Estate and Inheritance Tax by State: 2026 Guide

Most states have no estate or inheritance tax. Only 16 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.

In This Guide

• The Difference That Decides Who Pays
• States With an Estate Tax
• States With an Inheritance Tax
• What About the Other States?
• Frequently Asked Questions
• Learn More

Estate and Inheritance Tax by State: The Difference That Decides Who Pays

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. Relationship is the main test, but it isn't always the only one. In some states an heir's age, or the size of what they inherit, can zero out the bill on its own.2

So an estate tax cares about the size of the estate. An inheritance tax cares about the relationship of the heir. Maryland is the only state that layers both.4 Most states have neither.

The federal estate tax is its own separate thing, sitting on top of all of this. For deaths in 2026 the federal basic exclusion amount is $15 million per decedent, raised to that figure by Public Law 119-21 and scheduled to be increased for inflation for any decedent dying in a calendar year after 2026. The top bracket of the federal rate table is taxed at 40 percent. It is not an allowance measured against the estate alone: the tax is figured on the total of transfers made during life and at death, so lifetime taxable gifts consume the exclusion before the estate does.1 A state estate or inheritance tax can still fall on an estate that owes nothing federally.1 The federal tax is filed on IRS Form 706, which allows a deduction for estate or inheritance taxes paid to a state.1

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.

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. The table below shows the 2026 exemption and top rate for each of the 12 states, lowest exemption first, so you can see the range at a glance. Each figure is transcribed from that state's own 2026 estate-tax authority.5,6,7,8,9,10,4,11,12,13,14,15

The range is striking: Oregon taxes estates above $1 million while Connecticut, which ties its exemption to the federal figure, exempts everything under $15 million.5,15 Rate and exemption don't move together, either. Washington pairs a modest exclusion with a top rate that moved twice in about a year: 35 percent on the portion of an estate above $9 million for deaths from July 1, 2025 through June 30, 2026, then back down to 20 percent on that same portion for deaths on or after July 1, 2026. Connecticut and Maine sit at the high-exemption end yet cap out at 12 percent.9,13 Washington's exclusion turns on the date of death the same way: the Department of Revenue set it at $3,076,000 for deaths between January 1 and June 30, 2026, and $3,000,000 for deaths on or after July 1, 2026. The Department says that figure is not set to increase going forward, because the CPI written into the statute has expired.9 A few of these exemptions rise each year: Maine adjusts its exclusion for inflation annually, New York's basic exclusion amount is indexed, Rhode Island's threshold is indexed by the Division of Taxation, and Connecticut's tracks the federal figure.13,14,6,15 Others are flat statutory amounts that catch more estates as asset values rise: Oregon's $1,000,000 is not indexed, Hawaii froze its exclusion at the 2017-era federal figure, Maryland's $5,000,000 has applied to every death since January 1, 2019, and Massachusetts sets both its $2,000,000 threshold and its $99,600 credit in statute with no indexing provision.5,12,4,7

Oregon has the lowest exemption of the twelve. Its estate tax starts at $1 million, and that figure is not indexed for inflation, so it doesn't rise as prices do.5 Note where the line actually falls: a return must be filed once the gross estate reaches $1,000,000, so an estate sitting exactly on the line still has to file, even though the tax itself is charged only on the amount above it.5 Oregon's rates run from 10 percent to 16 percent, and the exemption is not portable between spouses.5 Oregon does honor the federal unlimited marital deduction, though, so most married couples owe no Oregon estate tax at the first death.5 At the other end, states like Connecticut and New York set exemptions in the millions. So a mid-sized estate that clears Oregon's $1 million line but falls well under a multi-million-dollar exemption elsewhere can owe Oregon tax while owing nothing in most of the country.5 Read your state guide for the exact threshold.

