Estate and Inheritance Taxes by State, 2026

In addition to the federal estate tax An estate tax is imposed on the net value of an individual's taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs., which has a top marginal rate of 40 percent, 12 states and the District of Columbia impose estate taxes, while five states levy inheritance taxes. Maryland is the only state that imposes both an estate and an inheritance taxAn inheritance tax is levied upon the value of inherited assets received by a beneficiary after a decedent's death. Not to be confused with estate taxes, which are paid by the decedent's estate based on the size of the total estate before assets are distributed, inheritance taxes are paid by the recipient or heir based on the value of the bequest received..

Estate taxes are paid by a decedent's estate before assets are distributed to heirs and are thus imposed on the overall value of the estate. They typically fall on the estates of residents who die while domiciled in the taxing state, as well as nonresident decedents who owned taxable property in the state. Inheritance taxes are remitted by the recipient(s) of a bequest and are thus based on the amount distributed to each beneficiary. They are paid to the state in which the decedent was domiciled or owned taxable property, regardless of the location of the heir.

Most estate and some inheritance taxes are progressive, with the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on a decedent's estate or a beneficiary's inheritance exposed to rates that increase with marginal increases in the total value of assets.

Hawaii and Washington have the highest estate tax top marginal rates in the nation at 20 percent. The top rate applies to taxable estate values exceeding $10 million in Hawaii and $9 million in Washington. While Washington's top rate applies to a slightly lower taxable estate value, Washington's estate tax is more burdensome because its exemption is lower ($3 million compared to $5.49 million in Hawaii), exposing more estates to taxation, and because its marginal rates get higher faster than Hawaii's.

Eight states and the District of Columbia assess a 16 percent top estate tax rate on marginal taxable estate values ranging from $5 million in Vermont to $10.1 million in Minnesota and New York.Connecticut levies an estate tax at a flat rate of 12 percent, while Vermont imposes a flat rate of 16 percent. Combined with its high exemption value of $15 million, Connecticut's estate tax is less burdensome than many others and is in a prime position for possible reforms and eventual elimination.

With the passage of the One Big Beautiful Bill Act (OBBBA) in 2025, the federal estate tax exemption threshold increased to $15 million starting in 2026 and is indexed for inflation< /a>Inflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a "hidden tax," as it leaves taxpayers less well-off due to higher costs and "bracket creep," while increasing the government's spendin from 2027 onward.

Currently, Connecticut is the only state that conforms its estate tax exemption to the federal threshold. New York has the second highest exemption at $7.35 million. At the other end of the spectrum, Oregon and Rhode Island have the least generous exemptions, at only $1 million and $1,838,056, respectively. Four states-Connecticut, Maine, New York, and Rhode Island-and the District of Columbia currently index their exemption amounts for inflation.

All five states with an inheritance tax-Kentucky, Maryland, Nebraska,New Jersey, and Pennsylvania -structure their tax such that the rate varies based on the proximity of the bequest recipient to the decedent. States give preferential treatment, including lower rates and higher exemption thresholds, to close relatives while taxing more distant beneficiaries at higher rates and with lower exemption thresholds.

Kentucky and New Jersey have the highest top marginal inheritance tax rates, each at 16 percent, while Maryland has the lowest top inheritance tax rate at a flat 10 percent on all recipients who are not spouses or lineal heirs (although Maryland also levies an estate tax).