CALCULATOR
Inheritance Tax Planner
Three taxes potentially hit an estate: federal estate tax (only the very wealthy), state estate tax (12 states + DC), and state inheritance tax paid by the heir based on their relationship (6 states). Plus the looming TCJA sunset that may halve the federal exemption. See what your specific situation faces.
Uses 2026 federal unified credit (~$13.99M individual). State data simplified. Educational only. Speak to an estate planning attorney before any decisions involving real money.
Estate Details
Above annual exclusion, counts toward unified credit
Three Taxes, Different Mechanics
Federal estate tax applies to the estate before assets reach heirs. The 2026 exemption is roughly $13.99M per individual ($27.98M for a married couple via portability). Above that, rates climb to 40%. Most Americans don't owe federal estate tax. The exemption is set to halve in 2026 if Congress doesn't extend the TCJA provisions.
State estate tax applies in 12 states plus DC. Exemptions are far lower than federal — Massachusetts is $2M, Oregon is $1M. A "modest" estate by federal standards can owe substantial state estate tax. State estate tax is also paid out of the estate, before assets reach heirs.
State inheritance tax (different from estate tax) applies in 6 states (PA, NJ, KY, NE, IA, MD). It's paid by the heir, not the estate, and the rate depends on their relationship to the decedent. Class A heirs (spouse, children) typically owe little or nothing. Distant relatives and non-relatives can owe 10-18%. Maryland has both estate and inheritance tax — the only state to layer them.
The big invisible benefit is step-up in basis. Inherited assets get their cost basis reset to fair market value at death. A $50,000 stock purchase that's worth $400,000 at death passes to heirs with a $400,000 basis — they only owe capital gains on appreciation after that. This often outweighs the inheritance tax for high-appreciation assets. Pair with the RMD calculator for retirement-account distribution planning, and the retirement projector to model the larger picture.