How Will Changes in New Jersey Estate and Income Taxes Affect Residents?

Recent tax law revisions may prove beneficial for New Jersey residents.

Change is not always good.

But it can be.

According to a recent Newsworks article titled “New Jersey deploys tax changes for elderly and veterans in 2017,” this recent tax change in New Jersey is beneficial to many of its state residents.

What does the tax law stipulate?

Retirement income excluded from the states income tax has been raised to $40,000.

This is double the previous exclusion.

It will not stop there.

The number is planned to increase to $100,000 by 2020.

Veterans also get a tax break and low-income workers receive a greater tax credit.

What does this mean?

Many retirees will no longer pay state income taxes on IRA distributions or pensions.

What about "state" estate taxes?

They will be exempt up to $2 million.

By 2018, the "Garden State" state estate taxes will be completely exempt.

Sales tax has decreased marginally from 7 percent to 6.875 percent.

Will New Jersey retain more retirees?

Possibly.

The state still has some of the highest income and real estate taxes in the nation.

Time will tell.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Newsworks (January 2, 2017) “New Jersey deploys tax changes for elderly and veterans in 2017”