The House GOP recently released a tax reform proposal (click here to see the full details). Among other changes, it would convert the current corporate income tax into what is called a “destination-based cash flow tax.”...
- State Estate and Inheritance Taxes in 2014
State Estate and Inheritance Taxes in 2014
In addition to the federal estate tax, many U.S. states levy their own estate and inheritance taxes. While estate taxes are charged against the estate regardless of who inherits the assets, inheritance taxes are levied on the transfer of assets to heirs, based on the relationship of the inheritor to the deceased. In the case of inheritance taxes, spouses, children, or siblings often have different exemptions, which we list in detail in table 35 in our annual publication, Facts & Figures.
Currently, fifteen states and the District of Columbia have an estate tax, and six states have an inheritance tax. Maryland and New Jersey have both.
(Click on the map to enlarge it. Reposting policy)
The state with the highest maximum estate tax rate is Washington (20 percent), followed by eleven states which have a maximum rate of 16 percent. Hawaii and Delaware have the highest exemption threshold at $5,340,000 (matching the federal exemption). New Jersey has the lowest, only exempting estates up to $675,000.
Of the six states with inheritance taxes, Nebraska has the highest maximum inheritance tax rate (18 percent for transfers to non-relatives); Kentucky and New Jersey follow closely behind with a top rate of 16 percent for non-immediate family members and all other beneficiaries.
Reform and repeal of estate and inheritance taxes have been very frequent in the last few years, sometimes in states you might not expect. Last year, Indiana sped up the repeal of its inheritance tax, retroactively to January 1, 2013. Tennessee's estate tax will phase out fully in 2016. Maryland and New York this year agreed to phase in new, higher estate tax exemptions, eventually matching the federal exemption level ($5.9 million) by 2019. Minnesota will double its exemption from $1 million to $2 million over five years, and Washington, D.C. is currently considering suggestions from its tax commission to match the reforms of Maryland and New York.
Click here for more information on death taxes.
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