Maine Estate Tax: Exemption and Rate Guide

Maine starts taxing estates at $7 million, far below the federal line, then climbs through three tiers from 8 percent to 12 percent.

That low threshold means an estate can owe Maine nothing in federal tax and still owe the state. This guide covers who pays, how the tiers work, and how Maine's tax differs from the federal estate tax and from Medicaid estate recovery.

In This Guide

• Maine Estate Tax at a Glance
• How the Maine 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

Maine Estate Tax at a Glance

Here is the whole picture in one place. The numbers below are for deaths in 2025.

The line that matters is the $7 million exclusion. Maine indexes it for inflation, so it creeps up most years; it was $6.8 million for 2024. Maine has no separate inheritance tax, so heirs are not taxed on what they personally receive.

How the Maine Estate Tax Works

The estate tax is paid by the estate, out of the deceased person's assets, before heirs are paid. It applies only to value above the exclusion.

The exclusion. For 2025, the first $7 million of a Maine taxable estate passes tax free. The exclusion is indexed for inflation, so confirm the current year's figure rather than assuming last year's number still holds.

The tiered rates. Above the exclusion, Maine applies three brackets: 8 percent on the first slice of value over the line, 10 percent on the next, and 12 percent on the highest amounts. Only the value above the exclusion is taxed, and only the portion in each band is taxed at that band's rate.

Filing. An estate above the exclusion files Form 706ME with Maine Revenue Services. A return can also be required when a federal estate tax return must be filed, even in some cases below the state line. The Maine Revenue Services estate tax page carries the current forms, the year's exclusion, and the bracket breakpoints.

If your estate is near or over $7 million, this is the point to bring in an estate attorney. The gap between Maine's $7 million line and the much higher federal one is exactly where smart planning, trusts, and gifting can keep an estate under the state threshold.

Estate Tax vs. Inheritance Tax

People use these terms 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. Maine has this one.
• An inheritance tax is paid by each heir on what they personally receive, often at a rate that depends on how closely related they are. Maine does not have this one.

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

The Federal Estate Tax Is Separate

Maine'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.

Maine is exactly that kind of state. Its $7 million exclusion is about half the federal figure, so an estate between roughly $7 million and $14 million can owe Maine estate tax while owing the IRS nothing. That gap catches families who assumed the high federal number was the only line that mattered.

This Is Not Medicaid Estate Recovery

Families often confuse the estate tax with Medicaid estate recovery, but they are unrelated.

Estate recovery is how a state seeks repayment from the estate of someone who received long-term-care Medicaid, typically 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 Maine 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 process works.

Next Steps

If your estate is comfortably under $7 million, Maine's estate tax is not your concern. If you are near or over the line, plan ahead, because the state line is much lower than the federal one.

• Add up the whole estate, including life insurance, retirement accounts, and real estate, and compare it to the current $7 million exclusion.
• Watch the indexing, since the exclusion changes most years and the band breakpoints move with it.
• See an estate attorney if you are near or over the line. The gap between Maine's threshold and the federal one is where planning pays off.

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

• Maine Senior Property Tax Relief
• Maine 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 Maine 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.