A second thing an exemption does not always mean: an estate under the line at death. Several of these states add lifetime gifts back before the threshold is tested, so an estate that looks clear on the day of death is not necessarily clear. Illinois applies its $4,000,000 threshold after adjusted taxable gifts are included, and the Attorney General's own worked example is a decedent with an estate of $3,000,100 and adjusted taxable gifts of $1,000,000, which owes $28 of Illinois estate tax.10 New York generally adds back taxable gifts made in the three-year period ending on the date of death that are not already in the federal gross estate, except gifts made while a nonresident or of out-of-state real or tangible property.14 Vermont's filing test adds back adjusted taxable gifts from the two years before death. Its tax falls on the "Vermont taxable estate."11 Connecticut reaches furthest back of all: its taxable estate includes every Connecticut taxable gift made during calendar years beginning on or after January 1, 2005.15 Giving assets away does not by itself move them outside these taxes.

Massachusetts is a reminder that an "exemption" is not always a slice carved off the top. An estate owes no Massachusetts estate tax if the federal taxable estate is not more than $2,000,000, but above that line Massachusetts computes the tax on the whole of the amount subject to Massachusetts estate tax, from the Internal Revenue Code § 2011 credit-for-state-death-taxes table, and then reduces the result by a credit of up to $99,600, so a Massachusetts estate that crosses the threshold is not taxed on the excess alone.7

States With an Inheritance Tax

A few notes on that list. Iowa used to belong here, but it does not anymore: Iowa fully repealed its inheritance tax for deaths on or after January 1, 2025, after phasing the rates down each year from 2021 through 2024, so no Iowa inheritance or estate tax applies to any death in 2025 or later.3 That repeal is why the list above holds five inheritance-tax states rather than six. Maryland appears here too, because it's the only state with both an estate tax and an inheritance tax.4 Maryland's guide lives with its estate tax, so that link points there.

Pennsylvania shows how the relationship sets the rate. Its death tax on an ordinary estate is the inheritance tax, which runs in tiers: 0 percent to a surviving spouse, 4.5 percent to direct descendants and lineal heirs such as children, grandchildren, parents, and grandparents, and to a son- or daughter-in-law, 12 percent to siblings, and 15 percent to everyone else, except charitable organizations, exempt institutions and government entities.16 There is a second 0 percent tier that's easy to miss, and it runs in either direction: a transfer between a parent and a child aged 21 or younger is taxed at 0 percent, not the 4.5 percent that applies to parents and children otherwise.16 If you are a parent inheriting from a child who died at 21 or younger, the 4.5 percent line is not your rate. There's no relationship-blind exemption threshold, so the rate applies from the first dollar based on who's inheriting, though specific transfers are exempt: property owned jointly between spouses, certain farm land and other agricultural property transferred to eligible recipients for deaths after June 30, 2012, and personal property from the estate of a serving military member who died of an injury or illness received on active duty, for deaths on or after September 6, 2022.16 Pennsylvania does also keep an estate tax on the books, but only as a pick-up tax: 72 P.S. section 2117 imposes it solely where a federal estate tax is payable and the inheritance tax actually paid to the Commonwealth is less than the maximum credit for State death taxes allowable under section 2011 of the Internal Revenue Code of 1986, and it equals that difference.16

All five states set the rate primarily by the heir's relationship, though the exact rates and exempt classes differ. In all five, a surviving spouse pays nothing: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.16,4,17,2,18 New Jersey exempts a surviving civil-union partner on the same footing as a spouse, and exempts parents, grandparents, children including a legally adopted child, the issue of any child, and a step-child of the deceased outright as well.18 One New Jersey trap sits inside that list: the issue of a step-child are Class D, not Class A.18 New Jersey also keeps a fifth class, Class E, for the State and its subdivisions and for qualifying educational, religious, charitable, benevolent, scientific, and literary institutions. Transfers to those bodies carry an exemption, which is why the Division of Taxation's rate schedule prices Class A, Class C, and Class D only. The exemption does not extend to a like institution of another state that does not grant an equal and like exemption to New Jersey's.18 Nebraska adds an age test on top of its classes: an interest passing to a person under twenty-two years of age is not subject to the tax at all, whichever class that person would otherwise fall into.2 Maryland's exempt list is wide. A spouse, child, grandchild, great-grandchild, stepchild, parent, stepparent, grandparent, sibling, a child's spouse, and a registered domestic partner all pay no Maryland inheritance tax, and the flat 10 percent of clear value falls only on more distant or unrelated heirs. Even then, nothing is owed on property passing to any one person if the total value does not exceed $1,000.4 Kentucky sorts heirs into three classes. Class A is fully exempt and pays nothing no matter how large the inheritance; the two more distant classes pay 4 to 16 percent and 6 to 16 percent, after a per-heir exemption of $1,000 for Class B and $500 for Class C.17 Kentucky widened Class A in 2026: for a death on or after January 1, 2026 it covers a spouse, parent, child, grandchild, brother, sister, half-brother, half-sister, and a niece or nephew, including a niece or nephew of the half blood, who were moved out of Class B by 2026 Ky. Acts ch. 198, sec. 40.17 For a death before that date, a niece or nephew was Class B.17 Check your own state's guide before assuming a close relative owes nothing.

