What states have an inheritance tax for 2018? This is a question that often arises for individuals who are either planning their estate or considering the implications of inheriting property. The United States has a complex tax system when it comes to inheritance, with some states imposing an inheritance tax while others do not. Understanding which states are affected by this tax can help individuals make informed decisions about their financial planning and estate management.
As of 2018, only a handful of states in the United States impose an inheritance tax. These states are:
1. Iowa
2. Kentucky
3. Maryland
4. New Jersey
5. Pennsylvania
6. Tennessee
7. Texas
It is important to note that while these states have an inheritance tax, the tax rates and exemptions can vary significantly. For example, Pennsylvania has a progressive tax rate, ranging from 4.5% to 15%, depending on the relationship between the decedent and the heir. In contrast, Texas has a flat tax rate of 13% on all inheritances over $5.3 million.
In addition to the states listed above, several other states have inheritance taxes that are tied to the federal estate tax. This means that if the estate’s value exceeds the federal estate tax threshold, the inheritance tax will be imposed. These states include:
1. Delaware
2. Maine
3. Minnesota
4. Oregon
5. Rhode Island
6. South Carolina
7. Vermont
The federal estate tax threshold for 2018 was $11.18 million for individuals and $22.36 million for married couples. If an estate’s value exceeds this threshold, the inheritance tax in these states will apply to the excess amount.
Understanding the inheritance tax laws in each state is crucial for estate planning purposes. It is advisable to consult with a tax professional or an estate planning attorney to ensure that your estate is structured in a way that minimizes the tax burden on your heirs. Additionally, individuals who are considering moving to a different state should be aware of the potential impact of the inheritance tax on their estate.
In conclusion, while the majority of states in the United States do not have an inheritance tax, there are still several states that impose this tax. It is essential for individuals to be aware of the inheritance tax laws in their state or the state where they plan to reside in order to make informed decisions about their estate planning and financial future.
