NJ Has Inheritance Tax, Not Estate Tax
Key distinction: NJ repealed its estate tax effective 2018. NJ currently imposes an inheritance tax (N.J.S.A. 54:34-1). The difference: an estate tax is based on the total estate value, while an inheritance tax depends on who inherits.
The federal estate tax (IRC §2001) still applies with a $13,990,000 exemption for 2025.
Tax Rates by Beneficiary Class
| Class | Relationship | Tax Rate |
|---|---|---|
| A | Spouse, child, grandchild, parent, grandparent, stepchild, civil union partner | Exempt — $0 |
| C | Sibling, spouse/CU partner of child | 11% on first $25K over $25K exemption; 13% on $100K-$150K; 14% on $150K-$700K; 16% over $700K |
| D | All others (friends, non-relatives, entities) | 15% on first $700K; 16% over $700K |
| E | Charities, religious/educational orgs, government | Exempt |
Due within 8 months of death. Extensions available.
Frequently Asked Questions
Does NJ have an estate tax?
No. NJ repealed its estate tax effective 2018. NJ has an inheritance tax (N.J.S.A. 54:34-1), which is based on the relationship of the beneficiary to the decedent, not the total estate value. The federal estate tax still applies with a $13,990,000 exemption for 2025.
Do children pay NJ inheritance tax?
No. Class A beneficiaries — which includes spouse, children, grandchildren, parents, grandparents, stepchildren, and civil union partners — are completely exempt from NJ inheritance tax.
What is the NJ inheritance tax rate for siblings?
Siblings are Class C beneficiaries. The first $25,000 is exempt, then rates are: 11% on $25,001-$100,000, 13% on $100,001-$150,000, 14% on $150,001-$700,000, and 16% over $700,000.