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October 17th, 2016
New Jersey Proposes Estate Tax Repeal
In a joint appearance on September 30, 2016, Governor Chris Christie and legislative leaders announced a bipartisan agreement to repeal the New Jersey Estate Tax.
The repeal is part of the tax package increasing the gasoline tax and dedicating those revenues to transportation infrastructure following the recent Hoboken train accident.
New Jersey is currently one of 19 states that imposes an estate tax. As other states have moved to increase their estate tax exemption, New Jersey has kept the exemption at $675,000, the lowest in the country.
Under the proposal, the exemption is to increase to $2,000,000 for the year 2017, and the estate tax is to be repealed beginning in 2018.
Upon enactment of the proposal, New Jersey will compare favorably to states such as Florida, Texas and California for estate tax planning purposes. In the northeast, states retaining an estate tax include New York, Connecticut, Massachusetts, Vermont, Maine, Maryland and Delaware. Pennsylvania continues to impose an inheritance tax.
The estate tax savings will be significant. Currently, the New Jersey estate tax on a $1,000,000 estate is $33,200, on a $2,000,000 estate is $99,600, and on a $5,000,000 estate is $391,000. For estates that exceed the Federal estate tax exemption of $5,450,000 (increasing to $5,490,000 in 2017), the combined top rate of estate tax will drop from 49.6% to 40%, a savings of 9.6%.
The New Jersey inheritance tax is not mentioned in the announcement, and presumably will remain in effect. However, since the reforms of Governor Kean in 1985, that tax has been limited to transfers to persons other than a spouse, descendant or ancestor.
If you have questions about the repeal of the New Jersey estate tax, or about other estate and tax planning matters, please contact Joseph Mahon at (212) 826-5564 or firstname.lastname@example.org, Barbara Shiers at (212) 826-5526 or email@example.com, Linda Wank at (212) 826-5546 or firstname.lastname@example.org, H. Sujin Kim at (212) 705 4828 or email@example.com, or any other member of the Frankfurt Kurnit Estate Planning & Administration Group.
Other Estate Planning Law Alerts
Is Now the Time to Revisit Your Estate Plan?
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. The Act temporarily doubles the estate, gift and generation-skipping transfer ("GST") tax exemption amount.
January 4 2018
IRS Proposes Rules to Deny Estate and Gift Tax Discounts for Family Businesses
There's important news for family business owners and their heirs.
August 23 2016
Recent Estate Tax Changes Create Planning Opportunities
On April 1, 2016, the New York State ("NYS") estate tax exclusion amount increased to $4,187,500, further narrowing the gap between the NYS estate tax exclusion amount and the Federal estate, gift and generation-skipping transfer ("GST") tax exemption amounts ($5,450,000 as of January 1, 2016).
April 25 2016