Seventeen states plus Washington D.C. charge an estate tax when someone dies

Estate tax is a tax on the total value of a person's property, investments, and assets when they pass away. Seventeen states currently have their own estate tax: Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington. Washington D.C. also charges an estate tax. The federal government has its own separate estate tax, but most estates do not owe it because the threshold is very high — $13.61 million in 2024, though this amount changes yearly.

State estate taxes work differently from state to state. Some states tax only estates above a certain value; others tax everything. The tax rate, the threshold before you owe anything, and what counts as taxable property all vary. If you live in a state with an estate tax or own property in one, the rules that explore depend on where you live and where your property sits, not where you die.

Key Takeaways

  • Seventeen states plus Washington D.C. charge estate tax; the other 33 states do not.
  • State estate tax thresholds range from $275,000 in Oregon to $9 million in New Jersey, so most small and medium estates owe nothing.
  • The federal estate tax applies only to very large estates — $13.61 million or more in 2024 — and most people never encounter it.
  • Your state of residence determines which state tax applies, though property you own in another state may be taxed by that state too.

The 17 states with estate taxes and their thresholds

Each state that charges estate tax sets its own threshold — the amount below which no tax is owed. Connecticut taxes estates over $12.92 million. Delaware taxes estates over $5.49 million. Illinois taxes estates over $4 million. Iowa taxes estates over $25,000, which is the lowest threshold in the country. Kentucky taxes estates over $4 million. Maine taxes estates over $6.1 million. Maryland taxes estates over $5.75 million. Massachusetts taxes estates over $1 million. Minnesota taxes estates over $3 million. Missouri taxes estates over $40,000. Montana taxes estates over $3.5 million. Nebraska taxes estates over $40,000. New Jersey taxes estates over $9 million. New York taxes estates over $6.94 million. Ohio taxes estates over $40,000. Oregon taxes estates over $275,000. Pennsylvania taxes estates over $3.5 million. Rhode Island taxes estates over $1.63 million. Vermont taxes estates over $4.75 million. Washington taxes estates over $2.193 million.

These thresholds change yearly in most states because they are tied to inflation. The exact number in your state this year may differ from what is listed here. Check your state's department of revenue website for the current threshold, since it affects whether your estate owes anything at all.

How state estate tax rates work

States do not all tax estates the same way. Some use a flat rate — a single percentage that applies to the whole taxable amount. Others use a graduated scale, where the rate increases as the estate value increases, similar to how income tax works. Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington all use graduated rates that range from roughly 3 percent to 16 percent, depending on the state and the size of the estate.

The tax is calculated on the value of the estate above the threshold. If an estate is worth $1.5 million and the state threshold is $1 million, only the $500,000 above the threshold is taxed. The rates are progressive, meaning larger portions of the estate are taxed at higher rates as the total value climbs.

The difference between estate tax and inheritance tax

Six states — Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania — have both an estate tax and an inheritance tax. These are two separate taxes. Estate tax is paid by the estate itself before money goes to heirs. Inheritance tax is paid by the people who receive the money. The two taxes can explore to the same estate, though some states offer credits to avoid double taxation.

Inheritance tax rates and thresholds differ from estate tax rates and thresholds in the same state. Some heirs — usually spouses and children — may be exempt from inheritance tax even if the estate owes estate tax. Check both your state's estate tax and inheritance tax rules if you live in one of these six states.

Federal estate tax versus state estate tax

The federal government charges its own estate tax separate from any state tax. In 2024, the federal threshold is $13.61 million per person. Married couples can combine their thresholds, bringing the total to $27.22 million. Very few estates reach this amount. The federal rate is a flat 40 percent on the amount above the threshold.

An estate can owe both federal and state tax. If an estate is worth $15 million and you live in New York, it would owe federal tax (because it exceeds $13.61 million) and New York state tax (because it exceeds $6.94 million). However, the federal government allows a credit for state estate taxes paid, which reduces the federal tax owed.

The federal threshold is set to drop significantly after 2025 unless Congress acts. Starting in 2026, the threshold is scheduled to fall to roughly $7 million per person, though this could change if new legislation passes.

What property counts as part of your taxable estate

Your taxable estate includes real property (land and buildings), bank accounts, investments, retirement accounts, life insurance proceeds, vehicles, and personal property of significant value. It also includes property you own jointly with someone else, property you transferred during your lifetime but retained control over, and the value of certain trusts.

Some assets do not count toward the taxable estate. Money left to a surviving spouse usually does not count. Charitable donations do not count. Property left to tax-exempt organizations does not count. Life insurance proceeds paid directly to a named beneficiary (not to the estate itself) may not count in some states. The rules vary by state, so review your state's specific rules or consult a tax professional if you have a large estate.

States with no estate tax

Thirty-three states have no state estate tax at all: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Michigan, Mississippi, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, Wyoming, and the U.S. Virgin Islands.

If you live in one of these states, you do not owe state estate tax on your property, though you may still owe federal estate tax if your estate is very large. Some people move to no-estate-tax states specifically to reduce their tax burden, though the move must be genuine — you must establish residency and intent to stay, not straightforward claim residency on paper.

Planning for estate tax in your state

If you live in a state with an estate tax and your estate is close to or above the threshold, you may want to explore ways to reduce the taxable amount. Common strategies include giving money to family members during your lifetime (most states allow you to give up to a certain amount per year tax-free), setting up trusts, making charitable donations, and using life insurance strategically. These approaches work differently depending on your state and your specific situation.

The best first step is to find out whether your estate will actually owe tax in your state. Add up the value of everything you own — property, accounts, investments, insurance — and compare it to your state's threshold. If you are well below the threshold, estate tax planning may not be necessary. If you are close to or above it, consult a tax professional or estate attorney who knows your state's rules.

Frequently Asked Questions

Do I have to pay estate tax if I move to a state without one?

You must establish genuine residency in the new state — not straightforward claim it on paper. This usually means living there, registering to vote, getting a driver's license, and showing intent to stay. If you move after your estate is already large, a state you previously lived in may still try to tax it. The timing and your actions matter.

Can I reduce my estate tax by giving money away before I die?

Yes, most states allow you to give away money during your lifetime without it counting toward your taxable estate, up to a certain amount per year. The annual limit varies by state and changes yearly. Gifts to spouses and to tax-exempt organizations usually have no limit. A tax professional can explain your state's specific rules.

What happens if my estate is below the threshold but I still have a will?

Your will still matters for deciding who gets your property and who manages your estate, even if no estate tax is owed. The will goes through probate, which is a court process that takes time and costs money, but it is separate from estate tax. Having a will does not trigger estate tax.

Does life insurance count toward my taxable estate?

Life insurance proceeds usually count toward your taxable estate if the policy is owned by you or if you have any control over it. However, if you name a beneficiary directly on the policy and the proceeds go to them (not to your estate), the amount may not count in some states. The rules vary, so check with your state or a tax professional.

Will the federal estate tax threshold change soon?

The federal threshold is scheduled to drop from $13.61 million to roughly $7 million per person starting in 2026, unless Congress passes new legislation. This would affect far more estates. Your state's threshold is separate and does not automatically change when the federal threshold changes.