Inheritance Tax Calculator — All States with
Inheritance Tax

As of 2025, only five states impose an inheritance tax: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Iowa repealed its inheritance tax effective January 1, 2025. Maryland is unique in imposing both a state estate tax and a state inheritance tax. All other states have either repealed their inheritance tax or never had one. Inheritance tax is paid by the person who receives the inheritance, not the estate itself — the rate depends on the beneficiary's relationship to the deceased.

Estate tax is levied on the estate of the deceased before assets are distributed — the estate pays the tax out of its assets. Inheritance tax is levied on the person who receives property — the beneficiary pays the tax after receiving the inheritance. The federal government only imposes an estate tax (currently exempting estates under ~$13.61 million). Six states impose estate taxes. Five states impose inheritance taxes. Maryland imposes both. The practical difference matters: estate tax reduces what heirs receive, while inheritance tax is a direct obligation of each heir based on what they personally inherit.

Surviving spouses are exempt from inheritance tax in all states that impose it. Direct descendants (children, grandchildren) are exempt in most inheritance tax states or pay very low rates. In Pennsylvania, children and grandchildren pay 4.5% (vs. 12% for siblings and 15% for others). In Nebraska, children and other 'close relatives' pay 1% (after a $40,000 exemption). In Kentucky, children, spouses, and parents are completely exempt. In New Jersey, Class A beneficiaries (spouse, children, grandchildren, parents) are exempt. Unrelated beneficiaries face the highest rates — often 10–18%.

Yes, through several strategies. Gifting assets during the grantor's lifetime (before death) removes them from the inheritance tax base — though gift tax rules vary. Irrevocable trusts can transfer assets out of the estate in a way that may reduce or eliminate inheritance tax depending on the state. Life insurance proceeds paid to named beneficiaries typically pass outside the estate and may avoid inheritance tax in some states. Charitable bequests are generally not subject to inheritance tax. Finally, simply relocating to a non-inheritance-tax state (while alive) eliminates state inheritance tax — though Maryland and a few others impose tax on in-state property regardless of domicile.

Inheritance tax is typically due 9–12 months after the date of the deceased's death. Most states impose interest on unpaid taxes after the due date. Some states allow installment payment arrangements for inheritances of illiquid assets (like real estate or business interests). The personal representative of the estate usually files the return and arranges for beneficiaries to pay their shares before making distributions. Beneficiaries who receive distributions without paying the inheritance tax may personally owe penalties and interest.