New Jersey inheritance tax guide
NJ Inheritance Tax 2026: Rates by Class and What You'd Owe
New Jersey taxes what each beneficiary receives, not the whole estate. Spouses, children, grandchildren and parents (Class A) pay nothing. Brothers, sisters and children-in-law (Class C) pay 11% to 16% on the amount above $25,000. Nieces, nephews, friends and everyone else (Class D) pay 15% up to $700,000 and 16% above. The return and the tax are due 8 months after the death.
Quick answer
How NJ inheritance tax works, step by step
The Division of Taxation calls it a “beneficiary” tax: it is figured on who receives each asset and how much each one receives. Under N.J.S.A. 54:34-1 it applies to transfers worth $500 or more. The executor, administrator, or heir-at-law files the return and pays any tax within eight months of the date of death; after that, unpaid tax draws interest at 10% a year. Many estates that owe nothing still file a short form, because New Jersey real estate and New Jersey bank and brokerage accounts cannot be released without a tax waiver.
- Put each beneficiary in a class. Class A (spouse, civil union or domestic partner, child, stepchild, grandchild, parent, grandparent) and Class E (qualified charities, the State) pay no tax. Class C is brothers, sisters, and a child's spouse. Class D is everyone else.
- Value what each beneficiary receives as of the date of death. The Division requires fair market value on the date of death, not on the filing date. A resident's real and tangible property in New Jersey and all intangible property count; for a nonresident, only New Jersey real and tangible property is taxed.
- Apply that class's rates to that beneficiary's share. Class C: no tax on the first $25,000, then 11%, 13%, 14%, and 16%. Class D: 15% on the first $700,000 and 16% above it. Each beneficiary is figured separately.
- Pick the form. Form IT-R for a resident decedent when any beneficiary is not Class A, Form IT-NR for a nonresident with New Jersey property, Form L-8 (given to the bank) or Form L-9 (filed with the Division) when everyone is Class A and no return is required.
- File and pay within eight months. Returns are paper only. Form IT-EXT can extend the time to file, never the time to pay, and interest of 10% a year runs on tax unpaid after eight months.
Settling a New Jersey estate? Talk to a CPA, and check the license first.
Whether tax is due turns on the will, who the beneficiaries are, and what each asset was worth on the date of death. This page cannot see any of that. A CPA or an estate attorney who prepares the IT-R works from the actual documents, and New Jersey's own records show whether that person is licensed.
This guide explains the rules; it is not tax or legal advice. Nothing on this page is a referral or an endorsement.
Who pays NJ inheritance tax: the four beneficiary classes
The class depends on the beneficiary's relationship to the person who died. Where the beneficiary lives does not matter; the Division says the decedent's residence decides which return applies. The classes below are the Division's own lists from its General Information booklet (Form O-10-C) and its beneficiary-class chart. Class B no longer exists: it was eliminated by amendment on July 1, 1963.
| Class | Who is in it | Tax |
|---|---|---|
| Class A | Spouse; civil union partner (after February 19, 2007); domestic partner (after July 10, 2004); child, including a legally adopted child; grandchild, great-grandchild and so on; parent or grandparent; mutually acknowledged child; stepchild (not a step-grandchild) | No tax |
| Class C | Brother or sister; the spouse or surviving spouse of a child (son-in-law or daughter-in-law); the civil union partner of a child (after February 19, 2007) | First $25,000 untaxed, then 11% to 16% |
| Class D | Everyone not in Class A, C, or E. The Division's executor guide names nieces, nephews, aunts, uncles, friends, and non-relatives. | 15% up to $700,000, 16% above |
| Class E | Qualified charities (generally 501(c)(3)), religious, educational and medical institutions, non-profit benevolent or scientific institutions, and the State of New Jersey or its political subdivisions | Exempt |
- A step-grandchild is not Class A. The Division's chart excludes step-grandchildren and great-step-grandchildren, so they fall in Class D.
