Estimate federal and state estate tax liability on inherited assets based on estate value, state of residence, and marital status.
Total Estate Tax Liability
$0
Effective Tax Rate0%
Federal Exemption Used$0
Federal Estate Tax$0
State Estate/Inheritance Tax$0
Net to Heirs$0
Click Calculate to see your estate tax summary and planning tips.
About Inheritance & Estate Tax Calculator
Estate and inheritance taxes can significantly reduce the value of assets passed to heirs, yet many Americans are unaware of their potential tax liability until it is too late. The federal estate tax applies to estates exceeding a certain exemption threshold ($13.99 million per individual in 2025, dropping to approximately $7 million in 2026 under current law), with rates ranging from 18% to 40%. Additionally, 17 states and Washington DC impose their own estate or inheritance taxes with much lower exemptions, often starting at $1-5 million. This Inheritance & Estate Tax Calculator estimates your total tax burden by combining federal and state taxes based on the estate value, state of residence, marital status, and tax year. Understanding these potential taxes is essential for effective estate planning and wealth transfer strategy.
How to Use This Calculator
Enter the total value of the estate including real estate, investments, retirement accounts, business interests, and personal property. Select the state where the deceased resided from the dropdown — states with estate or inheritance taxes are listed separately. Choose marital status (spouses inheriting everything typically pay no estate tax due to the unlimited marital deduction). Select the tax year to apply the correct federal exemption amount. Click Calculate to see the federal estate tax, state estate or inheritance tax, total tax, effective tax rate, and net amount passing to heirs. Review the planning tip for strategies to minimize your estate's tax burden.
When to Use This Calculator
Use this calculator during estate planning to estimate potential tax liability for your beneficiaries. It is essential when preparing wills and trusts to understand how much of your estate will actually reach your heirs. Executors use it to estimate taxes due before filing the estate tax return (Form 706). Financial advisors use it to structure trusts and gifting strategies for high-net-worth clients. Anyone with assets approaching $5-10 million should use this calculator annually, as the federal exemption is scheduled to decrease significantly in 2026. If you live in a state with its own estate tax, the calculator helps you decide whether relocation or trust planning in a different state could reduce taxes.
How to Interpret Your Results
A single person with a $3 million estate in New York in 2026 has no federal estate tax liability since the federal exemption is estimated at $7 million, but New York's estate tax exemption is approximately $6.11 million, so no state tax either — total tax liability is $0. However, a $10 million estate in New York owes federal tax on $3 million (excess over $7M exemption) at approximately $1,290,800 (using the 40% rate on the excess), plus New York state estate tax on $3.89 million excess over its $6.11M exemption at approximately $524,000, for a total of roughly $1.81 million in taxes. The effective tax rate is about 18.1%, and heirs receive approximately $8.19 million. Married couples filing jointly get two exemptions, effectively doubling the tax-free amount to $14 million in 2026.
What is the difference between estate tax and inheritance tax?
Estate tax is levied on the total value of the deceased person's estate before assets are distributed to heirs, and the estate itself pays the tax. Inheritance tax is levied on the individual beneficiaries who receive assets, with tax rates varying by their relationship to the deceased. At the federal level, only estate tax exists. At the state level, 13 states and D.C. impose estate taxes, while 5 states (Iowa, Kentucky, Nebraska, New Jersey, Pennsylvania) impose inheritance taxes. Maryland imposes both. Inheritance tax rates are typically lower for direct descendants (0-12%) and higher for distant relatives and non-relatives (12-24%). Estate taxes generally have higher exemptions ($1-13.99 million), while inheritance taxes often have much lower exemptions or apply from the first dollar.
How much can I inherit without paying taxes in 2026?
In 2026, the federal estate tax exemption is scheduled to drop from $13.99 million (2025) to approximately $7 million per individual, adjusted for inflation. This means an individual can leave up to $7 million to their heirs federal tax-free. Married couples can combine exemptions to pass up to $14 million tax-free using proper estate planning. For state estate taxes, exemptions vary widely from $1 million (Oregon, Massachusetts) to $13.99 million (Hawaii, Maine, Maryland). In inheritance tax states, exemptions range from $0 (Nebraska, Pennsylvania — tax from the first dollar) to $25,000-50,000 for non-exempt beneficiaries. Direct descendants (children, grandchildren) typically have higher exemptions or lower rates than non-relatives in inheritance tax states.
Does the marital deduction eliminate all estate taxes for married couples?
Yes, the unlimited marital deduction allows any amount of assets to pass to a surviving spouse free of federal estate tax and most state estate taxes. This means no estate tax is due when the first spouse dies, regardless of the estate size, if all assets pass to the surviving spouse. However, the surviving spouse's estate will include the combined assets, which may then exceed the applicable exemption when they pass away. For example, a $10 million estate left entirely to a surviving spouse pays zero tax on the first death but could owe $1.2 million in federal tax on the second death if the exemption has dropped to $7 million. This is why married couples use credit shelter trusts (also called bypass trusts) to maximize use of both spouses' exemptions and potentially save hundreds of thousands in taxes.
What strategies can reduce estate and inheritance taxes?
Several effective strategies can reduce or eliminate estate taxes. Annual gifting allows you to give up to $18,000 per recipient per year (2026) without reducing your lifetime exemption. Lifetime gifting uses your unified credit to transfer assets during your lifetime, removing future appreciation from your estate. Irrevocable life insurance trusts (ILITs) remove life insurance proceeds from your taxable estate. Charitable remainder trusts (CRTs) provide income during your lifetime with the remainder going to charity, generating a charitable deduction and reducing estate value. Family limited partnerships (FLPs) allow valuation discounts for transferring business interests. For state estate taxes, relocating to a state with no estate tax can save millions for residents of high-tax states like Massachusetts, Oregon, or Washington. Consult an estate planning attorney to determine which strategies apply to your situation.
Do beneficiaries pay taxes on inherited retirement accounts?
Yes, inherited retirement accounts (traditional IRAs, 401(k)s, 403(b)s) are subject to income tax when distributions are taken, though they are not subject to estate tax in most cases because the estate tax deduction for IRAs offsets the inclusion. Under the SECURE Act, most non-spouse beneficiaries must withdraw all assets within 10 years of the original owner's death, potentially creating significant income tax liability. For example, inheriting a $500,000 traditional IRA as a working professional could push you into a higher tax bracket when you withdraw it over 10 years, costing $50,000-100,000 in additional income taxes. Spousal beneficiaries can treat the inherited IRA as their own, deferring required minimum distributions until age 73. Roth IRAs inherited by non-spouses also fall under the 10-year rule, but distributions are tax-free since contributions were made with after-tax dollars.
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