June 19, 2012

States with Estate Taxes, Inheritance Taxes or Gift Taxes

I've discussed estate taxes before but I have really only been talking about the federal level.   At the federal level only millionaires need to worry about estate taxes.   But theres also state taxes to worry about and some states also have state level estate or inheritance taxes they impose which are separate from the federal estate tax.    28 states do not have estate or inheritance taxes.   22 states and D.C. impose some form of estate or inheritance tax.

Each state that has these taxes has varying rules about exemptions and tax rates, so you have to look at the laws for the individual state to see if theres a liability.   For most cases you do not hit estate taxes at the state level unless you have an estate worth more than $1 million in value, but there are exceptions.  Inheritance taxes in Indiana can be levied for estates as little as $100 depending on the situation.

I found a nice Survey of State Estate, Inheritance, and Gift Taxes written by the state of Minnesota.   The document is from November 2011 so this information is dated but its always going to be a moving target with individual state occasionally making changes to laws.

Here's a quick summary of which states levy estate, inheritance and/or gift taxes.

States with Estate Taxes - 14 states & DCConnecticut
Delaware
District of Columbia
Hawaii
Illinois
Maine
Massachusetts
Minnesota
New York
North Carolina
Ohio
Oregon
Rhode Island
Vermont
Washington

States with Inheritance Taxes – 6 StatesIndiana
Iowa
Kentucky
Nebraska
Pennsylvania
Tennessee

States with Both Estate and Inheritance Taxes – 2 StatesMaryland
New Jersey

States with Gift Taxes – 2 StatesConnecticut
Tennessee


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