26 Dec I’m a ‘Class C’ beneficiary. Will I have to pay inheritance tax?
Q. Is the $25,000 inheritance tax exclusion for each beneficiary or for all those in Class C?
A. Let’s go over how the New Jersey inheritance tax works.
The tax is based on the relationship of the beneficiary to the decedent.
Class A beneficiaries are excluded from the inheritance tax. These include a parent, grandparent, spouse, child of a decedent and others.
Class C beneficiaries — the type you’re asking about — include a brother or sister of a decedent, a spouse or surviving spouse of a child of a decedent and a civil union partner, said Kenneth Bagner, a certified public accountant with Sobel and Co. in Livingston.
He said each beneficiary is responsible for whatever taxes are owed, depending on the amount of the inheritance.
The first $25,000 inherited is tax-free, Bagner said.
The next 1.075 million is taxed at 11%, the next $300,000 is taxed at 13%, the next $300,000 after that is taxed at $14% and anything over $1.7 million is taxed at 16%, Bagner said.
Note that Class D beneficiaries are anyone not included in Classes A, C, or E, including nieces and nephews, and Class E includes qualified charities, religious institutions, educational and medical institutions, non-profit benevolent or scientific institutions, the State of New Jersey or any of its political subdivisions.
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This story was originally published on Dec. 26, 2022.
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