Federal Estate Tax Instability Affects the States
State estate taxes, like federal estate taxes, are constantly changing. The federal estate tax expired on January 1, 2010. Since the federal tax expiration, its restoration has been uncertain and federal lawmakers have been putting off action in some cases. Some of the states fluctuation instability stems from the federal mess. In the interim, 19 states and the District of Columbia have imposed their own estate and/or inheritance tax on estates not left to a spouse or charity. Some of these individual state taxes are even taxing modest estates. Hopefully the federal lawmakers will make some decisions, because largely what happens in the states will depend on what happens federally.
Summary of the 19 states plus Washington D.C.:
- 11 States and Washing D.C. – levy an estate tax only
- 6 states – levy an inheritance tax only w/ a rate dependent upon the relationship of the heir to the deceased
- New Jersey and Maryland – levy both an estate and inheritance tax
To read more about this topic see 19 States impose tax on estates not left to a spouse or charity or Disappearance of the federal estate tax creates confusion.
To discuss the current and future estate tax situation, please consult with an estate planning attorney.
