Most Americans will never owe federal estate tax. The 2026 federal exemption is $15 million per person, and almost no estate comes close. But your state may have its own death tax, and it may start much lower.
Thirteen jurisdictions (twelve states and Washington, D.C.) tax the estate itself. Five states tax the people who receive an inheritance. One state, Maryland, does both. Everywhere else, nothing extra is due at the state level.
This guide gives you the full 2026 list in tables, explains the difference between an estate tax and an inheritance tax, shows how nonresident property and domicile affect the bill, and flags the rules that change the most. Where figures are indexed or were recently changed by legislation, I say so.
For 2026, twelve states and D.C. charge an estate tax (Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington). Five states charge an inheritance tax (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania). An estate tax is paid by the estate. An inheritance tax is paid by the person who receives the assets. The federal estate tax exemption is $15 million, and there is no federal inheritance tax.
Estate Tax vs Inheritance Tax: The Difference
People mix these up constantly, and the difference decides who writes the check.
| Feature | Estate tax | Inheritance tax |
|---|---|---|
| Who pays | The estate, before assets are distributed | Each beneficiary, on what they receive |
| What sets the bill | The total size of the estate above an exemption | The beneficiary’s relationship to the deceased |
| Spouses | Usually deducted via the marital deduction | Exempt in every inheritance tax state |
| Federal version? | Yes ($15 million exemption in 2026) | No |
| States using it | 12 states plus D.C. | 5 states |
A third tax is easy to forget: income tax. Inherited cash and property are generally not income to the heir under federal law, but there are exceptions, covered below. For definitions of related terms, see our beginner's tax glossary.
Which state's rules apply?
Two facts drive the answer:
- The deceased's state of residence (domicile) generally decides which state's estate or inheritance tax applies to most assets.
- Real estate and tangible property located in a state can be taxed by that state, even if the owner lived elsewhere.
The heir's home state usually doesn't matter. A Florida resident who inherits from a Pennsylvania parent can owe Pennsylvania inheritance tax. A Pennsylvania resident who inherits from a Florida parent generally owes none.
The Federal Backdrop for 2026
Before the state list, here's the federal baseline from the IRS:
- Federal estate tax exemption: $15 million per person for deaths in 2026 (made permanent by the One Big Beautiful Bill Act, then indexed for inflation). See Revenue Procedure 2025-32.
- Top federal estate tax rate: 40% on amounts above the exemption.
- Annual gift tax exclusion: $19,000 per recipient in 2026.
- Filing: Estates above the exemption must file Form 706. Gifts above the annual exclusion are reported on Form 709.
- Federal inheritance tax: None.
The key point: state exemptions are often a fraction of the federal one. An estate worth $4 million owes nothing federally but may owe real money in Oregon, Massachusetts, Minnesota, or Washington.
For the broader federal picture, see our guide to US individual taxes in 2026 and how federal and state income tax fit together.
2026 Estate Tax by State: Full List
These are the jurisdictions that tax the estate itself. Exemptions and rates are for deaths in 2026 unless noted. The figures come from the Tax Foundation's state estate and inheritance tax table, cross-checked against state sources where I could verify them. Indexed amounts can change, so confirm the figure for the date of death with your state's revenue department.
| State | 2026 exemption | Rate range | Notes |
|---|---|---|---|
| Connecticut | $15,000,000 | 12% flat | Matches the federal exemption; capped by design |
| Hawaii | $5,490,000 | 10% to 20% | |
| Illinois | $4,000,000 | 0.8% to 16% | No federal-style portability |
| Maine | About $7,160,000 | 8% to 12% | Indexed to inflation |
| Maryland | $5,000,000 | 0.8% to 16% | Also has an inheritance tax |
| Massachusetts | $2,000,000 | 0.8% to 16% | |
| Minnesota | $3,000,000 | 13% to 16% | |
| New York | $7,350,000 | 3.06% to 16% | Has a “cliff” (see below) |
| Oregon | $1,000,000 | 10% to 16% | Lowest exemption in the country |
| Rhode Island | About $1,838,056 | 0.8% to 16% | Indexed to inflation |
| Vermont | $5,000,000 | 16% flat | |
| Washington | $3,000,000 (deaths on or after July 1, 2026) | 10% to 20% | Rules changed recently (see below) |
| Washington, D.C. | About $4,988,400 | 11.2% to 16% |
Washington: a recent change worth knowing
Washington's estate tax has been in flux. The legislature raised the exclusion to $3 million and boosted the top rate to 35% for deaths on or after July 1, 2025. Then Senate Bill 6347, signed March 24, 2026, restored the earlier rate structure:
| Date of death | Exclusion | Rate range |
|---|---|---|
| July 1 to December 31, 2025 | $3,000,000 | 10% to 35% |
| January 1 to June 30, 2026 | $3,076,000 | 10% to 35% |
| July 1, 2026 and later | $3,000,000 | 10% to 20% |
If you read an older chart showing "10% to 20%" or "10% to 35%," the date of death decides which one applies. The Washington Department of Revenue publishes the current tables.
