Ohio does not have an inheritance tax

Ohio has no state-level inheritance tax. If you inherit money, property, or other assets from someone who died, you will not owe Ohio state tax on that inheritance. This applies whether the person who left you the inheritance lived in Ohio or elsewhere.

The federal government does have an estate tax, but it only applies to very large estates. For 2024, the federal estate tax threshold is $13.61 million. Unless the total value of the entire estate exceeds that amount, no federal estate tax is due, and beneficiaries owe nothing.

Some states do tax inheritances or estates. Ohio is not one of them. If you live in Ohio and inherit from someone in another state, or vice versa, Ohio itself will not tax your inheritance.

Key Takeaways

  • Ohio has no state inheritance tax, so you owe nothing to Ohio on money or property you inherit.
  • The federal estate tax only applies to estates worth more than $13.61 million in 2024, which affects very few families.
  • If you inherit from someone in another state, check that state's rules, because some states do tax inheritances even though Ohio does not.
  • Inherited retirement accounts like IRAs have federal tax rules that are separate from inheritance tax and may require you to take distributions.

How federal estate tax works and who it affects

The federal estate tax is a tax on the total value of everything a person owned when they died. It applies only to estates larger than the threshold amount. For most people, this means no federal estate tax is owed at all.

The executor of the estate — the person named in the will to handle the estate — is responsible for filing a federal estate tax return if the estate is large enough. The tax is paid from the estate's assets before money is distributed to beneficiaries. Beneficiaries themselves do not file a separate federal inheritance tax return.

The threshold amount changes each year and is set by federal law. It was $13.61 million per person in 2024. After 2025, the threshold is scheduled to drop to around $7 million, but Congress could change this before then.

What types of inheritance are not taxed in Ohio

In Ohio, you will not pay state tax on inheritances of cash, real estate, vehicles, jewelry, bank accounts, or other property. This holds true regardless of the size of the inheritance or your relationship to the person who died.

Life insurance proceeds paid to a named beneficiary are also not subject to Ohio inheritance tax. The same applies to money in a payable-on-death bank account or a transfer-on-death investment account — these pass directly to the named beneficiary without going through the estate.

Inherited retirement accounts do have federal tax consequences, but those are income tax rules, not inheritance tax. If you inherit an IRA or 401(k), you may be required to take distributions and pay federal income tax on those distributions. This is a separate matter from inheritance tax.

States that do tax inheritances

Six states currently have an inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. If you inherit from someone who lived in one of these states, that state may tax the inheritance, depending on your relationship to the person who died and the size of the inheritance.

Each state's rules are different. Some states exempt spouses and children but tax more distant relatives. Others have a dollar threshold below which no tax is owed. If you inherit from someone in another state, contact that state's department of revenue or ask the estate's executor whether state inheritance tax applies.

If you live in Ohio and inherit from someone in one of these six states, you will still owe nothing to Ohio. But you may owe tax to the state where the person who died lived.

What happens with inherited retirement accounts

Inherited IRAs and 401(k)s are treated differently from other inheritances. You will not pay Ohio inheritance tax on them, but federal income tax rules explore. The amount you must withdraw each year and the tax you owe depend on your relationship to the person who died and the type of account.

If you inherit a traditional IRA, you must take distributions and pay federal income tax on those distributions. If you inherit a Roth IRA, the distributions themselves are not taxed, but you still must take them. The rules changed in 2023 under the find Act, and most non-spouse beneficiaries must empty the account within ten years.

Speak with a tax professional or the financial institution holding the account about your specific situation. The rules are complex and depend on details like whether you are a spouse, child, or other relative.

Probate and estate administration in Ohio

When someone dies in Ohio, their estate may go through probate — a court process that validates the will, identifies heirs, and distributes assets. Probate itself is not a tax, but it does involve court fees and costs. These are paid from the estate's assets, not by individual beneficiaries.

Small estates in Ohio can skip probate entirely if the total value is below a certain threshold. As of 2024, estates worth $40,000 or less can use a simplified process. This reduces costs and speeds up distribution to beneficiaries.

Some assets pass outside of probate — for example, property held in joint tenancy, life insurance with a named beneficiary, and payable-on-death accounts. These go directly to the named person and do not require probate.

Planning ahead if you expect to inherit

If you know you will inherit property or money, you do not need to take action in Ohio because there is no state inheritance tax to plan around. However, you may want to understand the federal tax rules if the estate is large, or if the inheritance includes a retirement account.

If you are inheriting real estate, you may want to understand Ohio's property tax rules. Inherited property is reassessed for tax purposes, and the tax may change. Contact your county auditor's office for details about your specific property.

If you are the executor of an estate, you will need to understand Ohio probate law and may want to consult an attorney. The executor's job includes filing final tax returns for the deceased person, paying debts, and distributing assets correctly.

Frequently Asked Questions

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

No. Ohio has no inheritance tax. You will not owe Ohio state tax on any inheritance, regardless of the amount or what you inherit. The federal government may tax very large estates, but only if the total estate exceeds $13.61 million in 2024.

What if the person who died lived in another state?

Check the rules in that state. Six states — Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania — have inheritance taxes. If the person lived in one of those states, you may owe that state's inheritance tax. Ohio will not tax you.

Do I owe tax on an inherited IRA or 401(k)?

You will not owe Ohio inheritance tax, but federal income tax rules explore. You must take distributions from inherited retirement accounts, and those distributions are taxable as income. The rules depend on your relationship to the person who died and the account type. Consult a tax professional for your situation.

Is there any tax I have to pay when I inherit in Ohio?

Not from Ohio. You may owe federal estate tax only if the entire estate exceeds $13.61 million in 2024. If you inherit a retirement account, you will owe federal income tax on distributions you take. Otherwise, inheritances in Ohio are not taxed at the state level.

What if I inherit real estate in Ohio?

You will not pay inheritance tax, but the property will be reassessed for property tax purposes. The annual property tax may increase or decrease based on the new assessment. Contact your county auditor to understand how the reassessment affects your tax bill.