Inheritance tax by state: which states charge it, and how much

A short note before you start

This guide is general information for the United States, not legal, tax, financial or medical advice. Inheritance tax rules are set state by state and change over time, so confirm the current rate and exemption with the state's own department of revenue before you rely on a number here.

What is inheritance tax, and how is it different from estate tax?

Inheritance tax is a tax that some states charge to the person who receives money or property from someone who died, based on how closely related the two of you were. Estate tax works differently: it is charged to the estate itself, before any money or property is handed out, and it is based on the total value of everything the person owned. You can owe one, both or neither, depending on where the person lived and who you are to them.

The federal government only has an estate tax; it has never had a federal inheritance tax². At the state level the two taxes are separate laws with separate rules:

• Estate tax: paid by the estate, out of the estate's own money, before distribution. Twelve states and the District of Columbia currently charge one: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington¹.
• Inheritance tax: paid by the person who inherits, based on the amount they personally receive and their relationship to the deceased. Only five states charge one: Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania¹.

Because Maryland charges both, an heir there can, in theory, see the estate pay an estate tax and then also owe inheritance tax personally on what they receive, depending on the relationship¹.

Two things decide whether inheritance tax applies to you: the deceased person's domicile (their legal home state) at death, and, in some states, the location of any real estate they owned. Your own state of residence generally does not matter.

Which states have an inheritance tax in 2026?

As of 2026, five states still charge an inheritance tax. All five exempt spouses completely, and most exempt children, parents and other close relatives, while charging real rates to nieces, nephews, cousins, friends and unrelated heirs.

Kentucky and New Jersey have the highest top marginal inheritance tax rates in the country, each reaching 16%¹. Pennsylvania's tax has no dollar exemption at all for taxable relationships; even a small inheritance to a direct descendant is taxed from the first dollar⁵.

Does it matter where I live, or where the person who died lived?

What matters is where the deceased person was domiciled, not where you live. If your parent lived and died in Pennsylvania and you live in Texas, you can still owe Pennsylvania inheritance tax on what you inherit. Real estate located in an inheritance-tax state can also trigger the tax for an out-of-state heir, because several of these states tax in-state real property regardless of the owner's domicile¹². If you are unsure, ask a probate attorney or accountant licensed in that state.

How does inheritance tax actually work?

Each of the five states groups beneficiaries into classes by relationship, gives each class its own dollar exemption, then taxes anything above that at rates that rise with the amount inherited. The tax is calculated per beneficiary, not on the estate as a whole, so two heirs of the same estate can owe very different amounts.

The general steps, in order:

1. Identify the deceased person's state of domicile at the time of death, since that state's law controls whether inheritance tax applies at all.
2. Determine each beneficiary's relationship class under that state's rules (the tables above show the five states' classes).
3. Value what each beneficiary actually receives, generally the fair market value on the date of death, minus debts and expenses properly charged against that share.
4. Apply the class exemption, then apply that class's tax rate (or graduated rates) to the amount above the exemption.
5. File the state's inheritance tax return and pay, usually within nine months of the date of death, though the exact deadline varies by state.
6. Get a tax waiver or release, if the state requires one, before banks or transfer agents will release certain accounts or retitle property to the beneficiary.

Executors and personal representatives usually handle the filing and payment on behalf of all beneficiaries, then account for it when distributing the estate, but the legal liability for the tax generally falls on the beneficiary who received the property. The executor checklist covers where inheritance tax fits into the broader timeline of settling an estate.

Is there an inheritance tax calculator?

None of the five inheritance-tax states publishes a live, interactive online calculator, but each one publishes the worksheet or instructions that its own tax return uses, and the arithmetic is simple enough to do by hand once you know the beneficiary's class:

1. Look up the beneficiary's class and the exemption for that class in the table above.
2. Subtract the exemption from the fair market value of what that beneficiary received.
3. Multiply the remainder by the rate (or run it through the graduated brackets) for that class.
4. Subtract any early-payment discount the state allows if you are paying within the discount window.

For example, a Kentucky niece inheriting $50,000 (a Class B relationship) would subtract the $1,000 exemption, leaving $49,000 taxed at Class B's graduated rate³. Treat any third-party "inheritance tax calculator" you find online as a rough estimate, and confirm the final number against the state's own instructions or a professional.

Do any states offer a discount for paying early?

Kentucky and Pennsylvania both do. Kentucky allows a 5% discount if the tax is paid within 9 months of death, and its return is due within 18 months³. Pennsylvania allows a 5% discount if paid within 3 months of death, and the tax becomes delinquent, with interest, 9 months after death⁵. For Maryland, Nebraska and New Jersey, check that state's own current instructions for any discount or interest rate.

A step-by-step checklist for figuring out what an estate may owe

Work through this in order for any estate that might touch Kentucky, Maryland, Nebraska, New Jersey or Pennsylvania.

• Confirm the deceased person's state of domicile at death.

• Check whether that state is one of the five inheritance-tax states, or one of the twelve estate-tax states, or neither.

• List every beneficiary and their exact relationship to the deceased person.

• Sort each beneficiary into that state's relationship class.

• Get a fair-market-value figure for what each beneficiary will receive, as of the date of death.

• Subtract that class's exemption from each beneficiary's share.

• Apply the class rate or bracket to calculate the tax for each beneficiary.

• Check whether real estate in a different state adds a separate filing obligation.

• Note the filing deadline and any early-payment discount.

• File the return, pay the tax, and request any waiver needed to transfer accounts or property.

What should go in a family guide about this?

A family guide should record where the person who made it is domiciled, since that single fact determines whether an inheritance tax applies at all, along with a list of major beneficiaries, their relationship to the person, and the location of any real estate owned outside the home state. Recording this while the person can still confirm it themselves saves the family from reconstructing it under time pressure later. Note where the will and any state-specific estate documents are kept, and link that to a letter of instruction for the executor and the estate planning glossary for terms like "domicile" and "beneficiary class."

What mistakes do people commonly make about inheritance tax?

• Assuming every state has one. Only five do¹.
• Confusing it with the federal estate tax. The federal threshold is $15,000,000 for 2026 and hits a tiny share of estates; state inheritance tax has no such bar and can apply to a modest inheritance from a non-relative².
• Assuming your own home state controls. It is the deceased person's domicile, and sometimes the location of real estate, that matters.
• Forgetting Iowa's repeal. Iowa repealed its inheritance tax completely for deaths on or after January 1, 2025; older sources may still show outdated Iowa numbers¹².
• Skipping the tax waiver. Some states require one before a bank will release funds or retitle an account, even when the tax itself is exempt.
• Missing the early-payment discount. In Kentucky and Pennsylvania, paying within the discount window shaves 5% off the bill³,⁵.

When to get professional help

Bring in a probate attorney or a CPA licensed in the deceased person's state whenever the estate includes real estate in more than one state, whenever a beneficiary's relationship class is unclear (a stepchild, a domestic partner, a former spouse's child), whenever both an estate tax and an inheritance tax might apply, or whenever you are unsure which state's law controls. A professional can confirm current interest rates, discount windows and waiver requirements, since these change and are set at the state level.