New York's cliff
New York's basic exclusion is $7,350,000 for 2026. But it phases out sharply. If the taxable estate exceeds 105% of the exclusion (about $7,717,500), the exclusion disappears and the whole estate is taxed, not just the excess. An estate just over the line can owe far more than one just under it. The New York Department of Taxation and Finance explains the calculation. Charitable gifts or lifetime transfers can sometimes help estates near the threshold, so this is a conversation for an estate attorney.
States that repealed or never had one
- New Jersey repealed its estate tax for deaths after 2017. It still has an inheritance tax.
- Delaware also repealed its estate tax.
- Iowa doesn't tax inheritances for deaths on or after January 1, 2025.
Don't call New Jersey, Delaware, or Iowa estate tax states in 2026.
2026 Inheritance Tax by State: Full List
Five states tax what heirs receive. Rates depend on the heir's relationship to the deceased, grouped into classes. Spouses are exempt in all five, and charities are generally exempt.
| State | Spouse | Children and descendants | Siblings and more distant relatives | Exemptions and notes |
|---|---|---|---|---|
| Kentucky | Exempt | Exempt (Class A) | Class B (nieces, nephews, etc.): 4% to 16%. Class C (others): 6% to 16% | Class B (nieces, nephews, etc.): 4% to 16%. Class C (others): 6% to 16% |
| Maryland | Exempt | Exempt | 10% flat for non-exempt heirs | $1,000 exemption; also has an estate tax |
| Nebraska | Exempt | 1% above $100,000 (Class 1) | 11% (Class 2); 15% (Class 3) | Beneficiaries under 22 exempt for recent deaths |
| New Jersey | Exempt | Exempt (Class A) | Class C (siblings, in-laws): 11% to 16% above $25,000. Class D (others): 15% to 16% | Charities exempt |
| Pennsylvania | 0% | 4.5% | 12% for siblings; 15% for others | No general exemption |
Sources: Pennsylvania Department of Revenue, New Jersey Division of Taxation, Nebraska Department of Revenue, Kentucky Department of Revenue, and the Comptroller of Maryland. Details can vary by asset type, family farm exemptions, and recent amendments, so verify with the state before filing.
A worked example: one bequest, four heirs
Say a Pennsylvania resident leaves $400,000 to one person. The bill depends entirely on who that person is.
| Heir | Rate | Tax |
|---|---|---|
| Surviving spouse | 0% | $0 |
| Adult child | 4.5% | $18,000 |
| Sibling | 12% | $48,000 |
| Friend or unrelated heir | 15% | $60,000 |
Same dollars, a $60,000 swing. That's why beneficiary designations and relationship classes matter so much in these five states.
Iowa's repeal
Iowa phased out its inheritance tax. According to the Iowa Department of Revenue, it no longer applies to deaths on or after January 1, 2025, so Iowa shouldn't appear on a 2026 list.
States With Neither Tax
If a state isn't in the lists above, it has no state estate tax and no state inheritance tax in 2026. That includes California, Texas, Florida, Arizona, Colorado, and the rest not named. Legislatures can change this, so recheck before you rely on it.
Don't confuse this with income tax. A state can have no income tax and still have an estate tax, or the reverse. Our guides to states with no income tax in 2026, state income tax in 2026, Texas income tax, and California income tax rates cover that side separately.
Quick Comparison: Which States Start Lowest?
Sorted by exemption, from the lowest 2026 threshold:
| Rank | State | Exemption |
|---|---|---|
| 1 | Oregon | $1,000,000 |
| 2 | Rhode Island | About $1.84 million |
| 3 | Massachusetts | $2,000,000 |
| 4 | Washington | $3,000,000 (recent deaths) |
| 5 | Minnesota | $3,000,000 |
| 6 | Illinois | $4,000,000 |
| 7 | D.C. | About $4.99 million |
| 8 | Maryland | $5,000,000 |
| 9 | Vermont | $5,000,000 |
| 10 | Hawaii | $5,490,000 |
| 11 | New York | $7,350,000 |
| 12 | Maine | About $7.16 million |
| 13 | Connecticut | $15,000,000 |
Example: a $3.5 million estate
A $3.5 million estate owes no federal estate tax. Based on the thresholds above, it could face a state estate tax if the deceased lived in Oregon, Rhode Island, Massachusetts, or Minnesota, and Washington (since it exceeds the $3 million exclusion). It would fall below the exemption in Illinois, Maryland, Vermont, Hawaii, New York, Maine, and Connecticut.
