Most states have no estate or inheritance tax. Only about 17 do, and most families never owe either one. But the rules vary sharply by state, and the difference between a state that taxes estates and one that taxes heirs can cost your family real money.

This guide explains the estate and inheritance tax landscape state by state: the four distinct concepts, which 12 states tax estates, which 5 tax heirs, and where your state falls. Pick your state for the details.

Estate Tax vs Inheritance Tax: The Difference

These two terms get used as if they mean the same thing. They don't. The difference decides who pays and how much.

An estate tax is charged on the estate itself, before anything is handed out. The estate's total value is added up, an exemption is subtracted, and the estate pays tax on whatever is left. Heirs receive their share after the tax is settled. Who the heirs are doesn't change the bill.

An inheritance tax works the other way. It's charged on each heir, based on what that heir receives and how they were related to the person who died. A surviving spouse usually pays nothing. A child usually pays little or nothing. A distant relative or a friend can pay a real rate. The same inheritance, split between two heirs, can be taxed at two different rates.

So an estate tax cares about the size of the estate. An inheritance tax cares about the relationship of the heir. A handful of states layer both. Most states have neither.

The federal estate tax is its own separate thing, sitting on top of all of this. For 2025 the federal basic exclusion amount is $13.99 million per person, set by the IRS and indexed each year, with a top rate of 40 percent. Because that exemption is so high, the large majority of estates owe no federal estate tax, even when they owe a state tax in a state with a much lower threshold. The federal estate tax is filed on its own form and calculated independently of anything your state does.

States With an Estate Tax

Twelve states plus Washington, D.C. charge a state estate tax. The estate pays it before heirs receive their inheritance. Each state sets its own exemption, and the exemptions range widely, so an estate that owes nothing in one state can owe tens of thousands in another.

Here are the 12 states with an estate tax. Pick yours for the exemption amount, the rates, and the filing rules.

The exemption is the number that matters most. It's the value an estate can reach before any tax is owed. Some states set it close to the federal level. Others set it far lower.

Oregon has the lowest. Its estate tax kicks in at just $1 million, one of the lowest thresholds in the country, and that figure is not indexed for inflation, so it doesn't rise as prices do. Oregon's rates run from 10 percent to 16 percent, and the exemption is not portable between spouses. At the other end, states like Connecticut and New York set exemptions in the millions. A $1.5 million estate that owes nothing in most of the country can owe Oregon tax. Read your state guide for the exact threshold.

States With an Inheritance Tax

Five states charge an inheritance tax. The heir pays it, and the rate depends on the relationship to the person who died. Close relatives usually pay nothing. More distant heirs pay more.

A few notes on that list. Iowa is phasing its inheritance tax out, with full repeal for deaths on or after January 1, 2025, so check your state guide for the current status. Maryland appears here too, because it's the only state with both an estate tax and an inheritance tax. Maryland's guide lives with its estate tax, so that link points there.

Pennsylvania shows how the relationship sets the rate. Pennsylvania has no estate tax, but its inheritance tax runs in tiers: 0 percent to a surviving spouse, 4.5 percent to direct descendants and lineal heirs such as children, grandchildren, and parents, 12 percent to siblings, and 15 percent to everyone else. There's no general exemption, so the rate applies from the first dollar based on who's inheriting.

That tier structure is the pattern across all five states, even though the exact rates differ. Spouses are almost always exempt. Children are usually exempt or taxed at the lowest rate. The further an heir sits from the immediate family, the higher the rate climbs. Maryland, for instance, exempts a long list of close relatives entirely and charges a flat 10 percent only on more distant or unrelated heirs. If you're a spouse or child inheriting in one of these states, you very likely owe nothing. Confirm it in your state guide.

What About the Other States?

Roughly 33 states have neither an estate tax nor an inheritance tax. If you live in one of them, your estate passes to your heirs with no state death tax taken out. That's the situation for most Americans.

Two things still apply, though, even in a no-tax state.

First, the federal estate tax. It doesn't care which state you live in. An estate above the federal exemption owes federal estate tax anywhere in the country. For nearly everyone that exemption is far out of reach, but very large estates owe it regardless of state.

Second, Medicaid estate recovery. If a person received Medicaid-funded long-term care, the state can recover those costs from the estate after death. This happens in every state, and it's not a tax. It's a repayment of care the state paid for. It's worth understanding before it surprises a family, so read Medicaid estate recovery if long-term care was part of the picture.

So "no estate or inheritance tax" doesn't mean nothing can touch the estate. It means the two state death taxes don't apply.

Frequently Asked Questions

Probably not. Most states, roughly 33 of them, have neither an estate tax nor an inheritance tax. Twelve states plus Washington, D.C. charge an estate tax, paid by the estate. About five states charge an inheritance tax, paid by the heirs. Maryland is the only state with both. Find your state in the lists above, then open its guide for the exact rules.

An estate tax is charged on the estate itself before anything is distributed. The estate's value is totaled, an exemption is subtracted, and the estate pays tax on the rest. An inheritance tax is charged on each heir, with the rate set by how that heir was related to the person who died. Spouses and children usually pay little or nothing on an inheritance tax; distant relatives pay more.

Almost certainly not. The federal estate tax has a basic exclusion amount of $13.99 million per person for 2025, indexed each year, so the large majority of estates owe nothing federally. Only very large estates exceed that threshold. The federal estate tax is separate from any state estate or inheritance tax and is calculated on its own.

No. Medicaid estate recovery is not a tax. It's how a state recoups what it spent on a person's Medicaid-funded long-term care by claiming against the estate after death. It happens in every state, regardless of whether the state has an estate or inheritance tax. It's a repayment of care costs, not a tax on the value of the estate. See our Medicaid estate recovery guide for how it works.

Generally your state of residence at death sets the rules, but property can pull in another state too. If you own real estate or tangible property in a state with an estate or inheritance tax, that state may tax the property located there even if you lived elsewhere. This is one reason to check the rules of every state where you hold property, not just your home state.

Learn More

Find personalized help understanding your state's estate and inheritance tax rules at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.