These 18 States Have the Highest Inheritance and Estate Taxes

SAVING & SPENDING - TAXES
Find out where your inheritance stands against the highest tax rates.
Updated May 8, 2024
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Dying in the wrong place can be expensive. That’s because some states levy estate or inheritance taxes (and sometimes both) on what you leave behind.

These taxes may sound similar, but estate taxes are assessed on and paid out of your estate before any assets are distributed. Inheritance taxes, on the other hand, are paid by your heirs after your estate is divided.

Here's a list of states with the fiercest death taxes to help you avoid throwing your money away instead of leaving it to your children.

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Washington

SeanPavonePhoto/Adobe Washington DC USA

Estate taxes in Washington State range from 10% to 20% and apply to all estates over $2.193 million.

This $2.193 million is what’s known as an “exemption threshold.” Your estate only pays taxes on the amount above that threshold.

Say your estate is worth $3.2 million, for example. In Washington, only roughly $1 million (the amount over the threshold) would be taxed.

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Illinois

Oleksii/Adobe Illinois state of United States flag waving

The Illinois estate tax kicks in for all estates worth more than $4 million, with a graduated tax rate that varies between 0.8% and 16%.

This means that the tax rate varies with the value of the estate itself. The higher the value of your estate, the closer you’ll get to that 16% rate.

New York

f11photo/Adobe Statue of Liberty and New York city skyline at sunset

New York’s estate tax applies only to estates above $6.94 million, and the estate tax rate ranges from 3.06% to 16%.

What’s different, however, is that New York enforces a tax “cliff.” If your estate exceeds that $6.94 million exemption threshold by 5% or more, the entire estate will be taxed, not just the amount over the threshold.

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Maine

haveseen/Adobe Portland Head Lighthouse at Cape Elizabeth

Thanks to a relatively high exemption threshold and a reasonable tax rate, Maine’s estate tax isn’t as formidable as some of its counterparts.

Their estate tax rate ranges from 8% to 12%, but since it only applies to estates over $6.8 million, most people can avoid it.

Vermont

SeanPavonePhoto/Adobe Burlington Vermont USA

Vermont doesn’t play around when it comes to collecting on sizable bequests. Estates over $5 million in value are subject to a flat estate tax of 16%.

That tax rate is far from minuscule, but since the exemption threshold is so high, the average estate likely won’t be impacted.

Massachusetts

kirkikis/Adobe classic New England town

The estate tax rate in Massachusetts varies from 0.8% to 16%. Like in other states, the effective estate tax rate depends entirely on the size of the estate.

Of note, however, is the low exemption threshold, at just $2 million.

Oregon

Josemaria Toscano/Adobe Portland Oregon Waterfront

Oregon is a state with an estate tax exemption threshold set at $1 million. Unlike Massachusetts, however, the estate tax rate in Oregon starts at a much higher rate.

In the Beaver State, you could lose between 10% and 16% of your total bequeathment to estate taxes.

Rhode Island

pabrady63/Adobe Discover Rhode Island

Rhode Island’s estate tax starts at a low rate of 0.8%. Don’t get too excited, though: The state’s exemption threshold is just $1,774,583 million.

Furthermore, depending on the value of your estate, that tax rate could jump all the way to 16%.

Connecticut

jonbilous/Adobe buildings in downtown New Haven Connecticut

Connecticut does have an estate tax, but it only applies to estates exceeding a certain threshold.

As of 2024, estates worth less than $13.61 million are exempt from Connecticut estate tax. This amount is adjusted annually.

If the estate value surpasses the exemption, a flat rate of 12% is applied to the amount exceeding the exemption.

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Washington, D.C.

Orhan Çam/Adobe Washington D.C. skyline at night

In Washington, D.C., estates worth $4.71 million or more are subject to the city’s estate tax.

The estate tax in the nation’s capital ranges from 11.2% to 16%, depending on the total value of the estate.

Hawaii

tomas del amo/Adobe Hawaii

Ranging from 10% to 20%, Hawaii’s estate tax rate is one of the higher ones on our list. Don’t panic, though. This tax only applies if your estate is worth at least $5.49 million.

Estates with a lower valuation won’t be subject to Hawaii’s estate tax, which means that most people won’t need to worry about it.

Minnesota

andreykr/Adobe Minnesota welcomes you sign

If your Minnesota estate is above $3 million, you won’t be able to avoid a double-digit estate tax rate.

Here, the estate tax starts at 13% on the low end and bumps up to 16% on the high end.

New Jersey

pabrady63/Adobe Philadelphia Sunset Skyline Refection

The Garden State doesn’t have an estate tax, but it does assess inheritance taxes. The rates owed depend on the relationship between the person who died and who is inheriting the estate.

But in the end, New Jersey’s inheritance tax can be as much as 16%, and it can apply to inherited assets worth $500 or more.

Nebraska

mikesch112/Adobe welcome to nebraska

In Nebraska, the deceased’s closest relatives pay the lowest inheritance tax: a mere 1% on property valued at $100,000 or more.

The tax rate bumps up to 13% for more distant relatives on any amount over $40,000 and up to 18% for non-family heirs on any amount over $25,000 inherited. 

Iowa

pabrady63/Adobe Des Moines Iowa City Skyline at Sunset

Iowa currently assesses an inheritance tax on estates worth more than $25,000. How much of that tax each heir pays depends, in part, on their relationship to the deceased.

That said, Iowa’s inheritance tax rate will decrease until 2025, when it will be repealed entirely.

Kentucky

Alexey Stiop/Adobe Kentucky Capitol

In Kentucky, direct relatives of the deceased aren’t subject to an inheritance tax.

However, all other heirs could be subject to a 4% to 16% tax. How much they’ll pay depends on their relationship to the person who died and on the value of what they inherit.

Pennsylvania

checubus/Adobe beautiful Pittsburgh at sunset

Interestingly, Pennsylvania’s inheritance tax doesn’t consider the value of the endowment. Instead, it’s solely based on the recipient’s relationship to the deceased.

The inheritance tax rate is 15% for non-relative heirs, 12% for siblings, and 4.5% for direct descendants. Spouses and parents of decedents under age 21 don’t pay any inheritance tax.

Maryland

SeanPavonePhoto/Adobe Annapolis Maryland USA Town Skyline

Maryland is the only state in the country that levies both an estate tax and an inheritance tax.

Here, only estates valued over $5 million are subject to the 0.8% and 16% estate tax. The inheritance tax rate currently stands at a maximum of 10%. Fortunately, many relatives are exempt.

Bottom line

KMPZZZ/Adobe female sitting on floor stressed and confused

Death taxes, also known as estate and inheritance taxes, may be nonexistent in your state or as high as 20%. 

While these taxes won’t necessarily ruin your finances, they can eat away at the inheritance you leave behind. And it’s something you’ll want to handle if you want to eliminate financial stress for your loved ones.

To mitigate this, you might want to shift how you think about financial planning after you retire. Remember that you’re no longer strategizing for yourself but instead are planning your legacy.

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Author Details

Sarah Sheehan Sarah Sheehan is a writer, educator, and analyst who focuses on the impact of health, gender, and geography on financial equity. Her ultimate goal? To live beyond the confines of chasing the next dollar — and to teach everyone else how to do the same.

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