The numbers can shift with deductions (such as the marital deduction), the value of lifetime taxable gifts, and indexing, so treat this as a screening step, not a calculation.
How the Marital Deduction and Portability Work
Married couples
Transfers to a surviving U.S.-citizen spouse are generally deductible from the estate for estate tax purposes. That can defer the tax until the second spouse's death.
The catch: at the federal level, a couple can use "portability" to carry the first spouse's unused exemption to the survivor. Many states don't offer that. In a state with a low exemption, leaving everything outright to the spouse can waste the first spouse's state exemption and expose the survivor's estate to tax later.
Some states offer portability or similar elections and others don't. Illinois, for example, doesn't offer a federal-style portability election. A couple near or above a state threshold should ask an estate attorney to model trust planning rather than assume everything passes tax-free forever.
Inheritance tax states
Spouses are exempt. Children are exempt in Kentucky, Maryland, and New Jersey, taxed at 4.5% in Pennsylvania, and taxed at 1% above $100,000 in Nebraska.
Nonresidents and Out-of-State Property
This catches families off guard.
If someone lives in a state with no death tax but owns real estate or tangible property in a state that has one, that state may tax the property. Examples include:
- A Florida resident with a vacation home in Massachusetts, Oregon, or New York
- A Texas resident who owns rental property in Illinois or Washington
- A retiree who moved to a no-tax state but kept land in the old state
How it works varies by state. Some states tax only the portion of the estate located in the state, using a proportional formula. Others have thresholds for nonresident estates. The practical rule: list every property by state, and check each state's nonresident rules.
Does moving avoid state death taxes?
It can, but only if you genuinely change your domicile. That means more than buying a house. Courts and revenue departments look at where you live most of the year, where you vote, where your driver's license and registrations are, where your doctors and family are, and where your important documents are kept. Even then, in-state real estate can still be taxed by the state where it sits.
For the residency basics, see our guide to US tax residency in 2026, and for a view on how income and wealth taxes differ, see income tax vs wealth tax.
What Heirs Actually Owe: Income Tax, Basis, and Retirement Accounts
Estate and inheritance taxes are one slice. For many families, the bigger tax questions are about income.
Inheritances usually aren't income
Under federal law, money or property you inherit generally isn't taxable income to you. The estate or state inheritance tax is a separate matter.
Stepped-up basis
Inherited property generally receives a new tax basis equal to its fair market value on the date of death. If your mother bought stock for $50,000 and it's worth $500,000 when she dies, your basis is $500,000. Sell it soon after, and you may owe little or no capital gain. This is one reason appreciated assets are often held until death rather than gifted during life, since gifts typically carry the donor's original basis. For capital gains rates, see our guide to capital gains tax rates in 2026.
Inherited retirement accounts are different
Traditional IRA and 401(k) balances don't get a basis step-up. Withdrawals are taxable income to the beneficiary. Most non-spouse beneficiaries must empty the account within ten years of the owner's death, and annual distributions may be required in some cases. Spreading withdrawals over several years can keep you out of higher brackets. The IRS Publication 590-B covers the rules. For more on what's taxable, see what counts as taxable income in the US.
How to Find Out Whether an Estate Owes State Tax
A practical checklist for an executor or family member:
- Identify the deceased's state of residence on the date of death.
- List all assets and where they're located. Include real estate, bank accounts, investments, retirement accounts, business interests, life insurance, and tangible property.
- Estimate the gross and taxable estate. Subtract allowed deductions, such as the marital and charitable deductions.
- Compare the figure to the state's exemption for the date of death (use the tables above as a start, then confirm with the state).
- Check each beneficiary's relationship if the state has an inheritance tax.
- Look at out-of-state property and each state's nonresident rules.
- Confirm filing deadlines. Many returns are due about nine months after death, but extensions and exact dates vary by state, so check the instructions.
- Talk to an estate attorney or CPA if the estate is near or above any threshold.
For state agencies, start with the Massachusetts Department of Revenue, the Oregon Department of Revenue, the Washington Department of Revenue, and the New York Department of Taxation and Finance. Before you meet a professional, it helps to calculate your tax first so the meeting focuses on strategy.
Ways Families Reduce State Death Taxes
These are general ideas, not advice for your situation. Each has legal and tax tradeoffs.
