-state real/tangible are not taxed. Titling and holding entities can affect situs — get tailored advice.
- Waivers & timing: Use L-8 (bank/brokerage to Class A) and L-9/L-9NR (real property) where eligible to avoid delays. Interest starts at 10% after month 8 if tax is due and unpaid.
Cross-Border Snapshot (U.S.–Germany)
Assumptions: NJ domiciliary; one child (Class A); assets: NJ real estate $10.0M (basis $5.0M), German real estate $10.0M (basis $5.0M); DOD 2025; no debts/charity.
A) At death
- U.S. federal estate tax: 2025 exclusion ≈ $13.99M; tentative tax; claim foreign death tax credit (IRC §2014) for German ErbSt, capped proportionally.
- New Jersey inheritance tax: Child is Class A → $0 NJ inheritance tax. (If a Class D beneficiary instead, apply 15%/16% brackets to their NJ-taxable share.)
- Germany (ErbSt): German-situs real estate taxed, allowance prorated for limited liability; separate from NJ, but creditable at U.S. federal level under §2014 (cap applies).
B) After death (basis & sale)
- U.S. basis: Step-up → both properties reset to FMV ($10.0M). If sold 12 months later: NJ property $10.8M → U.S. gain $0.8M; German property $10.5M → U.S. gain $0.5M.
- Germany income tax: 10-year rule: ≤10y taxable using historical basis (no German step-up); >10y tax-free. U.S. FTC can offset U.S. tax on the German gain. NJ has no state capital-gains tax separate from the regular NJ GIT rules that apply to residents on income, but inheritance tax is unaffected.
Cross-border planning is nuanced (situs, waivers, contingent interests, entity holdings). After the initial setup, you can often fine-tune with additional gifts or trust/titling adjustments.
Official Resources
- Rates & classes (A/C/D/E): NJ Division of Taxation “Inheritance Tax Rates.”
- Estate tax repeal (effective 1/1/2018): NJ Division of Taxation “Inheritance & Estate Tax” / What’s New 2018.
- Filing & interest: NJ Division of Taxation “Inheritance Tax Filing Requirements” (10% after 8 months); General Info O-10-C (lien & interest).
- Classes (who is Class A): NJ “Beneficiary Classes” fact sheet (incl. stepchild, domestic partner, civil union partner).
- Situs: N.J.A.C. 18:26-6.5 (nonresident intangibles not taxed); IT-NR instructions (nonresident rules, 15-year lien on NJ real property).
- Waivers: Forms L-8 (self-executing waiver for non-real estate assets to Class A) and L-9/L-9NR (real property waivers); forms index page.
Our quick calculator simplifies brackets and situs; always confirm with official tables and forms when filing.
Need tailored help? Our U.S. CPAs and German Wirtschaftsprüfer can advise case-by-case — especially for cross-border U.S.–Germany planning and NJ situs/waiver issues.