Ohio does not have a state estate tax or inheritance tax

Ohio abolished its estate tax in 2013, and the state has no inheritance tax. This means that when someone dies and leaves property or money to heirs in Ohio, the state itself does not take a cut. Your federal obligations are a different matter — the federal government still collects estate tax on very large estates — but Ohio residents do not owe anything to the state based on what they inherit.

This is a significant advantage for Ohio families. Many states still collect estate or inheritance taxes, which can reduce what heirs actually receive. Because Ohio does not, more of an estate passes directly to the people named in a will or trust.

Key Takeaways

  • Ohio has no state estate tax and no state inheritance tax, so heirs pay nothing to Ohio when they inherit.
  • The federal government still taxes very large estates, but only those worth more than $13.61 million (as of 2024, though this amount changes yearly).
  • If you inherit property in Ohio from someone who lived elsewhere, you follow Ohio law, not the deceased person's home state law.
  • You may still owe federal income tax on inherited retirement accounts or investment income, even though there is no estate tax.

When Ohio's estate tax ended

Ohio repealed its estate tax effective January 1, 2013. Before that date, Ohio taxed estates worth more than $40,000 at rates ranging from 2 to 7 percent, depending on the size of the estate. The repeal was gradual — the tax did not disappear overnight but phased out over several years as existing estates were settled.

This change brought Ohio in line with most other states. Today, only a handful of states still collect estate or inheritance taxes. The federal government continues to tax large estates, but Ohio itself does not add a second layer of taxation on top of that.

How federal estate tax still applies to Ohio residents

Even though Ohio has no state estate tax, the federal government taxes estates that exceed a certain threshold. For 2024, the federal exemption is $13.61 million per person. Estates smaller than that owe no federal tax. Estates larger than that pay federal tax on the amount above the exemption.

This threshold is temporary. It is scheduled to drop to roughly $7 million per person (adjusted for inflation) on January 1, 2026, unless Congress changes the law. This means an estate that owes no tax today might owe federal tax in a few years if the exemption falls and the estate size stays the same.

The federal tax rate on taxable estates is a flat 40 percent. This applies only to the portion of the estate above the exemption threshold. For most Ohio families, federal estate tax is not a concern because their estates fall well below the exemption.

Inherited retirement accounts and income tax

Even though there is no estate tax in Ohio, you may still owe federal income tax on certain inherited assets. Inherited retirement accounts — such as traditional IRAs, 401(k)s, and similar plans — are subject to federal income tax when you withdraw the money. The original account holder did not pay income tax on those funds, so the tax liability passes to you as the heir.

The rules for inherited retirement accounts changed in 2023 under the find 2.0 Act. In most cases, you must withdraw all funds from an inherited IRA or 401(k) within 10 years of the account holder's death. You pay federal income tax on each withdrawal. Ohio does not add a state income tax on top of this, but the federal tax obligation remains.

Inherited investment accounts and real estate may also trigger income tax if they generate income after you inherit them. For example, if you inherit rental property, you owe federal income tax on the rent you collect. Again, Ohio does not tax this income separately, but federal tax applies.

What happens if the deceased person lived in another state

If someone who lived in a state with an estate or inheritance tax dies and leaves property to you in Ohio, you follow Ohio law, not their home state's law. Ohio will not tax the inheritance. However, the deceased person's home state may still try to collect tax on the estate itself, depending on that state's rules and the size of the estate.

This situation is most common when someone moves to Ohio from a state like New Jersey, Pennsylvania, or Maryland, all of which still have inheritance or estate taxes. The deceased person's original state may claim the right to tax the estate based on where they lived when they died, not where the heirs live or where the property is located. You should consult a tax professional if you inherit from someone who died in another state, because the rules vary significantly.

Planning your estate in Ohio

Because Ohio has no state estate tax, estate planning in Ohio is simpler than in states that do tax estates. You do not need to structure your will or trust to minimize state-level taxes. However, federal estate tax planning still matters if your estate is large — currently, if you expect your assets to exceed $13.61 million.

Common estate planning tools in Ohio include wills, trusts, and beneficiary designations on retirement accounts and life insurance. A will is a public document that goes through probate court, while a trust is private and avoids probate. Neither tool changes your federal tax obligation, but both affect how smoothly your estate transfers to your heirs and how much they spend on court fees and legal costs.

If you think your estate might exceed the federal exemption, or if you have complex family situations, real estate in multiple states, or significant business interests, you should speak with an estate planning attorney. They can help you structure your assets in ways that minimize federal tax and may support your wishes are carried out efficiently.

Frequently Asked Questions

Do I owe Ohio tax when I inherit money or property?

No. Ohio has no estate tax or inheritance tax, so you owe nothing to the state when you inherit. You may owe federal estate tax if the total estate is very large, but that is a federal obligation, not an Ohio one.

What if I inherit a house in Ohio from someone who lived in Pennsylvania?

You do not owe Ohio tax on the inheritance. Pennsylvania may try to tax the estate based on where the deceased person lived, but that is between Pennsylvania and the estate. You should consult a tax professional to understand what Pennsylvania may claim and how it affects you.

Do I have to pay income tax on money I inherit?

Inherited cash or property itself is not taxed as income. However, if the inherited asset generates income after you receive it — such as rent from property, interest from a bank account, or dividends from stocks — you owe federal income tax on that income. Inherited retirement accounts are also subject to federal income tax when you withdraw the funds.

Will the federal estate tax exemption change soon?

Yes. The current exemption of $13.61 million per person is temporary and is scheduled to drop to roughly $7 million per person on January 1, 2026, unless Congress passes new legislation. This could significantly affect large estates, so it is worth monitoring if your estate is close to the current threshold.

Should I hire an estate planning attorney in Ohio?

If your estate is small and your wishes are straightforward, you may not need one. If you own property in multiple states, have a large estate, have a blended family, or own a business, an attorney can help you structure your assets to minimize costs and may support your heirs receive what you intend.