When is New Jersey inheritance tax due, and what happens if I pay late?

The Division of Taxation says the executor, administrator or heir-at-law of the estate must file an Inheritance Tax return, if one is required, within eight months of the decedent's death. The executor guide says any tax must be paid within eight months after the date of death or the estate will incur a 10 percent annual interest charge on unpaid tax. Count from the date on the death certificate, not from the date letters were issued.

The Division's filing page says interest is calculated at the annual rate of 10 percent on any direct tax, or portion of it, not paid within eight months. Form IT-EXT allows an extension to file, but the page is blunt that there is no extension of time to pay tax due, and interest still applies to any unpaid tax. It also says electronic filing is not available for Inheritance and Estate Tax returns, so plan time for mailing. The executor guide says payments are usually posted within two weeks of receipt.

Not every estate owes tax, but many still file. The executor guide says that if there are any Class C, D or E beneficiaries, you will need to file a full return, even when no tax turns out to be due. If every beneficiary and the estate are exempt, the guide points the executor to Form L-9, which is filed with the Inheritance and Estate Tax Branch to receive the waiver for real estate. New Jersey no longer has an estate tax for people who died on or after January 1, 2018.

A sale can raise the cash to pay the tax, but the waiver process runs on its own clock. The guide says that once a return is filed, processing should take at least several months, and returns that are audited take longer. If the closing date in your contract comes before the waiver, ask for an extension in writing. Estate attorneys deal with this regularly and can tell you what the Division is doing now.

Because interest runs from the eight-month mark, some estates prefer to sell without waiting for a retail buyer. Kaizen Home Buyers makes cash offers on New Jersey houses as-is, with no repairs and no agent commission. We can give an offer within 24 hours and close in 14 to 30 days or on the date the estate chooses. Call 267-329-0084. An agent listing can still be the better route if the house is in good condition and there is time. Check the numbers with your attorney first.