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, who are currently classified as Class A beneficiaries and exempt from the tax. The new legal language specifies that the transfer of property to step-grandchildren, defined as the issue of any stepchild of a decedent, will be taxed at the same rates and with the same exemptions as property transfers to children born in lawful wedlock.

Currently, step-grandchildren are classified as Class D beneficiaries, subjecting them to a transfer inheritance tax of 15% on amounts up to $700,000 and 16% on amounts exceeding that threshold. This bill aims to rectify this disparity by ensuring that step-grandchildren are treated equally to other beneficiaries, thereby exempting them from the transfer inheritance tax. The act is set to take effect on January 1, 2025.