Inheritance Tax Calculator

Calculate federal estate tax and state inheritance tax on inherited assets. Estimate tax obligations for beneficiaries of high-value estates.

Federal Estate Tax

Calculate the federal estate tax liability based on estate value and deductions.

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State Inheritance Tax

Estimate state-level inheritance tax based on your relationship to the deceased.

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Inherited IRA Tax Impact

Estimate income tax on inherited retirement account distributions over the 10-year rule.

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Formula

Federal Estate Tax = (Gross Estate - Deductions - Marital Deduction - Exemption) x 40%

Frequently Asked Questions

What is the difference between estate tax and inheritance tax?
Estate tax is levied on the deceased person's estate before distribution, while inheritance tax is levied on the beneficiary who receives the assets. The federal government only imposes estate tax (40% above the exemption), while six states impose inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
How much can you inherit without paying federal tax?
In 2024, the federal estate tax exemption is $13.61 million per individual. Estates valued below this threshold owe no federal estate tax. Surviving spouses can inherit an unlimited amount tax-free through the marital deduction.
Do beneficiaries pay income tax on inheritance?
Generally, inherited assets are not subject to income tax. Beneficiaries receive a stepped-up basis equal to the fair market value at the date of death. However, inherited retirement accounts (IRAs, 401(k)s) are subject to income tax when distributions are taken.

Understanding Inheritance Taxation

Inheritance taxation in the United States operates at both the federal and state level, with different rules, exemptions, and rates. Understanding these layers is crucial for both estate planners and beneficiaries of high-value estates.

Federal Estate Tax Overview

The federal estate tax applies at a flat rate of 40% on the taxable estate above the exemption amount ($13.61 million in 2024). The estate can claim deductions for debts, funeral expenses, charitable bequests, and property passing to the surviving spouse.

State-Level Considerations

  • Estate tax states: 12 states plus DC impose their own estate tax with lower exemptions ($1M-$6.94M)
  • Inheritance tax states: 6 states tax beneficiaries based on relationship and amount received
  • Spouses are exempt from inheritance tax in all states

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