Inheritance Tax Calculator โ€” Estimate Your Tax Liability

Calculate how much inheritance tax you may owe based on the estate value, your relationship to the deceased, and applicable state or federal exemptions. Plan your estate and understand your tax obligations.

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๐Ÿ“Š Inheritance Tax Examples

Example 1: Large Estate with Federal Tax

Scenario: $20M estate, Pennsylvania, Non-relative beneficiary
Estate Value: $20,000,000
Federal Exemption: $13,610,000
Federal Taxable: $6,390,000
Federal Tax (40%): $2,556,000
State (PA @ 15%): $3,000,000
Total Tax: $5,556,000
Net Inheritance: $14,444,000

Example 2: Medium Estate - Spousal Exemption

Scenario: $5M estate, Maryland, Spouse beneficiary
Estate Value: $5,000,000
Federal Exemption: $13,610,000
Federal Tax: $0 (under exemption)
State (MD @ 0% Spouse): $0
Total Tax: $0
Net Inheritance: $5,000,000

Example 3: Small Estate with State Tax

Scenario: $500,000 estate, Kentucky, Sibling beneficiary
Estate Value: $500,000
Federal Exemption: $13,610,000
Federal Tax: $0 (under exemption)
State Exemption (KY): $1,000
State Taxable: $499,000
State Tax (KY @ 8% Sibling): $39,920
Net Inheritance: $460,080

Example 4: No State Tax

Scenario: $3M estate, No State Tax, Child beneficiary
Estate Value: $3,000,000
Federal Exemption: $13,610,000
Federal Tax: $0 (under exemption)
State Tax: $0 (no state inheritance tax)
Total Tax: $0
Net Inheritance: $3,000,000

๐Ÿ“ Inheritance Tax Formula

Federal Estate Tax
Taxable Estate = Estate Value - Federal Exemption
Federal Tax = Taxable Estate ร— 40%

Federal Exemption (2024): $13,610,000 per individual

Tax Rate: 40% on amount exceeding the exemption

Portability: Unused exemption can transfer to surviving spouse

State Inheritance Tax
Taxable Amount = Estate Value - State Exemption
State Tax = Taxable Amount ร— Applicable Rate

State exemption and tax rates vary by state and beneficiary relationship

Spouses are generally exempt from state inheritance tax

State Inheritance Tax Rates (2024)

State Exemption Spouse Child Sibling Other Relative Non-Relative
Iowa (IA) $25,000 Exempt 2% 4% 4% 4%
Kentucky (KY) $1,000 Exempt 4% 8% 12% 16%
Maryland (MD) $5,000,000 Exempt 0% 4% 8% 10%
Nebraska (NE) $40,000 Exempt 1% 6% 12% 18%
New Jersey (NJ) $25,000 Exempt 0% 8% 12% 16%
Pennsylvania (PA) $3,500 Exempt 0% 7% 12% 15%

How to Use This Calculator

Enter the Estate Value

Input the total value of the deceased person's estate including real estate, investments, cash, and other assets.

Select Your State

Choose the state where the deceased resided. Only six states impose inheritance taxes. If your state is not listed, select "No State Inheritance Tax."

Choose Your Relationship

Select how you are related to the deceased. Spouses are generally exempt from inheritance tax. Closer relatives typically receive more favorable tax rates.

Review Your Results

View your federal tax, state tax, total tax, and net inheritance. Use the breakdown section to see each step of the calculation.

Inheritance Tax Calculator Features

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Calculate Federal & State Tax
Calculate federal and state inheritance/estate tax based on current exemption amounts and rates.
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Relationship-Based Exemptions
Account for spousal and relationship-based exemptions that can significantly reduce or eliminate tax liability.
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Compare Across States
Compare inheritance tax across different states with varying exemption amounts and tax rates for different beneficiary types.
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Step-by-Step Breakdown
View a detailed step-by-step tax breakdown showing exactly how your net inheritance is calculated.

Understanding Inheritance Tax

Inheritance Tax vs. Estate Tax

An estate tax is paid by the estate itself before any assets are distributed to beneficiaries. The federal government only imposes an estate tax, not an inheritance tax. An inheritance tax is paid by the individual beneficiaries who receive the assets. Some states impose inheritance taxes, while others have estate taxes. Understanding the difference is crucial for effective estate planning.

Who Pays Inheritance Tax?

As of 2024, only six states impose an inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. In those states, the tax rate depends on both the value of the inheritance and the beneficiary's relationship to the deceased. Spouses are universally exempt, and direct descendants (children) typically enjoy lower rates than distant relatives or non-relatives.

Federal Estate Tax Exemption

The federal estate tax exemption for 2024 is $13.61 million per individual. This means estates valued below this threshold owe no federal estate tax. For married couples, portability allows the surviving spouse to use any unused exemption from the deceased spouse, effectively doubling the exemption to over $27 million. Estates exceeding the exemption are taxed at a flat 40% rate on the excess amount.

Tips to Minimize Inheritance Tax

Frequently Asked Questions (FAQ)

What is the difference between inheritance tax and estate tax?
An estate tax is paid by the estate before assets are distributed. An inheritance tax is paid by the beneficiaries who receive the assets. The federal government only has an estate tax. Some states have inheritance taxes, while others have estate taxes.
How much can I inherit tax-free?
There is no federal inheritance tax โ€” only an estate tax with a $13.61M exemption (2024). Six states have inheritance taxes: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Spouses are generally exempt from inheritance tax.
Do I have to pay inheritance tax on life insurance?
Life insurance proceeds paid to a named beneficiary are generally not subject to inheritance tax at the state level. However, if the estate is named as the beneficiary, the payout may be included in the estate value for federal estate tax purposes.
How can I minimize inheritance tax?
Strategies include: using annual gift exclusions ($18K per recipient in 2024), setting up trusts, making charitable donations, and proper estate planning with a qualified attorney.
What states have inheritance tax?
As of 2024, six states impose an inheritance tax: Iowa (2-4%), Kentucky (4-16%), Maryland (0-10%), Nebraska (1-18%), New Jersey (0-16%), and Pennsylvania (0-15%). Rates depend on the beneficiary's relationship to the deceased.
Is the federal estate tax exemption permanent?
The current $13.61M exemption (adjusted for inflation) is set to sunset after 2025, falling to approximately $7M per individual unless new legislation is passed. This makes estate planning especially important for estates over $5M.

About This Inheritance Tax Calculator

Our inheritance tax calculator helps you estimate federal and state tax liability on inherited assets. Whether you're a beneficiary trying to understand your tax obligations or an estate planner looking to minimize tax exposure, this tool provides accurate calculations based on current exemption amounts and tax rates.

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Up-to-Date Exemptions
Uses the 2024 federal exemption amount of $13.61M and current state-specific exemption and rate data.
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All Six Inheritance Tax States
Covers all states with inheritance taxes: IA, KY, MD, NE, NJ, and PA with accurate rates for each relationship type.
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100% Private
All calculations are performed in your browser. No financial data is stored or transmitted to our servers.
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Completely Free
Professional-grade inheritance tax calculations at no cost. No registration or subscription required.

Disclaimer: This inheritance tax calculator is for educational and planning purposes only. Tax laws are complex and subject to change. The federal estate tax exemption is scheduled to change after 2025. State laws may vary based on local regulations and recent legislation. Consult with a qualified tax professional or estate planning attorney for personalized advice regarding your specific situation.