03 Jun Will I owe taxes on this inheritance from N.Y.?

Q. My cousin, who lived in New York, died in 2020. She left me $97,000. I live in New Jersey. Will I have to pay any inheritance tax on this money, either federal or state?
— Beneficiary

A. We’re sorry to hear about your cousin.

Let’s review how the inheritance tax works.

New Jersey has an inheritance tax that is imposed on property owned by a New Jersey resident, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

It’s also imposed on non-residents who own tangible personal property or real property that’s passed to passing to anyone other than a spouse, parents or lineal descendants, including children, grandchildren and step-children, but not step-grandchildren, Whitenack said. These are referred to as Class A beneficiaries.

The tax rates for non-Class A beneficiaries range from 11% to 16%, she said.

“New York does not have an inheritance tax but it does have an estate tax which is imposed on the estates of New York residents whose taxable estates exceed $5,93 million in 2021,” Whitenack said. “Since the reader inherited property from a New York resident that is neither tangible personal property or real property, the New Jersey inheritance tax would not apply.”

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This story was originally published on June 3, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.