Property taxes are the highest in the country — and the SALT rules just changed
New Jersey has the highest property taxes in the United States, and for years the federal deduction for them was capped at just $10,000. That cap has now risen: under the 2026 rules the SALT deduction cap is $40,000 for married couples filing jointly, in place through 2029.
There is a catch. The higher cap phases out above $500,000 of modified adjusted gross income (MAGI), and unless the law changes again it reverts to $10,000 in 2030. So the relief is real, temporary, and income-dependent — exactly the kind of window that rewards planning.
Where an adviser helps: timing income, deductions and large one-off events so you capture the higher cap while it lasts — and are not caught by the phase-out or the 2030 reversion.
The retirement-income exclusion is a cliff, not a slope
New Jersey lets many retirees exclude a large share of their pension, IRA and 401(k) income from state tax. For couples aged 62 or older, the exclusion can be worth up to $100,000 of retirement income.
But it works as a cliff. You only qualify if your total income is at or below $150,000. Go one dollar over, and the exclusion can disappear entirely — it does not taper, it vanishes. A small, avoidable bump in income can cost a household thousands.
Where an adviser helps: managing the income that lands in a given year — withdrawal order, Roth conversions, capital-gains timing — so you stay on the right side of the $150,000 line.
Your Social Security can quietly become taxable
New Jersey does not tax Social Security benefits — usually. The exemption holds only while your gross income is $100,000 or less for a married couple filing jointly.
Above that threshold, other income can pull your Social Security into the taxable column at the state level. It is another reason the total picture of income in a year matters more than any single source.
Where an adviser helps: coordinating the rest of your income so Social Security stays exempt where possible, rather than being taxed as a side-effect of a busy income year.
The "exit tax" is a myth — but it still costs people sleep
Plenty of New Jerseyans believe the state charges an "exit tax" for leaving. It does not. There is no separate tax for moving out of New Jersey.
What does exist is a withholding at the point you sell property: the state collects the greater of your estimated gain multiplied by the New Jersey tax rate, or 2% of the sale price. It is a prepayment, not a penalty — and it is refundable if you overpaid when you file. Understanding that turns a panic into a cash-flow question.
Where an adviser helps: planning the sale and the filing so the withholding is estimated correctly, your cash flow is ready for it, and any overpayment comes back to you.
No estate tax — but an inheritance tax that blindsides families
Good news first: New Jersey repealed its estate tax in 2018, so there is no longer a state estate tax. Many families stop worrying there — and that is the mistake.
New Jersey still has an inheritance tax, and who you leave money to changes everything. Spouses, children, grandchildren and parents (Class A) pay nothing. Siblings (Class C) are taxed on amounts above a $25,000 exemption. Nieces, nephews, friends and other non-relatives (Class D) pay 15–16% with almost no exemption at all.
The same bequest can be tax-free or heavily taxed depending solely on the relationship of the person receiving it.
Where an adviser helps: structuring who receives what — and how — so a gift to a sibling, niece, nephew or friend is not quietly cut by the inheritance tax.
Life insurance can sidestep the inheritance tax
Here is a planning point that follows directly from the last one. Life insurance proceeds paid to a named individual are exempt from New Jersey inheritance tax.
For someone who wants to leave money to a sibling, niece, nephew or friend — the very people the inheritance tax hits hardest — a properly arranged policy can deliver the intended amount without the Class C or Class D tax taking a bite.
Where an adviser helps: deciding whether life insurance is the right vehicle to pass wealth to Class C or D heirs, and making sure it is owned and named correctly to stay exempt.
The federal exemption is huge right now — which is itself a deadline
At the federal level, the estate and gift tax exemption is now $15 million per person, or $30 million per couple, with a $19,000 annual gift exclusion per recipient.
For most families that removes federal estate tax as an immediate worry. But large exemptions have a habit of changing with the political weather, and today’s generous numbers are the backdrop against which lifetime gifting and trust decisions are best made now rather than later.
Where an adviser helps: using today’s exemption and annual exclusion deliberately — gifting, trusts, and timing — so a future change in the rules does not catch you flat-footed.
This guide is general information, not financial, tax or legal advice. Figures are current for the 2026 tax year and may change — verify against the cited sources and your own circumstances before relying on them.