- Annual gifting. The federal annual exclusion is $19,000 per recipient in 2026. Gifts reduce the size of the estate, but some states count prior taxable gifts, and gifts carry the giver's original basis.
- Charitable giving. Charitable bequests are generally deductible and can help estates near a cliff, such as New York's.
- Trust planning for couples. In states without portability, trusts can help use both spouses' exemptions.
- Beneficiary designations. In inheritance tax states, who gets what changes the tax. Beneficiary designations on retirement accounts and life insurance often override the will.
- Changing domicile. Moving to a state without a death tax can help, but only if the move is real and documented, and in-state property may still be taxed.
- Reviewing the plan regularly. Laws changed in Iowa, Washington, and elsewhere. A plan written years ago may be out of date.
Common Mistakes to Avoid
- Checking only the federal exemption. A $15 million federal exemption doesn't protect an Oregon or Massachusetts estate.
- Mixing up estate and inheritance tax. They're levied on different parties under different rules.
- Assuming the heir's state controls. Inheritance tax follows the decedent's residence and the location of real property.
- Ignoring out-of-state real estate. A second home can create a filing obligation in another state.
- Reporting an inheritance as income. That's usually an overpayment.
- Using old charts. Washington, Iowa, and New Jersey show how quickly lists go stale.
- Waiting too long to plan. State estate tax is a planning problem while the owner is alive, not just a filing problem afterward.
- Assuming a spouse's exemption carries over. Many states have no portability.
Why Choose Free Calculator
Death-tax rules change, and a wrong number can cost real money. Here's how we approach it:
- We cite official sources and say plainly when a figure is indexed or recently changed.
- We separate estate tax, inheritance tax, and income tax, because mixing them up leads to mistakes.
- We build free tools to help you estimate before you talk to a professional.
Learn more about Free Calculator, try the income tax calculator or US state income tax calculator, explore advanced free tools, or browse our full blog library.
Frequently Asked Questions
Which states have an estate tax in 2026?
Twelve states plus Washington, D.C.: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. Exemptions range from about $1 million in Oregon to $15 million in Connecticut.
Which states have an inheritance tax in 2026?
Five: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Iowa's inheritance tax no longer applies to deaths on or after January 1, 2025.
What is the difference between an estate tax and an inheritance tax?
An estate tax is paid by the estate before assets are distributed, based on its total size. An inheritance tax is paid by each beneficiary, at a rate that depends on their relationship to the deceased.
What is the federal estate tax exemption for 2026?
It is $15 million per person. The top federal rate is 40% above that amount, and there is no federal inheritance tax.
Which state has the lowest estate tax exemption?
Oregon, at $1 million. Rhode Island and Massachusetts also start low, at about $1.84 million and $2 million.
Which state has the highest inheritance tax rate?
Kentucky and New Jersey top out at 16%. Nebraska and Pennsylvania top out at 15%. Rates depend on the heir's relationship, and spouses pay nothing in any of them.
Do children pay inheritance tax?
It depends on the state. Children are exempt in Kentucky, Maryland, and New Jersey. They pay 4.5% in Pennsylvania and 1% above a $100,000 exemption in Nebraska.
Does the surviving spouse pay inheritance tax?
No. Surviving spouses are exempt in all five inheritance tax states, and transfers to a spouse are generally deductible for estate tax purposes.
Do nonresidents have to pay state estate tax?
They can, if they own real estate or tangible property in a state with an estate tax. Rules vary by state, so check each state where you own property.
Does moving to another state avoid estate tax?
Only if you truly change your domicile, and even then, real estate in a taxing state can still be taxed there.
Is inherited money taxable income?
Generally not for federal income tax purposes. Exceptions include withdrawals from inherited traditional retirement accounts and income the assets earn after death.
When is a state estate tax return due?
Often around nine months after death, but deadlines and extensions differ by state. Check your state's current instructions.
Key Takeaways and Next Steps
- The federal exemption isn't the whole story. State estate taxes can start at $1 million to $5 million.
- Estate tax and inheritance tax are different. One hits the estate. The other hits the heir.
- Residency and property location decide the state. Not the heir's address.
- Check the date of death. Washington's rules, for example, changed in 2025 and again in 2026.
- Use official sources. Indexed amounts change, and old charts go stale.
What to do next:
- List where the person lived and where they own property.
- Compare the estate's likely size to the thresholds above.
- Identify beneficiaries and relationship classes if an inheritance tax state is involved.
- Confirm figures with the state revenue department.
- If you're near a threshold, talk to an estate attorney or CPA about trusts, gifting, and beneficiary designations.
Want to keep going? Explore the advanced free tools at Free Calculator, and read about how direct and indirect taxes differ or IRS audit triggers.