Inheritance Tax and Estate Terms for Understanding
Understanding what individual states do and do not do starts with grasping the various terms related to inheritance tax and estate tax and what they mean for you.
States Without Death Taxes
There are 33 states that do not impose an inheritance tax or estate tax: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, Wyoming.
States That Impose Inheritance or Estate Tax
Many states impose only one tax – either an inheritance tax or an estate tax. Maryland is the only state that imposes both.
States That Have Repealed Inheritance Taxes
Seven states have repealed inheritance taxes since 2010. Kansas and Oklahoma repealed inheritance taxes by legislative action effective January 1, 2010. North Carolina also repealed its inheritance tax on January 1, 2010, but reinstated it one year later. It then repealed the tax again retroactively to January 1, 2013. The inheritance tax in Ohio was repealed effective January 1, 2013, according to Ohio state budget laws. Tennessee phased out its inheritance tax in 2016. Delaware repealed its death tax effective January 1, 2018. New Jersey phased out its inheritance tax in 2018.
Other Changes to Death Taxes by State
Hawaii: Hawaii enacted its inheritance tax effective May 1, 2010. Then in May 2012, the state amended its laws to define the inheritance tax exemption in Hawaii based on the federal estate tax exemption for decedents who died after January 25, 2012.
Illinois: Inheritance taxes were repealed in Illinois on January 1, 2010, although they were reinstated on January 1, 2011. The inheritance tax exemption was raised twice, stabilizing at $4 million effective January 1, 2013.
Indiana: Indiana enacted laws in 2012 that will result in the gradual repeal of the inheritance tax by 2022. The inheritance tax exemption was increased from $100,000 to $250,000 for some family members effective January 1, 2012. However, the inheritance tax in Indiana was retroactively repealed to January 1, 2013, in May 2013.
Maine: The inheritance tax exemption in Maine was raised to $6.01 million for 2022.
Maryland: Maryland signed the Inheritance Tax/Unified Credit Law on May 15, 2014. The law repealed the inheritance tax in Maryland and reimplemented it in such a way that the exemption increases. It was changed to $5 million in 2019.
Minnesota: In July 2013, Minnesota amended its inheritance tax laws as they apply to non-residents owning property there. This legislation included properties in Minnesota owned by pass-through entities such as corporations, partnerships, and limited liability companies, or non-resident property. Then, under legislation signed in March 2014, the state’s inheritance tax exemption was increased retroactively to $1.2 million for all deaths occurring in 2014. The inheritance tax rate was amended so that dollars
Source: https://www.thebalancemoney.com/states-without-estate-tax-3505467
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