Bill Text: NJ A4908 | 2024-2025 | Regular Session | Introduced
Bill Title: Eliminates transfer inheritance tax for step-grandchildren.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced) 2024-10-17 - Introduced, Referred to Assembly Judiciary Committee [A4908 Detail]
Download: New_Jersey-2024-A4908-Introduced.html
Sponsored by:
Assemblyman PAUL KANITRA
District 10 (Monmouth and Ocean)
Co-Sponsored by:
Assemblyman Inganamort
SYNOPSIS
Eliminates transfer inheritance tax for step-grandchildren.
CURRENT VERSION OF TEXT
As introduced.
An Act eliminating the transfer inheritance tax for step-grandchildren and amending R.S.54:34-2.1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.54:34-2.1 is amended to read as follows:
54:34-2.1. The transfer of property passing to any child to whom the decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided such relationship began at or before the child's fifteenth birthday and was continuous for ten years thereafter, shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent born in lawful wedlock.
The transfer of property passing to a stepchild of a decedent, or the issue of any stepchild of a decedent, shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent, or the issue of any child of said decedent, born in lawful wedlock.
This section shall apply to the estate of every decedent, whether the said decedent died prior to June second, one thousand nine hundred and thirty-seven, or shall die after said date, but this section shall not entitle any person to a refund of any tax paid prior to said date.
(cf: R.S.54:34-2.1)
2. This act shall take effect January 1, 2025.
STATEMENT
This bill eliminates the State's transfer inheritance tax for the step-grandchildren of a decedent by treating step-grandchildren the same as a decedent's stepchildren and grandchildren under the New Jersey Transfer Inheritance Tax Act, R.S.54:33-1 et seq.
Currently, step-grandchildren are treated as Class D beneficiaries under subsection d. of R.S.54:34-2 because they do not fall within any of the other statutory classes of beneficiaries (Classes A and C; subsections a. and c.) set forth in that section of law. As Class D beneficiaries, step-grandchildren of a decedent are subject to a transfer inheritance tax of: 15 percent on any property transfer of an amount up to $700,000; and 16 percent on any property transfer in excess of that amount.
By contrast, the grandchildren of a decedent, being the "issue of any child or legally adopted child of a decedent," are classified as Class A beneficiaries under subsection a. of R.S.54:34-2, and thus are not subject to any transfer inheritance tax pursuant to the provisions of that section of law. Transfers to stepchildren are likewise treated as Class A beneficiaries and exempt from any transfer inheritance tax under R.S.54:34-2.1.
Under the bill, step-grandchildren, i.e., the issue of any stepchild of a decedent, would be treated like stepchildren and grandchildren with respect to a decedent's property transfer, and thus be considered Class A beneficiaries subject to no taxation.