- A mutually acknowledged child is Class A, but neither the L-8 nor the L-9 short form can be used when that relationship is claimed; a full IT-R is required.
- Transfers to Class A beneficiaries are untaxed whatever their size. A return can still be needed, for example when assets pass through a trust or a disclaimer, according to the Division's resident flowchart.
NJ inheritance tax rates for 2026
These rates are set in N.J.S.A. 54:34-2 and have applied to transfers since July 1, 1988 for Class C. The Division's current rate table, last updated April 22, 2025, shows the same brackets. Each rate applies only to the part of a beneficiary's share inside its bracket, like income tax brackets.
The tax starts at $500. N.J.S.A. 54:34-1 imposes it on transfers “of the value of $500.00 or over,” and the Division lists transfers under $500 as exempt. For a Class D beneficiary, the statute then taxes “any amount up to $700,000.00” at 15%, so by its wording the 15% runs from the first dollar once a share reaches $500. Some law-firm pages subtract $500 first and get a slightly lower figure; confirm the treatment on the IT-R with whoever prepares it.
| Class and amount received by one beneficiary | Rate on that slice | Tax at the top of the slice |
|---|---|---|
| Class A or Class E, any amount | None | $0 |
| Class C, first $25,000 | No tax | Nothing yet |
| Class C, over $25,000 up to $1,100,000 | 11% | $118,250 at $1,100,000 |
| Class C, over $1,100,000 up to $1,400,000 | 13% | $157,250 at $1,400,000 |
| Class C, over $1,400,000 up to $1,700,000 | 14% | $199,250 at $1,700,000 |
| Class C, over $1,700,000 | 16% | $199,250 plus 16% of the excess |
| Class D, $500 up to $700,000 | 15% | $105,000 at $700,000 |
| Class D, over $700,000 | 16% | $105,000 plus 16% of the excess |
What you'd owe: NJ inheritance tax worked examples
The table applies the official rates to round amounts received by one beneficiary. It is our arithmetic, shown so you can check a figure; it is not an estimate for any estate. The effective rate is the tax divided by the amount received.
Two examples in words: a niece who inherits $200,000 owes $30,000, which is 15% of $200,000. A brother who inherits $200,000 owes $19,250, which is 11% of the $175,000 above his $25,000 exemption. A son who inherits $200,000 owes nothing.
This page has no calculator. If you were looking for an NJ inheritance tax calculator, this is the same arithmetic: find the beneficiary's class, then read across the row for the amount.
| Amount one beneficiary receives | Class A | Class C (sibling, child's spouse) | Class D (niece, nephew, friend) |
|---|---|---|---|
| $10,000 | No tax | $0, inside the $25,000 exemption | $1,500 (15%) |
| $25,000 | No tax | $0, exactly the exemption | $3,750 (15%) |
| $50,000 | No tax | $2,750 (5.50%) | $7,500 (15%) |
| $100,000 | No tax | $8,250 (8.25%) | $15,000 (15%) |
| $250,000 | No tax | $24,750 (9.90%) | $37,500 (15%) |
| $500,000 | No tax | $52,250 (10.45%) | $75,000 (15%) |
| $1,000,000 | No tax | $107,250 (10.73%) | $153,000 (15.30%) |
| $2,000,000 | No tax | $247,250 (12.36%) | $313,000 (15.65%) |
NJ estate tax vs inheritance tax: the estate tax ended in 2018
New Jersey had two death taxes, and only one is left. The estate tax was based on the size of the whole estate; the inheritance tax is based on who receives each asset. The Division states that no New Jersey estate tax is imposed for anyone who died on or after January 1, 2018, and that this does not affect the inheritance tax, “which remains in force.”
