1) Nested static class doesn’t need reference of Outer class but non
static nested class or Inner class requires Outer class reference. You
can not create instance of Inner class without creating instance of
Outer class. This is by far most important thing to consider while
making a nested class static or non static.
2) static class is actually static member of class and can be used in
static context e.g. static method or static block of Outer class.
3) Another difference between static and non static nested class is that you can not access non static members e.g. method and field into nested static class directly. If you do you will get error like “non static member can not be used in static context”. While Inner class can access both static and non static member of Outer class.