Does your state have inheritance taxes?

18 Sept 2023 · 1 min

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1:01

In this brief explanatory segment, Jerry Taylor clarifies the difference between estate tax (paid by the deceased's estate) and inheritance tax (paid by the beneficiary). He then enumerates the six U.S. states that still impose an inheritance tax, providing the current tax rate ranges and noting any special conditions. Iowa’s tax (2‑4%) is slated for repeal by 2025. Kentucky’s rates range from 4% to 16%. Maryland uniquely imposes both an estate tax and a 10% inheritance tax, though many close relatives are exempt. Nebraska’s rates vary from 1% to 15% depending on the heir’s relationship to the decedent. The segment serves as a concise guide for viewers to identify whether their state levies an inheritance tax and what rates may apply.

Chapters

Does your state still have an inheritance tax? Only 6 states still do, and you're about to find out which ones. Inheritance tax differs from estate tax. Estate tax is paid by the deceased person's estate. Inheritance tax is paid by the person who receives the inheritance. And the first state on our list is Iowa. Good news for those of you in Iowa is that it's going to be repealed by 2025. But right now, Iowa estate tax ranges between 2 to 4% of the inheritance depending on the amount and your relation to the person who died. The next state, Kentucky. Kentucky's inheritance tax ranges from 4% to 16%. Next, Maryland. Maryland is the only state in the country with an inheritance tax and an estate tax. The inheritance tax is 10%, but there are a lot of exemptions if you are a close relation to the person who died. Next up, Nebraska. Nebraska's tax ranges from 1% to 15% based on your relation to the decedent.