Estate and inheritance tax

State estate and inheritance taxes
Almost half of the states in the US impose estate and/or inheritance taxes. Among the states there is wide range in the asset levels subject to tax, and these levels are often subject to change. In general, if the estate asset value is higher than the exemption amount an estate tax return must be filed, even if allowable deductions reduce the estate value below the threshold exemption amount. Inheriting spousal beneficiaries (with the exclusion of a non-citizen spouse) and charitable beneficiaries are generally exempt from tax.

Inheritance tax is not based on the estate's asset level, but is based on the beneficiaries' relationship to the deceased estate owner. Often spouses (and in some states same-sex partners) are not subject to the tax. Children beneficiaries are exempt in some states, and when subject to the tax, are usually taxed at low rates. The tax is usually imposed on sibling beneficiaries and other more distant familial beneficiaries, or upon unrelated beneficiaries. Charitable beneficiaries are exempt from the tax. Similar to the federal estate tax, state estate and inheritance tax returns generally must be filed nine months after the death of the estate owner. Note that both Maryland and New Jersey impose both estate and inheritance taxes.

The state's imposing estate and inheritance taxes are illustrated in the map to the right and are included in the table below. Because estate and inheritance taxes are subject to frequent change, a link to each state's most relevant estate tax webpage is provided. Also included are links to a summary of each state's estate and inheritance tax, courtesy of the Nolo legal site.