The unthinkable has happened. The state of New Jersey actually passed legislation that will phase out the estate tax.
Currently, New Jersey has one of the lowest estate tax exemptions in the country at $675,000. The federal estate tax exemption is over $5 million, and the exemption of most other states is at least $1 million or more.
Not anymore. Governor Chris Christie signed legislation that will require New Jerseyans to pay more at the gas pump in exchange for a huge tax break for retirees (among other things too).
Legislation signed by Gov. Chris Christie on Friday raising the gasoline tax 23 cents per gallon included $1.4 billion in tax cuts he called tax relief for “working New Jerseyans of all income levels, senior citizens, military veterans and property owners.”
That includes a five-fold increase in the income tax break for retirees. Right now, married couples filing jointly can get out of paying any state income tax for their first $20,000 in retirement income. That will jump to $100,000 by 2020.
…The limit for a married couple filing jointly will jump from $20,000 to $40,000 in 2017, to $60,000 in 2018, to $80,000 in 2019 and $100,000 in 2020. For a married person filing separately, it will gradually increase from $10,000 to $50,000, and for an individual filing as a single taxpayer, from $15,000 to $75,000
.… The tax break applies to residents 62 and older.
This legislation is great news for NJ retirees. But will it last?
I call this “Lazarus Legislation”….. For those familiar with the biblical story, Lazarus was the man who rose from the dead. While the NJ state government insists the estate tax will be “dead” in 2018, it will likely come back to life in the next few years.
Let’s just hope it doesn’t come back at the original cap of $675,000. If it returns, maybe it will at least match the federal estate tax exemption at $5.45 million- which would be better than our current situation.
We’ll have to stay tuned for the long-term status of this NJ retirement incentive. But in the meantime, it’s a step in the right direction, so let the Taylor Ham soar!