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S3858
SENATE, No. 3858
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MARCH 10, 2026
Sponsored by:
Senator� ROBERT W. SINGER
District 30 (Monmouth and Ocean)
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.