Division of Taxation offers explanation of estate tax changes for NJSBA

By NJSBA Staff posted 02-23-2018 10:42


The New Jersey Division of Taxation provided the following information to the NJSBA about the latest changes to the state’s estate tax.

“New Jersey estate tax has gone through another change for 2018 as a result of Bill A-12. The Division of Taxation has been receiving a lot of communications requesting clarification on the new requirements. Most notably have been calls from financial institutions stating that estates and their attorneys have been telling the banks that the tax has been repealed and waivers are no longer required. This is incorrect.

The division wishes to pass on the following information:

o Bill A-12 did not repeal the Estate Tax law. It provided that for 2018 the tax rate is zero, but made no other amendments to the existing law.

o New Jersey Inheritance Tax has not changed and remains in effect.

o The statutory lien on decedent’s assets remains for both taxes. Therefore, the waiver requirement remains.

By way of explanation, even had the estate tax been fully repealed, the inheritance tax waiver requirements would still have remained.

o Waivers, as before, come in two forms. One of these must be presented to financial institutions or transfer agents in order to release assets:

 Form 0-1, which is the formal release issued by the division. This is obtained by filing a return with the division.

 Form L-8, which is the self-executing waiver completed by the estate. This may only be used by Class “A” beneficiaries (when assets do not pass into a trust and no disclaimer has been filed). The only difference now is that the size of the estate no longer matters for decedents who die on or after Jan. 1, 2018. An updated L-8 is being posted which reflects this change.

All filing requirements for inheritance tax remain in effect. The director has waived any return filing requirements for New Jersey estate tax for decedents who die on or after Jan. 1, 2018 (so long as the current law remains in effect). An updated L-9 (for real estate waivers) will be posted shortly as well.

As always, the Division of Taxation would be happy to answer any questions or address any concerns you may have. Please contact our Inheritance and Estate Tax Hotline at 609-292-5033 and an auditor will assist you.”

In other tax-related news, the New Jersey Supreme Court released the report of its committee on the Tax Court for review and comment. Find the report here.