Dollar thresholds matter as much as class. Even inside a taxable class, some of these states let an heir receive a set amount before any rate applies. Nebraska is the clearest example. For deaths on or after January 1, 2023, an immediate relative or sibling takes the first $100,000 free and pays 1 percent above it; an uncle, aunt, niece, or nephew, their descendants, and those people's spouses take the first $40,000 free and pay 11 percent above it; and everyone else takes the first $25,000 free and pays 15 percent above it.2 New Jersey exempts $25,000 for siblings and for a child's spouse or widow or widower, then charges 11 percent on the next $1,075,000, 13 percent on the next $300,000, 14 percent on the next $300,000, and 16 percent above $1,700,000, while its most distant heirs get no general exemption and pay 15 percent on the first $700,000 and 16 percent above that.18 Pennsylvania is the outlier, with no relationship-blind exemption threshold at all.16 So a modest inheritance from a sibling is exempt outright in Kentucky, can come out at zero in Nebraska, and is still taxed from the first dollar in Pennsylvania.17

Estate and Inheritance Tax by State: What About the Other States?

Thirty-four 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 applies in every state. Its exclusion is $15 million per decedent for 2026 deaths, and lifetime taxable gifts count against it, so only very large estates owe it.1

Second, Medicaid estate recovery. If a person received Medicaid-funded long-term care, the state can recover those costs from the estate after death. Federal law starts from a prohibition: no recovery of medical assistance correctly paid on a person's behalf may be made, except that the state must seek recovery in three cases. That doesn't mean nothing else can be reached: benefits paid incorrectly are pursued another way, by a lien under the judgment of a court, which the timing limits below do not govern.19 The first is a recipient who was 55 or older when they received the assistance: there the state recovers for nursing facility services, home and community-based services, and related hospital and prescription drug services, and it may also elect to recover for any other item or service under its Medicaid plan, apart from Medicare cost-sharing and certain related benefits federal law carves out.19 The second is a person whose real property the state may place a lien on: an inpatient of a nursing facility, intermediate care facility, or other medical institution who must put all but a small personal-needs allowance of their income toward care, and whom the state has determined, after notice and an opportunity for a hearing, cannot reasonably be expected to be discharged and return home.19 That lien power has its own limit: no such lien may be placed on the home while the person's spouse, a child under 21 or blind or permanently and totally disabled, or a sibling with an equity interest in the home who lived there for the year before the admission, is lawfully living in it, and the lien dissolves if the person is discharged and returns home.19 The third is a person whose assets were disregarded because of a long-term care insurance policy, for long-term care services, unless they're covered by a qualified state partnership.19 So age 55 is not a safe harbor, and in a state that takes the broader option, recovery is not limited to long-term care. It happens in every state, and it is not a tax.

Federal law also fences the recovery in. It can be made only after the death of a surviving spouse, and only when there is no surviving child who is under 21 or who is blind or permanently and totally disabled, and every state must have a process to waive recovery where it would cause undue hardship.19 Where the state has placed a lien on the home, it also cannot recover while a sibling who lived in the home for at least a year before the person entered the institution, or a son or daughter who lived there for at least two years before that and provided the care that let the person stay at home instead of moving into one, is still lawfully living there and has been ever since.19 That after-death sibling test is not the lien bar above: here the sibling needs no equity interest, only the year of residence before the admission and lawful residence ever since.19 Read Medicaid estate recovery if long-term care was part of the picture.

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.