State Inheritance Tax Calculator

A state inheritance tax calculator determines whether beneficiaries owe tax on assets they inherit and calculates the amount due based on their relationship to the deceased person. Unlike the federal estate tax (which is imposed on the total estate), inheritance taxes are imposed on individual beneficiaries who receive assets. Only six states currently levy an inheritance tax: Iowa (being phased out, fully repealed after 2024), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Tax rates and exemptions depend primarily on the beneficiary's relationship to the decedent, with closer relatives receiving more favorable treatment. Inheritance taxes predate both the federal estate tax and the federal income tax in American history. Pennsylvania enacted the first state inheritance tax in 1826, and by the early 1900s, nearly every state had some form of inheritance or estate tax. The trend has reversed dramatically in recent decades: in 2000, approximately 25 states had inheritance or estate taxes, compared to only 17 states (including the District of Columbia) with either form of death tax today. Iowa became the latest state to repeal its inheritance tax, completing a phaseout in 2024 that began in 2021. The classification system used by inheritance tax states divides beneficiaries into classes based on their relationship to the decedent. Class A (closest relatives: spouse, children, parents, grandchildren) typically receives the highest exemptions and lowest rates (often fully exempt). Class B (siblings, nieces, nephews, sons-in-law, daughters-in-law) faces moderate rates (typically 5-15%). Class C or D (unrelated individuals, friends, distant relatives) faces the highest rates (up to 15-18%). Charitable organizations and governmental entities are generally exempt from inheritance tax regardless of the state. Maryland is the only state that imposes both an estate tax and an inheritance tax, creating a unique double-taxation situation. However, estate taxes paid are typically credited against inheritance taxes owed, preventing full double taxation in most cases. Understanding state inheritance tax obligations is essential for estate planning, particularly when the decedent owned property in multiple states or when beneficiaries reside in different jurisdictions.

Calkulon makes complex calculations simple — built for students and everyday problem-solvers.

1. 1Determine whether the decedent's state of residence imposes an inheritance tax. The inheritance tax applies based on where the deceased person lived (their domicile), not where the beneficiary lives. If a New Jersey resident dies and leaves assets to a beneficiary in Florida, the New Jersey inheritance tax applies even though Florida has no inheritance or estate tax. For real property and tangible personal property located in an inheritance tax state but owned by a non-resident, the state may still impose inheritance tax on those specific assets through ancillary jurisdiction.
2. 2Identify each beneficiary's relationship class under the applicable state's classification system. Each inheritance tax state defines its own relationship classes with corresponding exemptions and rates. Surviving spouses are exempt from inheritance tax in all six states. Children and lineal descendants are exempt in most states (Pennsylvania is a notable exception, taxing transfers to children at 4.5%). Siblings, nieces, nephews, and in-laws typically fall into an intermediate class with moderate rates. Unrelated beneficiaries and distant relatives face the highest rates.
3. 3Calculate the taxable inheritance for each beneficiary by subtracting any applicable exemption from the value of assets received. Exemptions vary significantly by state and beneficiary class. New Jersey provides a $25,000 exemption for Class C beneficiaries and a $500 exemption for Class D. Kentucky provides a $1,000 exemption for Class B beneficiaries and a $500 exemption for Class C. Nebraska provides a $40,000 exemption for immediate family, $15,000 for remote relatives, and $10,000 for unrelated beneficiaries. The value of the inheritance is generally the fair market value of the assets at the date of death.
4. 4Apply the appropriate tax rate to the taxable inheritance amount. Most states use graduated rates within each class, meaning higher inheritance amounts are taxed at progressively higher rates. Pennsylvania is an exception, using flat rates: 0% for surviving spouses, 4.5% for lineal descendants, 12% for siblings, and 15% for all others. Nebraska uses flat rates by class: 1% for immediate family (above exemption), 11% for remote relatives, and 15% for unrelated persons. New Jersey and Kentucky use graduated rate schedules within each class.
5. 5File the inheritance tax return with the applicable state revenue department. Filing requirements and deadlines vary by state: Pennsylvania requires filing within nine months of death (Form REV-1500), New Jersey requires filing within eight months (Form IT-R or IT-NR), Kentucky requires filing within 18 months (Form 92A200 series), and Nebraska requires filing within 12 months (Form 500). Some states offer discounts for early payment: Pennsylvania offers a 5% discount if the tax is paid within three months of death. Late filing incurs interest and penalties in all states.
6. 6Account for assets that may be exempt from inheritance tax regardless of the beneficiary class. Common exemptions include: life insurance proceeds payable to a named beneficiary (exempt in most inheritance tax states), jointly held property with right of survivorship (treatment varies by state), certain retirement account distributions, property passing to charitable organizations, property passing to governmental entities, and small estates below a minimum threshold. Pennsylvania exempts certain farmland and family-owned businesses from the 4.5% rate for lineal descendants under specific conditions.
7. 7Coordinate inheritance tax planning with federal estate tax planning and state estate tax planning (in states like Maryland that impose both). Strategies to minimize inheritance tax include: leaving assets to exempt beneficiaries (spouse, charity), making lifetime gifts (which may be exempt from inheritance tax if made more than one year before death in some states), using life insurance (often exempt from inheritance tax), creating trusts that may reduce the inheritance tax base, and relocating domicile to a non-inheritance-tax state. However, states may challenge domicile changes that appear motivated solely by tax avoidance.

• !Forutsatt ingen skatt fordi forbundsgodset er under fritaket: Mange begunstigede antar at hvis den avdødes eiendom er under det føderale eiendomsskattefritaket ($13,61 millioner), er det ingen dødsskatt skyldig. Dette er feil i arveavgiftsstater, hvor skatten pålegges den begunstigede basert på det mottatte beløpet, ikke på det totale boet. Et søsken som arver $300 000 i New Jersey eller Pennsylvania vil skylde tusenvis i arveavgift uavhengig av den totale eiendomsstørrelsen. Statens arveavgift gjelder selv for beskjedne eiendommer.
• !Ikke vite hvilken stats skatt som gjelder: Arveavgift pålegges av den avdødes bostedsstat, ikke mottakerens bostedsstat. En mottaker som bor i skattefrie Florida som arver fra en onkel i Pennsylvania, skylder fortsatt Pennsylvania arveskatt. I tillegg kan fast eiendom som ligger i en arveavgiftsstat være underlagt den statens arveavgift selv om den avdøde bodde et annet sted. Begunstigede unnlater noen ganger å arkivere i riktig tilstand eller ikke arkivere i det hele tatt, noe som resulterer i straffer og renter.
• !Manglende tidligbetalingsrabatter: Pennsylvania tilbyr 5 % rabatt på arveavgift betalt innen tre måneder etter dødsfallet, noe som kan spare tusenvis av dollar på store arv. På samme måte pålegger noen stater lavere renter eller gir avkall på straffer for tidlig innlevering og betaling. Eksekutører som utsetter innlevering av arveavgift til siste mulige dato, går glipp av disse besparelsene. Med en arv på $500 000 beskattet med 4,5 % i Pennsylvania, sparer tidligbetalingsrabatten $1125.