Nonresidents never owed New Jersey estate tax. The federal estate tax is a separate tax: for 2026 the IRS lists a basic exclusion amount of $15,000,000, set by Public Law 119-21.
| Date of death | New Jersey estate tax | New Jersey inheritance tax |
|---|---|---|
| December 31, 2016 or earlier | Return required when the gross estate plus adjusted taxable gifts exceeded $675,000 | Applied, and was credited against the estate tax |
| January 1, 2017 through December 31, 2017 | Return required when the gross estate exceeded $2 million | Applied, and was credited against the estate tax |
| January 1, 2018 or later | None | Still applies |
What is taxed and what is exempt
For a New Jersey resident, the tax reaches real and tangible personal property in New Jersey and all intangible property wherever it is, such as bank accounts, stocks, and bonds. For a nonresident, it reaches only real and tangible personal property located in New Jersey (N.J.S.A. 54:34-1; Form O-10-C). Everything below comes from N.J.S.A. 54:34-4, Form O-10-C, or the IT-R itself.
- Life insurance paid to a named beneficiary is exempt. N.J.S.A. 54:34-4(f) exempts proceeds “paid or payable at or after the death of such decedent to any beneficiary or beneficiaries other than the estate.” This holds even when the beneficiary is Class C or D. Some pages say otherwise; the statute and Form O-10-C do not.
- Life insurance paid to the estate is reported on the IT-R (Schedule C, Part III, Section B). Dividend accumulations, post-mortem and terminal dividends, and premium refunds are not treated as insurance proceeds and are reported as taxable transfers even when the policy names a beneficiary.
- IRAs, 401(k)s, and other private retirement plans are reported. The IT-R lists IRAs on Schedule B-1 and plans payable to a named beneficiary on Schedule C, Part III. N.J.S.A. 54:34-4 gives no general exemption for them, so they count toward a Class C or Class D beneficiary's taxable share.
- Exempt by name: New Jersey Public Employees' Retirement System, Teachers' Pension and Annuity Fund, and Police and Firemen's Retirement System payments; federal Civil Service Retirement benefits and Survivor Benefit Plan annuities paid to someone other than the estate; and a qualified-plan benefit payable to a surviving spouse or domestic partner.
- Gifts to Class E organizations, such as qualified charities and the State, are exempt under N.J.S.A. 54:34-4(a) and (d).
- Transfers worth less than $500 to a beneficiary are exempt.
Joint accounts, joint property, and the three-year rule
Property held jointly with someone other than a spouse or partner is taxed as if it belonged entirely to the person who died, unless the survivor proves to the Division that part of it was originally theirs (N.J.S.A. 54:34-1(f)). The IT-R asks for proof of contribution when a surviving joint tenant claims partial ownership.
Real estate held by spouses or civil union partners as tenants by the entirety need not be reported, and no waiver is needed for it, according to Form O-10-C and the Division's waiver page.
The “3 year rule” people ask about is in N.J.S.A. 54:34-1(c). A gift of a material part of an estate, made without adequate payment within three years before death, is presumed to have been made in contemplation of death and is taxed like an inheritance unless proved otherwise. A gift made before that three-year window is not treated that way.
The 8-month deadline, interest, and extensions
These rules come from the Division's filing-requirements page, Form IT-EXT, and the Executor's Guide. For a death on October 16, 2026, eight months runs to June 16, 2027, by our count.
| Rule | What it says | Source |
|---|---|---|
| Return and payment | Due within 8 months of the date of death | Division filing requirements; Form O-10-C |
| Interest | 10% a year on any tax not paid within 8 months of the death | Division filing requirements; Executor's Guide |
| Extension to file | Form IT-EXT: up to 4 months, then up to 2 more; beyond 6 months only when the Director finds exceptional circumstances | Form IT-EXT |
| Extension to pay | None. Interest still runs on unpaid tax. | Division filing requirements |
| How to file | Paper only; electronic filing is not available for inheritance and estate tax returns | Division filing requirements |
| Lien | The tax is a lien on New Jersey property for 15 years from the death unless paid sooner or bonded | Form O-10-C; Division waiver page |
| Processing | At least several months; the Division says about 40% to 50% of returns get additional attention in the form of an audit | Executor's Guide |
Inheritance tax waivers: Form 0-1, L-8, and L-9
A tax waiver (Form 0-1) is the Director's written consent to transfer a decedent's New Jersey assets. Only the Division issues it, one per asset, and it is not a form you fill out. Waivers are needed for New Jersey real estate, funds in New Jersey financial institutions, brokerage accounts with a New Jersey office, and stock or bonds of New Jersey companies.
