Hawaii Estate Tax: Exemption and Rate Guide

Hawaii froze its estate tax exclusion at $5.49 million while the federal exemption climbed past $13 million.

On top of that frozen line sits the highest state estate-tax rate in the country, 20 percent. This guide covers who pays, how the graduated rates work, and how Hawaii's tax differs from the federal estate tax and from Medicaid estate recovery.

In This Guide

• Hawaii Estate Tax at a Glance
• How the Hawaii Estate Tax Works
• Estate Tax vs. Inheritance Tax
• The Federal Estate Tax Is Separate
• This Is Not Medicaid Estate Recovery
• Frequently Asked Questions
• Next Steps

Hawaii Estate Tax at a Glance

Here is the whole picture in one place.

The key quirk is the exclusion. Hawaii set it at $5,490,000 and left it there, so it does not track the much higher federal exemption. Hawaii has no separate inheritance tax, so heirs are not taxed on what they personally receive.

How the Hawaii Estate Tax Works

The estate tax is paid by the estate, out of the deceased person's assets, before heirs are paid. Hawaii layers a graduated rate on top of a fixed exclusion.

The fixed exclusion. The first $5,490,000 of a Hawaii estate passes tax free. Hawaii froze this figure rather than letting it rise with the federal exemption, so the gap between the two grows wider every year the federal number is indexed upward.

The graduated rates. Above the exclusion, Hawaii's estate tax climbs through brackets from 10 percent up to 20 percent. The top 20 percent rate applies to the portion of a taxable estate above $10 million, and it is the highest state estate-tax rate anywhere in the country.

Married couples. Planning tools such as trusts and how each spouse's estate is structured can affect how much of the $5,490,000 exclusion a couple ultimately uses. Whether Hawaii allows a surviving spouse to use a deceased spouse's unused exclusion, and the filing required to preserve it, is a question for the Hawaii Department of Taxation or an estate attorney.

Filing. Hawaii estate tax is reported on Form M-6 with the Hawaii Department of Taxation. The Form M-6 instructions lay out the exclusion, the brackets, and the filing requirements.

Because the top rate reaches 20 percent and the exclusion is frozen low relative to the federal line, larger Hawaii estates can face a serious bill. If your estate is near or over $5.49 million, talk to an estate attorney. Trusts, spousal planning, and lifetime gifting all change the exposure to that 20 percent top bracket.

Estate Tax vs. Inheritance Tax

These two terms get used interchangeably, but they are different taxes paid by different people.

• An estate tax is paid by the estate. It comes off the top before heirs receive anything. Hawaii has this one.
• An inheritance tax is paid by each heir on what they personally receive, often at a rate set by the relationship. Hawaii does not have this one.

So Hawaii has exactly one state death tax, the estate tax, and the estate settles it. If you inherit from a Hawaii estate, you do not owe Hawaii a separate inheritance tax on your share.

The Federal Estate Tax Is Separate

Hawaii's estate tax sits alongside a completely separate federal estate tax. The two are filed and calculated independently.

For 2025, the federal basic exclusion is $13,990,000 per person and the top federal rate is 40 percent, filed on IRS Form 706. Because that federal exemption is so high, the large majority of estates owe no federal estate tax even when they owe a state estate tax in a state with a much lower exemption.

Hawaii's frozen $5.49 million exclusion is the clearest example of the gap. It is roughly $8.5 million below the federal figure, so an estate between $5.49 million and $13.99 million can owe Hawaii estate tax while owing the IRS nothing. The state line, not the federal one, is what most Hawaii families need to plan around.

This Is Not Medicaid Estate Recovery

Families often confuse the estate tax with Medicaid estate recovery. They are separate processes.

Estate recovery is how a state seeks repayment from the estate of someone who received long-term-care Medicaid, usually by claiming against the home after death. It has nothing to do with the estate's size or the estate tax exclusion. A modest estate that owes zero Hawaii estate tax can still face a recovery claim, and a large taxable estate that never used Medicaid faces none. Our explainer on Medicaid estate recovery covers how that works.

Next Steps

If your estate is comfortably under $5.49 million, Hawaii's estate tax is not your concern. If you are near or over it, plan early, because the exclusion is frozen low and the top rate is the nation's highest.

• Add up the whole estate, including life insurance, retirement accounts, and real estate, and compare it to the $5.49 million exclusion.
• Plan as a couple with an estate attorney, since how the two estates are structured affects how much of the exclusion you use.
• See an estate attorney if you are near or over the exclusion. With a 20 percent top rate, planning can meaningfully cut the bill.

For the bigger financial picture, our guide to building a senior care funding plan ties taxes, benefits, and care costs together, and if a home is part of the estate, selling or renting a home for care covers that trade-off.

Learn More

• Hawaii Senior Property Tax Relief
• Hawaii Retirement Income Tax
• Which States Have an Estate or Inheritance Tax
• Building a Senior Care Funding Plan
• Selling or Renting a Home for Care
• Medicaid Estate Recovery

Find personalized help understanding the Hawaii estate tax and your family's plan 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.