When someone receives an inheritance in the United States, one of the first questions is how much they’ll have to pay in taxes. The answer, for the vast majority of heirs, is reassuring: at the federal level, tax is only due once very high estates are reached, and in 2026 the threshold rose even further. However, the story changes depending on the state, because some charge their own tax.

How much can be inherited without paying federal tax to the IRS The federal government applies an estate tax, but only when that estate exceeds a very high threshold. For 2026, thanks to the 2025 tax law (the One Big Beautiful Bill), the exemption rose to $15 million per person (it was previously $13.99 million), which is equivalent to $30 million per married couple. In practice, this means that the vast majority of inheritances pay no federal taxes at all: only the portion that exceeds that threshold is taxed, and only then does a rate of up to 40% apply.

The exemption was also set permanently and is adjusted each year for inflation. What is inherited is not considered income for the person receiving it, so in general it is not reported as such in income tax. Estate tax or inheritance tax: they are not the same In the United States there are two different types of taxes: - The estate tax: is paid by the deceased person’s estate, before distribution, and exists both at the federal level and in some states. - The inheritance tax: is paid by the person receiving the assets, depending on how much they inherit and what relationship they had with the deceased.

It does not exist at the federal level: only a few states collect it. The difference is key: in the first case, the inheritance is taxed as a whole; in the second, each heir is taxed according to what they receive. Which states charge estate tax In addition to the federal tax, twelve states and Washington D.C. apply their own estate tax, generally with much lower exemptions than the federal one (which makes it apply to more inheritances).

They are: - Connecticut - Hawaii - Illinois - Maine - Maryland - Massachusetts - Minnesota - New York - Oregon - Rhode Island - Vermont - Washington - District of Columbia Which states charge inheritance tax Another, smaller group charges the tax directly to the heir. There are five states: - Kentucky - Maryland - Nebraska - New Jersey - Pennsylvania In general, these taxes exempt the spouse and usually give preferential treatment to children and close relatives, while the highest rates fall on heirs with no family relationship. Maryland is the only state that charges both taxes at the same time.

In addition, Iowa eliminated its inheritance tax as of 2025.