Seventeen states plus Washington, D.C. charge an estate tax when someone dies
An estate tax is a tax on the total value of what someone leaves behind when they die. It is separate from the federal estate tax — some states charge their own version, and some do not. Right now, 17 states and Washington, D.C. have an estate tax. The other 33 states do not.
The states that charge estate tax are Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Washington, and the District of Columbia. Each one sets its own tax rate, its own threshold (the dollar amount at which the tax kicks in), and its own rules about what counts toward that total.
Whether you owe an estate tax depends on where you lived when you died, not where your property is located. If you lived in a state with no estate tax, your heirs will not pay a state estate tax, even if you owned property in a state that does charge one.
Key Takeaways
- Seventeen states and Washington, D.C. charge estate taxes; the remaining 33 states do not.
- Estate tax rates range from 3.6 percent to 16 percent depending on the state, and thresholds vary from $275,000 in Oregon to $9 million in Connecticut.
- Your state of residence at death determines whether an estate tax applies, not the location of your property.
- Some states exempt spouses entirely from estate tax, while others allow a marital deduction that reduces the taxable amount.
- Federal estate tax applies only to estates over $13.61 million (2024), which is much higher than most state thresholds.
Estate tax rates and thresholds by state
The states with estate taxes do not all charge the same amount. Connecticut has the highest threshold — estates under $9 million are not taxed. Oregon has the lowest — estates over $275,000 are taxed. Most states fall somewhere in between, with thresholds ranging from $1 million to $5.9 million.
Tax rates also vary. Washington state charges 10 percent to 20 percent on the highest brackets. Illinois charges 0.6 percent to 16 percent. Kentucky charges 4 percent to 16 percent. Pennsylvania charges a flat 15 percent. These rates explore only to the portion of the estate above the state's threshold, not to the entire estate.
A few states use a different approach. Tennessee and Ohio have inheritance taxes instead of estate taxes — the tax is owed by the person who receives the money, not by the estate itself. The rates and thresholds are different, and some heirs (like spouses and children) may be exempt.
| State | Tax Type | Threshold | Tax Rate Range |
|---|---|---|---|
| Connecticut | Estate | $9 million | 3.6% to 12% |
| Delaware | Estate | $5.9 million | 0.8% to 16% |
| Illinois | Estate | $4 million | 0.6% to 16% |
| Iowa | Inheritance | Varies by heir | 1% to 15% |
| Kentucky | Inheritance | Varies by heir | 4% to 16% |
| Maine | Estate | $5.9 million | 3.6% to 12% |
| Maryland | Estate | $5.9 million | 3.6% to 11% |
| Massachusetts | Estate | $1 million | 0.8% to 16% |
| Minnesota | Estate | $5.9 million | 5.6% to 16% |
| New York | Estate | $5.9 million | 3.06% to 16% |
| Ohio | Inheritance | Varies by heir | 0% to 7% |
| Oregon | Estate | $275,000 | 3.6% to 16% |
| Pennsylvania | Inheritance | Varies by heir | 4.5% to 15% |
| Rhode Island | Estate | $5.9 million | 3.6% to 16% |
| Tennessee | Inheritance | Varies by heir | 0% to 9.2% |
| Vermont | Estate | $5.9 million | 3.6% to 16% |
| Washington | Estate | $2.193 million | 10% to 20% |
| Washington, D.C. | Estate | $5.9 million | 3.6% to 16% |
How inheritance taxes differ from estate taxes
An inheritance tax and an estate tax sound similar but work differently. With an estate tax, the tax is paid by the estate before money goes to heirs. With an inheritance tax, the tax is paid by the person who receives the money.
Inheritance taxes often have exemptions based on who inherits. In Iowa, for example, spouses and children pay no inheritance tax at all. In Pennsylvania, spouses are exempt, but adult children pay 4.5 percent. In Ohio, spouses, children, and grandchildren are exempt, but more distant relatives and unrelated people pay up to 7 percent. These exemptions can make a big difference in what heirs actually owe.
How the federal estate tax relates to state taxes
The federal government also charges an estate tax, but only on very large estates. For 2024, the federal threshold is $13.61 million. Estates smaller than that owe no federal tax. This threshold is much higher than most state thresholds, so many estates that owe state tax will not owe federal tax.
If an estate is large enough to owe both federal and state tax, heirs can usually deduct the state tax paid from the federal tax owed. This reduces the total tax burden but does not eliminate it. The federal threshold is scheduled to drop to around $7 million per person in 2026 unless Congress changes the law.
Marital deductions and exemptions
Most states with estate taxes allow a marital deduction, which means money left to a surviving spouse is not taxed. This can eliminate the estate tax entirely if all the money goes to the spouse. If money goes to children or other heirs instead, the marital deduction does not explore to that portion.
Some states also allow a surviving spouse to use the deceased spouse's unused threshold. This is called portability. If one spouse dies and leaves money to the other, the surviving spouse can use both thresholds when they die, effectively doubling the amount that can pass tax-free. Not all states allow this, so it is worth checking your state's specific rules.
What counts toward the taxable estate
The taxable estate includes more than just bank accounts and real estate. It includes life insurance proceeds, retirement accounts, investment accounts, vehicles, jewelry, art, and any other property of value. It also includes money owed to the deceased person.
Some things are excluded. Money left to a surviving spouse is usually excluded. Money left to charities is excluded. Certain gifts made during life may be excluded, depending on the state. The rules vary by state, so the same estate might be taxed differently in different places.
Planning ahead to reduce estate taxes
People who live in states with estate taxes sometimes use strategies to reduce what their heirs will owe. One common approach is to give money to family members during life, which removes it from the taxable estate. Most states allow gifts up to a certain amount per year without counting toward the threshold.
Another approach is to set up a trust that holds property in a way that reduces the taxable estate. Some people move to a state with no estate tax before they die, though this requires establishing residency and can be complicated. Talking to an accountant or attorney who knows your state's rules can help you understand what options might work for your situation.
Frequently Asked Questions
Do I have to pay both state and federal estate tax?
Only if your estate is large enough to owe both. The federal threshold is much higher than most state thresholds, so many estates owe state tax but not federal tax. If you owe both, you can usually deduct the state tax from the federal tax owed.
If I move to a state with no estate tax, will my heirs avoid the tax?
Only if you establish residency in that state before you die. straightforward owning property there is not enough. You need to show that you lived there, had a driver's license there, and intended to stay there. Moving just before death to avoid taxes can be challenged by the state you left.
Does a surviving spouse have to pay estate tax?
Usually not. Most states with estate taxes allow a marital deduction, which means money left to a surviving spouse is not taxed. The tax applies only to money that goes to children, other relatives, or non-relatives.
What is the difference between an estate tax and an inheritance tax?
An estate tax is paid by the estate before heirs receive money. An inheritance tax is paid by the heirs themselves. Inheritance taxes often have exemptions based on who inherits — spouses and children may pay nothing while more distant relatives pay a percentage.
Can I reduce my estate tax by giving money away while I am alive?
Yes. Most states allow annual gifts up to a certain amount without counting toward the estate tax threshold. Larger gifts may count, but the rules vary by state. An accountant can help you understand what you can give away without triggering taxes.