The federal government has an estate tax that applies to estates that are worth a significant amount. New Jersey used to have an estate tax but it was phased out. In 2017 the exemption from the New Jersey estate tax was $2,000,000.00. Beginning January 2018, there is no New Jersey estate tax, although there are rumors that it may return in the future.
The federal estate tax applies to those decedent’s estates that are worth a substantial amount. The exemption from the federal estate tax was $11,700,000.00 in 2021. For a married couple, the exemption in 2021 from the federal estate tax was $23,400,000.00.
Beginning January 1, 2022, the exemption for a single person, as well as a married couple, has increased. The exemption from the federal estate tax for a single individual is now $12,060,000.00. The federal estate tax exemption for a married couple is now $24,120,000.00.
The exemption from the federal estate tax also applies to the gift tax. A single individual can gift up to $12,060,000.00 during his or her lifetime without incurring a gift tax liability. The exemption for a married couple from a gift tax is $24,120,000.00. If more than the exemption is provided as lifetime gifts then there may be a gift tax liability owed to the IRS.