This bill amends the New Jersey Transfer Inheritance Tax Act to eliminate the transfer inheritance tax for step-grandchildren of a decedent. It reclassifies step-grandchildren, treating them the same as stepchildren and grandchildren, which allows them to be considered Class A beneficiaries. The legal language inserted into the current law specifies that the transfer of property to a stepchild or the issue of any stepchild will be taxed at the same rates and with the same exemptions as property transfers to a child born in lawful wedlock.

Currently, step-grandchildren are classified as Class D beneficiaries and are subject to a transfer inheritance tax of 15% on property transfers up to $700,000 and 16% on amounts exceeding that threshold. By reclassifying step-grandchildren as Class A beneficiaries, the bill ensures that they will not be subject to any transfer inheritance tax, aligning their treatment with that of stepchildren and grandchildren. The act is set to take effect on January 1, 2025.