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Monthly Archives: October 2016

NJ Child Support

NJ Child Support Obligation Termination

A new NJ Child Support Termination Law Becomes Effective February 1, 2017. Governor Christie signed S-1046/A-2721 into law on January 19, 2016. The new legislation establishes 19 as the age when NJ child support and/or medical support obligation shall end. This law will be effective February 1, 2017 and will apply to all child support orders. However, child support may continue up to age 23 if: (1) the child is in high school; (2) attending full-time college, vocational or graduate school; (3) is disabled; (4) if the parties reach an agreement; or (5) if support is granted by the Court. Furthermore, if your Final Judgment of Divorce or support order specifies a termination date other than the child’s 19th birthday, the termination date in the court order/Final Judgment of Divorce will be enforced.

Families that have a child:
1) Over the age of 22 ¾ as of February 1, 2017 shall receive a Notice of NJ Child Support Obligation Termination. This notice will indicate that child support will end on May 1, 2017 (and not the child’s 19th birthday).

2) Between the ages of 22 ½ and 22 ¾ as of February 1, 2017 will be mailed a Notice of NJ Child Support Obligation Termination on February 1, 2017 with child support terminating on August 1, 2017.

3) Between the ages of 18 ½ and 22 ½ as of February 1, 2017 will be mailed a Notice of Proposed Child Support Obligation Termination on February 1, 2017, with child support ending August 1, 2017.

4) If the dependent turns 19 after August 1, 2017 you will receive a Notice of Proposed NJ Child Support Obligation Termination 180 days before your child’s 19th birthday. If there is no response, a second notice shall be sent out. If no continuation or request is filed, the support obligation will end as of the child’s 19th birthday.

This Notice will have information as to how to request a continuation of child support as well as how to modify a NJ child support obligation. Furthermore, in cases in which there are arrears after child support is terminated, the noncustodial parent will still be responsible for paying off those child support arrears.

It is extremely important to respond if you wish to oppose termination. An application or motion may be filed with the Court if you receive an updated order, wish to oppose it, or wish to adjust child support.

We encourage all individuals to review their child support and medical support obligations with their attorneys in light of the new legislation that will be in effect February 1, 2017.

NJ estate tax

New Jersey estate tax law changes

On Friday October 14, 2016, Governor Christie signed into law a comprehensive tax package with important tax cuts including the phasing out of the New Jersey estate tax. Specific to the estate tax, the legislation provides that the current $675,000 exemption from state estate tax will be increased to $2 million on January 1, 2017, and on January 1, 2018, the New Jersey estate tax will be completely eliminated. It is crucial to note that the inheritance tax (a tax on bequests to non-lineal descendants, i.e. individuals who are not children, grandchildren and their descendants) remains intact.

The other New Jersey estate tax breaks are as follows:

1. Over four years beginning on January 1, 2017, the current exclusions from income tax on retirement income increase from

a. $20,000 to $100,000 for joint filers;
b. $15,000 to $75,000 for individuals;
c. $10,000 to $50,000 for married couples who file separately.

2. The state sales tax decreases from the present 7% to 6.875% in 2017 and then to 6.625% in 2018.

3. The earned income tax credit, which is available to the working poor, will increase from 30% to 35% of the federal credit.

4. Veterans who were honorably discharged from service will receive a personal exemption from income tax equal to $3,000.

The quid pro quo for these tax cuts is a 23 cents per gallon increase in the gasoline tax.

The repeal of the New Jersey estate tax could ease the anxiety of long-time New Jersey residents who have contemplated moving out of state because they want to preserve an inheritance for their children. The new legislation significantly increases the amount of wealth that will be shielded from estate taxation in 2017 and by January 1, 2018, the New Jersey estate tax will be eliminated.

Accordingly, we would encourage all individuals to review their estate planning, including their wills and trusts, with their attorneys in light of these significant changes. If you do not have an estate plan, now is the time to schedule a consultation with an estate attorney to formulate a plan. For clients who have had trusts set up, a review with an attorney is recommended to find out if your current plan has sufficient flexibility in an environment of no New Jersey estate tax.