What States Have Inheritance Tax ?  

In some states in the US, inheritance tax is the tax imposed on the beneficiary of an estate. The tax payable is assessed only on that portion of the estate which the beneficiary inherits.

There is a subtle difference between inheritance and estate tax. Estate tax refers to a levy on the entire estate, payable before distribution of assets.

Inheritance tax is a state tax. Eleven states still impose an inheritance tax. These are: Connecticut, Indiana, Iowa, Kansas, Kentucky, Maryland, Nebraska, New Jersey, Oregon, Pennsylvania and Tennessee.

Transfer of property to a spouse is exempt from inheritance tax. This law is uniformly adopted by all states. Some of the states exempt transfer of assets to children and immediate relatives of the deceased.

Currently an estate, if free of estate tax encumbrance, should the gross value be under $3.5 million. As on date, this tax is scheduled to be removed in 2010. But there is a likelihood that it will re-appear in the ensuing year with a reduced ceiling of $1 million. This was under a Bush doctrine that is liable to be repealed by President Obama.

Since most states will lose estate tax revenue if such credit is phased out, they are contemplating de-coupling their tax code from that of the federal government.

Seventeen states and the District of Columbia have decided to retain their estate taxes after the federal changes. Of these, 15 states -- Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Ohio, Oregon, Rhode Island, Vermont, Virginia, and Wisconsin -- and the District of Columbia decoupled from the federal changes. Two states -- Nebraska and Washington -- retained their tax by enacting similar but separate estate taxes.

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What States Have Inheritance Tax

Can-I-Legally-Avoid-Inheritance-Tax-In-The-Us      The estate tax in the US is a tax that is imposed on transfer of property of a deceased person. It could be through a will or according to state laws. It is one part of the Unified Gift and Estate Tax. The other part, the gift tax, is tax imposed on property that is transferred during a person’s life. Gift tax prevents evasion of estate tax. More..




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What States Have Inheritance Tax ? )
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