State Inheritance Tax Calculator

Understanding State Inheritance Tax

Inheritance tax is a state-level tax levied on the value of assets transferred from a deceased person’s estate to their beneficiaries. Unlike estate tax, which is paid by the deceased’s estate, inheritance tax is typically paid by the person inheriting the assets. Only a handful of U.S. states currently impose an inheritance tax, and the rates and exemptions vary significantly based on the state and the beneficiary’s relationship to the deceased.

This calculator helps you estimate the potential inheritance tax you might owe based on the deceased’s state of residence, your relationship to them, and the value of the assets you are inheriting. Understanding this tax is crucial for beneficiaries to accurately plan for their net inheritance and for estate executors to properly advise heirs.

How Inheritance Tax is Calculated

The calculation of state inheritance tax involves identifying the taxable portion of the inheritance and applying the relevant tax rate based on the beneficiary’s relationship to the deceased. Most states with an inheritance tax provide exemptions for certain beneficiaries, such as spouses and lineal heirs (children, grandchildren, parents).

The general formula is:

And your net inheritance after tax is:

Key factors influencing the calculation include:

• Deceased’s State of Residence: This determines which state’s inheritance tax laws apply.
• Relationship to Deceased: States often categorize beneficiaries (e.g., spouse, lineal heir, sibling, non-relative) with different tax rates and exemption thresholds. Spouses are typically exempt in all inheritance tax states. Lineal heirs often receive favorable treatment or exemptions.
• Value of Inherited Assets: The total fair market value of the property, cash, and other assets you are set to receive.

It’s important to note that some states, like Iowa, have phased out their inheritance tax for deaths occurring on or after specific dates (e.g., January 1, 2026, for Iowa).

Variables and Parameters

To use the State Inheritance Tax Calculator, you’ll need to provide the following information:

• Deceased’s State of Residence: Select the U.S. state where the deceased person resided at the time of their death. This calculator only lists states that currently impose an inheritance tax.
• Your Relationship to Deceased: Indicate your legal relationship to the person who passed away. This is a critical factor as tax rates and exemptions are heavily dependent on this relationship. Options typically include Spouse, Child/Lineal Heir, Sibling, Other Relative, and Non-Relative.
• Value of Inherited Assets: Enter the total fair market value of all assets you expect to inherit. This includes real estate, bank accounts, investments, personal property, and any other valuable items.

Example Scenarios

Let’s look at a few examples to illustrate how state inheritance tax can vary:

Scenario	State of Residence	Relationship to Deceased	Inherited Amount	Estimated Inheritance Tax	Net Inheritance After Tax
Pennsylvania - Child	Pennsylvania	Child/Lineal Heir	$750,000	$0	$750,000
Pennsylvania - Sibling	Pennsylvania	Sibling	$300,000	$36,000	$264,000
New Jersey - Non-Relative	New Jersey	Non-Relative	$150,000	$15,000	$135,000
Maryland - Other Relative	Maryland	Other Relative	$50,000	$3,000	$47,000
Iowa - Any Relationship (2026)	Iowa	Lineal Heir	$200,000	$0	$200,000

Official Sources and References

The information and calculations provided by this tool are based on the latest available guidelines from the respective state tax authorities for the 2026 tax year. For precise details and any updates, always consult the official sources:

• Pennsylvania Department of Revenue
• New Jersey Division of Taxation
• Maryland Comptroller of the Treasury
• Iowa Department of Revenue
• Kentucky Department of Revenue

Important Tips and Considerations

• State-Specific Rules: Inheritance tax laws are highly state-specific. What applies in Pennsylvania may not apply in New Jersey. Always verify the rules for the relevant state.
• Exemptions and Deductions: Be aware of any exemptions based on your relationship to the deceased or specific deductions allowed by the state (e.g., funeral expenses, estate administration costs). These can significantly reduce the taxable amount.
• Timely Filing: Inheritance tax returns typically have strict deadlines. Missing these deadlines can result in penalties and interest.
• Professional Advice: Estate planning and inheritance tax can be complex. For personalized advice, consider consulting with an estate attorney or a tax professional who specializes in inheritance and estate taxes.
• Federal Estate Tax: Remember that state inheritance tax is separate from federal estate tax. While most estates are exempt from federal estate tax due to high exemption thresholds, it’s an additional consideration for very large estates.
• Asset Valuation: Accurately valuing inherited assets is crucial. For complex assets like real estate or business interests, an appraisal may be necessary.