Until a waiver arrives, a bank may release up to 50% of a decedent's funds to the executor, administrator, or a surviving joint owner, and can honor a check made out to “NJ Inheritance and Estate Tax” to pay the tax. A brokerage firm must hold assets worth half the date-of-death value. This is why a bank can seem to freeze half an account.
| Situation | What to use | Where it goes |
|---|---|---|
| Every beneficiary is Class A; releasing bank, brokerage, or New Jersey stock and bond accounts | Form L-8, self-executing waiver | To each bank or financial institution, not to the Division |
| Every beneficiary is Class A, no tax and no return required; releasing New Jersey real estate | Form L-9 | Filed with the Division, which issues the 0-1 waiver |
| Any beneficiary is Class C, D, or E, or assets pass by disclaimer or through a trust | Form IT-R, the full return | Filed with the Division; waivers follow |
| Trust beneficiaries believed to be all Class A | Form L-4 may be filed to request waivers | Filed with the Division, which may still require a full return |
| Mutually acknowledged child claimed | Form IT-R; L-8 and L-9 cannot be used | Filed with the Division |
- No waiver is needed for assets held in a bona fide trust, stock in a non-New Jersey corporation, a partnership interest, vehicles, household goods, wages, U.S. savings bonds, or tenancy-by-the-entirety real estate. They are still reported on the return.
- An IRA held in a bank that would otherwise need a waiver needs one too, but the bank can move it to an inherited IRA in the same institution without one.
Nonresidents who owned New Jersey real estate
If the person who died lived in another state or country, New Jersey taxes only real estate and tangible property located in New Jersey, such as a house, a car, or furniture here. The return is Form IT-NR, due eight months after death. Intangible assets, such as bank accounts and stock, are not taxed directly and need no waiver, but they are used in calculating the tax and must be reported.
Form L-9 NR can replace the IT-NR when every beneficiary of the whole estate, in and outside New Jersey, is Class A or Class E. It has no dollar limit and no due date, according to the Division's nonresident FAQ. There is no New Jersey estate tax on a nonresident's estate.
How to avoid NJ inheritance tax: what the law exempts
This page does not recommend a plan. It lists what the statute and the Division say is outside the tax, which is what searches about avoiding the tax are asking. Choosing among them is estate planning, a decision for the owner with a licensed attorney or CPA.
- Anything passing to a Class A beneficiary or a Class E organization is untaxed.
- Life insurance paid to a named beneficiary other than the estate is untaxed for every class.
- Real estate held by spouses or civil union partners as tenants by the entirety is not reported.
- Gifts made more than three years before death are not presumed to be in contemplation of death; material gifts made within three years are, unless proved otherwise.
- The named public pensions and federal annuities in N.J.S.A. 54:34-4 are exempt; private IRAs and 401(k)s are not.
Who files, and who can help: check the license first
The executor, administrator, or heir-at-law files the return and signs it under penalty of perjury. A CPA or an estate attorney can prepare the IT-R, value the assets, and request waivers. Both are licensed in New Jersey, and both licenses can be checked in the state's own records before any documents change hands.
LA Trusted Professionals does not rank accountants or attorneys, endorse anyone, or award a status through this page. There is no public application form on this site.
Confirm a CPA's license, status, and any Board action with the NJ CPA license lookup guide.
Confirm an estate attorney's standing in the Statewide Attorney Index with the NJ attorney lookup guide.
Owners of a pass-through business can read how New Jersey's elective entity tax works in the NJ BAIT tax guide.
