2021 Estate Tax Update

New Jersey has no effective estate tax, which means that transfers on death are not subject to a tax based on the amount being transferred. However, New Jersey still has an Inheritance Tax, which is calculated based on the relationship of the decedent to the recipient. Transfers to a spouse or child at death are exempt from the New Jersey Inheritance Tax, while transfers to unrelated persons are taxed at approximately 15% (for amounts $500 or more).

For Federal Estate Taxes, the lifetime unified estate and gift tax exemption has increased from $11,580,000 (2020) to $11,700,000 as of January 1, 2021. This amount is doubled for spouses electing portability. This means that a married couple can pass $23,400,000 without incurring any federal estate tax.

The annual gift exclusion remains at $15,000 per recipient.

New Jersey Estate Tax Repeal

As of January 1, 2017, the New Jersey Estate Tax will not apply to estates valued at up to $2,000,000. This is a change from prior law which previously placed the exemption amount at $675,000.

As of now, the New Jersey Estate Tax is scheduled to be repealed entirely for Decedent’s dying on or after January 1, 2018.