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Death Of The Estate Tax And Other New Jersey Tax Changes

Written by The Fein Print Category:

By Heidi I. Hansen and Steven A. Loeb

Estate Tax Phase-out
Say goodbye to New Jersey Estate Taxes! A new law just signed by the governor phases-out the New Jersey estate tax. For decedents dying during 2017, the exclusion amount will be increased from $675,000 to $2 million. The new law also makes slight adjustments to the estate tax brackets for 2017. Decedents dying after December 31, 2017, will not have to pay any New Jersey estate tax. Note: The inheritance tax was unchanged by the new law and it remains in effect. 

Given the change in the law, now would be an ideal time for you to review your estate planning documents to make sure they still meet your needs. If you have any questions about your current estate planning documents or if you would like us to review your documents, please contact us.

Other Tax Changes
As you have undoubtedly heard, the new law also increased the gas tax by 23 cents (which will likely go in effect on November 1, 2016) in addition to changing other tax laws. We have highlighted the other tax changes made by the new law below.

Sales Tax Reduction
Beginning January 1, 2017, the sales tax will be reduced from 7% to 6.875% and will be furthered reduced 6.625% on January 1, 2018.

Retirement Income Exclusion
The personal income tax’s pension and retirement income exclusion will be increased over four years as follows:

Filing Status

2017

2018

2019

2020

Joint

$40,000

$60,000

$80,000

$100,000

Individual

$30,000

$45,000

$60,000

$75,000

Separate

$20,000

$30,000

$40,000

$50,000

However, if a taxpayer has gross income of more than $100,000, the above exclusions are not allowed.

Exemption for Veterans
Certain veterans will be allowed a $3,000 exemption. To qualify for the exemption, a veteran must have been honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States (or one of their reserve units) or the National Guard of New Jersey in a federal active duty status.

Earned Income Tax Credit Increase
New Jersey residents who qualify for the federal earned income tax credit are currently eligible for a New Jersey earned income credit equal to 30% of the federal credit. Beginning in 2016, that amount will increase to 35% of the federal earned income tax credit.

For more information please contact via email Steven A. Loeb, Esq. or by phone at 973-538-4700 ext. 229.

Fein, Such, Kahn & Shepard, P.C. is general practice law firm of more than 50+ attorneys serving clients in New Jersey and New York. For over 25 years the firm has offered innovative solutions to businesses and individuals in the areas of asset protection business planning, civil litigation, creditor representation in the areas of foreclosure, bankruptcy and collections, elder law, family law, personal injury, tax, and trusts and estates. For more information, go to www.feinsuch.com.

This Article does not constitute legal advice nor create an attorney-client relationship.

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