Questions to ask before acting.
How much is inheritance tax in New Jersey?
It depends on the beneficiary's class. Class A (spouse, children, grandchildren, parents, grandparents, stepchildren) and Class E (charities) pay nothing. Class C (siblings, a child's spouse) pays nothing on the first $25,000, then 11% up to $1,100,000, 13% to $1,400,000, 14% to $1,700,000, and 16% above. Class D (everyone else) pays 15% up to $700,000 and 16% above.
Do children pay inheritance tax in New Jersey?
No. Children, including legally adopted children and stepchildren, are Class A, as are grandchildren and other lineal descendants. Class A beneficiaries pay no New Jersey inheritance tax, although the estate may still need to file a form to release New Jersey real estate or accounts.
Does a niece or nephew pay NJ inheritance tax?
Yes. The Division's Executor's Guide places nieces and nephews in Class D, which pays 15% on amounts up to $700,000 and 16% above. A niece who inherits $200,000 owes $30,000. Transfers worth less than $500 are exempt.
Does New Jersey still have an estate tax?
No, for deaths on or after January 1, 2018. The Division says the inheritance tax remains in force. The estate tax applied above $675,000 for deaths through 2016 and above $2 million for deaths in 2017.
Is life insurance subject to NJ inheritance tax?
Not when it is paid to a named beneficiary other than the estate. N.J.S.A. 54:34-4(f) exempts those proceeds for every class of beneficiary. Insurance paid to the estate is reported, and dividend accumulations and premium refunds are treated as taxable transfers.
Is an inherited IRA or 401(k) subject to NJ inheritance tax?
It is reported on the IT-R, and N.J.S.A. 54:34-4 has no general exemption for private retirement accounts, so it counts toward a Class C or Class D beneficiary's taxable share. Named public pensions such as PERS, TPAF, and PFRS, and a qualified-plan benefit paid to a surviving spouse or domestic partner, are exempt.
What is the 3-year rule in NJ?
Under N.J.S.A. 54:34-1(c), a gift of a material part of an estate made without adequate payment within three years before death is presumed to have been made in contemplation of death and is taxed like an inheritance, unless proved otherwise. Gifts made earlier than three years before death are not treated that way.
When is the NJ inheritance tax return due?
Within eight months of the date of death, with any tax. Form IT-EXT can extend the time to file by up to 4 months and then 2 more, but there is no extension to pay, and interest of 10% a year runs on tax unpaid after eight months.
What is an NJ inheritance tax waiver?
Form 0-1 is the Division Director's written consent to transfer a decedent's New Jersey real estate, New Jersey bank funds, brokerage accounts, and New Jersey company stock. Only the Division issues it. When every beneficiary is Class A, Form L-8 (given to the bank) and Form L-9 (filed with the Division for real estate) can replace a full return.
Who pays NJ inheritance tax, the estate or the beneficiary?
The Division calls it a “beneficiary” tax: it is figured on each beneficiary's share based on that person's class. The executor, administrator, or heir-at-law files the return and pays the tax within eight months of the death.
Does a nonresident who owned a house in New Jersey owe NJ inheritance tax?
Possibly. New Jersey taxes a nonresident's real estate and tangible property located in New Jersey, reported on Form IT-NR within eight months. If every beneficiary of the whole estate is Class A or Class E, Form L-9 NR can be used instead.
Original and attributed sources
Return to the record behind each claim.
A link shows where a fact came from; it does not turn every statement on that source into an independently verified claim.
- NJ Division of Taxation — Inheritance and Estate TaxWhat the tax depends on, resident and nonresident decedents, and the end of the estate tax for deaths on or after January 1, 2018. Checked October 16, 2026.
- NJ Division of Taxation — Inheritance Tax RatesThe Class A, C, and D rate table and the estate tax by date of death. Page last updated April 22, 2025; checked October 16, 2026.
