Inheritance Tax by State 2023

Iowa

In Iowa, heirs must pay 15 percent taxes to the state when receiving assets from a deceased loved one. Beneficiaries do not have to pay an estate tax. All six states with inheritance tax mandates including Iowa exempt spouses. In some cases, the six states taxing heirs also exempts immediate relatives in full or in part. Persons must file inheritance tax forms within nine months.

Maryland

Beneficiaries must pay a 10 percent inheritance tax, which is a separate rate as the estate levy. However, lineal heirs are exempt, but the related tax form deadline is nine months.

This state also is the only remaining inheritance tax states that has a tiered estate tax structure. The lowest estate levy starts against amounts of at least $40,000 and works its way up to more than $10 million. Estate tax rates range from .8-16 percent depending on total property value according to 2017 data.

Kentucky

Here, heirs pay up to 16 percent inheritance tax but no estate taxes. Kentucky’s tax isn’t tied to federal tax requirements. As of 2017, lineal heirs (natural descendants such as mother, child, father or grandchild) descendants are exempt. However, non-related persons and other people connected to the family might have to pay taxes on inherited assets. The state gives heirs 18 months to file inheritance tax forms and offers a 5 percent discount if page within half that time.

Nebraska

This state’s 18 percent tax it requires heirs to pay makes it the highest tax bill of six states with inheritance tax laws. Not everyone pays this amount, however. Lineal heirs only pay one percent, and Nebraska places the highest levy on people not related to the deceased. Heirs have 12 months to fill out and submit tax forms.

New Jersey

This state’s 16 percent rate calculates as the second highest inheritance tax rate. NJ phased out inheritance taxes around the same time Delaware discontinued its estate tax in early 2018. In 2017, this state still offered estate value credits of up to $2 million. Heir tax forms must be filled out and submitted within eight months.

Pennsylvania

Beneficiaries pay 15 percent of inheritance value in this state. This state requires no estate tax. By the way, more states started doing away with levying either inheritance or estate taxes since 2005. Pennsylvania was the first-ever states with inheritance tax levies. Heirs have nine months to complete related inheritance tax forms. This state offers a 5 percent discount if paid in three months.