Who pays New Jersey inheritance tax?

It depends on the beneficiary's relationship to the person who died. Close relatives (Class A) — spouses, children, grandchildren, and parents — pay nothing. Siblings and children-in-law (Class C) pay after a $25,000 exemption. Other beneficiaries such as nieces, nephews, and friends (Class D) generally pay 15–16%. Charities and government (Class E) are exempt.

What is the NJ inheritance tax rate?

For Class C beneficiaries the first $25,000 is exempt and rates run from about 11% to 16%. For Class D beneficiaries the rate is 15% on the first $700,000 and 16% above that. Confirm specifics with the NJ Division of Taxation.

Does New Jersey have an estate tax?

No. New Jersey repealed its estate tax for deaths on or after January 1, 2018. Only the inheritance tax remains, plus the federal estate tax, which affects only very large estates.

An L-8 is a self-executing inheritance-tax waiver that Class A beneficiaries can use to release a decedent's New Jersey bank or brokerage accounts without filing a full inheritance-tax return.

NJ Executor Guide

New Jersey Inheritance Tax, in Plain English

Who pays, the rates by relationship, the 8-month deadline, and the L-8/L-9 waivers that decide when a bank releases the money.

If you've just been named executor of a New Jersey estate, the inheritance tax is one of the first things that causes confusion — partly because New Jersey is one of only a few states that still has one. Here's how it actually works.

First, the good news: there's no NJ estate tax anymore

New Jersey repealed its separate estate tax for anyone who died on or after January 1, 2018. So for today's estates there is only one New Jersey death tax to think about — the inheritance tax. (A federal estate tax still exists, but it only applies to very large estates in the eight-figure range, so most estates never touch it.)

What the inheritance tax actually taxes

Unlike an estate tax — which is based on the size of the estate — New Jersey's inheritance tax is based on who inherits: specifically, each beneficiary's relationship to the person who died. Close relatives pay nothing; more distant beneficiaries and non-relatives pay a percentage. The executor is responsible for seeing that the tax is reported and paid out of the estate.

Who pays — the beneficiary "classes"

New Jersey sorts beneficiaries into classes. (There is no Class B — it was eliminated years ago.)

Class	Who it covers	Tax
Class A	Spouse or civil-union partner, children and stepchildren, grandchildren, parents, grandparents. (As of the December 2025 regulation update, children conceived via IVF are included.)	Exempt — pays nothing
Class C	Siblings, and a son-in-law or daughter-in-law	First $25,000 exempt, then roughly 11%–16%
Class D	Everyone else — nieces, nephews, cousins, friends, and other non-relatives	15%–16% (no general exemption)
Class E	Qualified charities, religious and educational institutions, and government	Exempt — pays nothing

For most families this is the headline: if everything passes to a spouse and children, the estate usually owes no New Jersey inheritance tax at all.

New Jersey inheritance tax rates

For the beneficiaries who do pay:

Class C (siblings, children-in-law)

The first $25,000 each Class C beneficiary receives is exempt. Above that, the rate begins at 11% and climbs toward 16% on the largest inheritances (the top 16% rate applies only to amounts over roughly $1.7 million).

Class D (other beneficiaries)

There is no general exemption (a single transfer under $500 is exempt). The rate is 15% on the first $700,000 a Class D beneficiary receives, and 16% on anything above $700,000.

Because the exact brackets matter, confirm any specific calculation with the New Jersey Division of Taxation or a CPA.

The 8-month deadline

The New Jersey Inheritance Tax return (Form IT-R) is generally due 8 months after the date of death. Interest can accrue on tax paid late, so this is one of the dates executors watch most closely — and it falls a full month before the 9-month creditor-claim deadline.

The L-8 and L-9 waivers (why the bank froze the account)

When someone dies, New Jersey lets banks and brokerages hold back a portion of the decedent's accounts until the state issues a waiver confirming the inheritance tax has been handled. Two forms come up most often:

L-8 — the self-executing waiver. For Class A (and Class E) beneficiaries, this affidavit can release New Jersey bank and brokerage accounts without filing a full inheritance-tax return. Many straightforward estates use the L-8 and never file a full return.
L-9 — the real-property waiver. The affidavit used to release the state's lien on New Jersey real estate when no tax is due.

As of the December 2025 regulation readoption, waivers are required from all financial institutions. If a bank has frozen an account, a waiver is usually what releases it — your County Surrogate's Court or the NJ Division of Taxation can confirm which form fits your situation.

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This is general information, not advice. ExecutorPilot is an educational resource — not a law firm or a tax advisor — and this page does not interpret your specific situation. Inheritance-tax classes, rates, exemptions, and forms change over time and depend on the facts of each estate. Confirm your beneficiaries' classes and any tax owed with the New Jersey Division of Taxation, a CPA, or a licensed New Jersey attorney before acting. Reflects New Jersey rules current as of the December 15, 2025 regulation readoption.