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What should an executor know about filing inheritance tax?

On Behalf of | Oct 19, 2021 | Probate |

Inheritance tax is an important aspect of an executor’s duties when handling an estate. Not every situation will require this tax, but it is your job as executor to know if you must pay it and then to make payment.

The Official Site of the State of New Jersey explains prior to January 2018, you would have to pay the inheritance tax if the estate has a value of $2 million or more.  However, the law changed, now the state does not impose the tax any longer. With that in mind, though, you may have to file a waiver.

When to file

If you must file a waiver, you must complete the proper filing documents within nine months of the death of the estate holder. You will need to use a paper return. You cannot file a waiver electronically.

What to file

You can file an affidavit and self-executing waiver form IT-L-8. You need to file the waiver with all the financial institutions connected to the estate. This includes any institution handling all financial items, such as stocks or savings and checking accounts.

You will also file an affidavit for resident decedent requesting real property tax waiver for real property or form IT-L-9. You must file this form with the Division of Taxation.

If the person was not a resident of the state, then you would need to file form IT-NR and form IT-L-9 NP with the Division of Taxation for property held within the state.

As the executor, you need to make sure to file the proper waivers. You may have issues if you fail to file the right documents within the right timeline.