- NJ Division of Taxation — Inheritance Tax Filing RequirementsThe 8-month deadline, 10% interest, Form IT-EXT, paper-only filing, and when to use IT-R, L-8, L-9, IT-NR, and L-9 NR. Page last updated September 28, 2026; checked October 16, 2026.
- NJ Division of Taxation — Tax Waiver RequirementsWhich assets need a waiver, the 15-year lien, the 50% blanket waiver, brokerage accounts, IRAs, and non-waiver situations. Page last updated September 28, 2026; checked October 16, 2026.
- NJ Division of Taxation — What is an Inheritance or Estate Tax Waiver (Form 0-1)?Form 0-1 is issued only by the Division, one per asset. Page last updated April 22, 2025; checked October 16, 2026.
- NJ Division of Taxation — General Information, Inheritance and Estate Tax (Form O-10-C, PDF)Beneficiary classes, rates, the $500 threshold, exemptions including named-beneficiary life insurance, the 15-year lien, L-8 and L-9 rules, and tenancy by the entirety. Revision 01-17; read October 16, 2026.
- NJ Division of Taxation — Inheritance Tax Beneficiary Classes (PDF)Who is in Class A, C, D, and E, including the step-grandchild exclusion. Read October 16, 2026.
- NJ Division of Taxation — A Guide to Being an Executor (PDF)Class D examples (nieces, nephews, aunts, uncles, friends), the estate tax exemption by year, the 50% release, processing time, and the 40% to 50% audit share. Read October 16, 2026.
- NJ Division of Taxation — Form IT-R, Inheritance Tax Resident Return (PDF)Schedule B-1 (accounts including IRAs), Schedule C Part III (plans and policies payable on death), proof of contribution for joint tenants, and the perjury certification. Revision 12-24; read October 16, 2026.
- NJ Division of Taxation — Form L-8, Affidavit for Non-Real Estate Investments (PDF)The self-executing waiver for Class A beneficiaries, filed with the institution and not the Division. Read October 16, 2026.
- NJ Division of Taxation — Form L-9, Affidavit for Real Property Tax Waiver (PDF)Usable only if all beneficiaries are Class A, no tax is due, and no return is required. Read October 16, 2026.
- NJ Division of Taxation — Form IT-EXT, Application for Extension of Time to File (PDF)Up to 4 months, then 2 more; longer only for exceptional circumstances; no extension of time to pay. Read October 16, 2026.
- NJ Division of Taxation — Resident Inheritance Tax Flowchart (PDF)When an IT-R is required (non-Class A beneficiaries, disclaimers, trusts) and when L-4, L-8, or L-9 can be used. Read October 16, 2026.
- NJ Division of Taxation — Non-Resident Inheritance Tax FAQ (PDF)IT-NR and L-9 NR, no estate tax for nonresidents, and residence of the decedent, not the beneficiary, deciding the return. Read October 16, 2026.
- N.J.S.A. 54:34-1 — Transfers taxableThe $500 threshold, what is taxed for residents and nonresidents, the three-year presumption, and joint property. Statute text as compiled by Justia (2025); read October 16, 2026.
- N.J.S.A. 54:34-2 — Transfer inheritance tax ratesThe Class C brackets for transfers on or after July 1, 1988 and the Class D rates. Statute text as compiled by Justia (2025); read October 16, 2026.
- N.J.S.A. 54:34-4 — ExemptionsLife insurance paid to a beneficiary other than the estate, charitable and public transfers, federal annuities, and qualified plans payable to a surviving spouse. Statute text as compiled by Justia (2025); read October 16, 2026.
- IRS — What's new, Estate and gift taxThe $15,000,000 basic exclusion amount for 2026 under Public Law 119-21. Page last reviewed July 23, 2026; read October 16, 2026.
- Wikimedia Commons — Yellow house in Oldwick, New JerseyPhoto by Tomwsulcer, taken October 2, 2013, released under the CC0 1.0 public domain dedication. Cropped and used as this page's photo.