Estate and Inheritance Taxes
With the passage of the Tax Cuts and Jobs Act the federal estate tax filing threshold amount was increased, in fact more than doubled, from $5,490,000 for tax year 2017 to $12,920,000 for tax year 2023. While currently 32 states do not impose a “death tax”, there are 18 states who impose their own estate tax or inheritance tax. (Maryland has both!). While some states exempt the estate tax at the federal level others impose the tax at lower thresholds.
The state estate tax is a tax on all the decedents asset before they are distributed and is calculated on a net value or assets less their debts. The inheritance tax is imposed on the individual taxpayers who receive something from an estate. With the inheritance tax the immediate family is completely exempt while siblings, distant relatives and those unrelated receive small exemptions.
North Carolina does not impose an estate or inheritance tax; the estate tax was repealed in 2013. South Carolina does not have an inheritance tax and, since 2005, does not have an estate tax. New York State does impose a tax on estates for both residents and nonresidents. An estate return is required when a New York resident’s federal gross estate and the amount of “any includable gifts” exceeds the basic exclusion amount set forth by NYS at the time of death. A nonresident estate return is required when the estate holds any real or tangible property in NYS and the federal gross estate plus the amount of “any includable gifts” exceeds the basic exclusion amount at the time of death. The NYS basic exclusion amount changed to match the federal estate tax applicable exclusion amount on January 1, 2018.
The link below has an informative chart that shows which states have no tax, or the inheritance or estate tax (referred to as pick up tax) and their corresponding threshold amounts.
Laws are subject to change or phase outs.
The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax services information.
Call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730 as required to set up an appointment.
