You can now add Connecticut, New York and New Jersey to the growing list of states trying to keep its retiring residents from fleeing to states with a lower or no state estate tax bill at death. Effective April 1, 2017, New York state increased their exclusion amount, the amount of property that could pass free of any New York state estate tax, from $1.00 million to $5.25 million. On January 1, 2019, the New York state exclusion amount will increase again and equal the federal exemption amount.
Not to be left behind, in the fall of 2017, the states of Connecticut and New Jersey also made significant changes to their state estate tax exemptions. In 2018, the Connecticut estate tax exemption amount will rise from $2 million per person to $2.60 million and will match the federal exemption amount on January 1, 2020. In New Jersey, retroactive to January 1, 2017, the New Jersey estate tax exemption rose from $675,000 per person to $2.00 million. The New Jersey estate tax will be eliminated entirely on January 1, 2018. It is important to note that the New Jersey inheritance tax, a tax levied on inheritances passing to siblings, nieces, nephews and other unrelated individuals, is not impacted by this change in the law. As a result, bequests to certain beneficiaries may still be subject to inheritance tax.
