Federal and State Tax

The federal government and several states levy an estate tax on estates over a certain size.

Federal estate taxes only apply to very large estates. State estate taxes have slightly lower thresholds, but they only exist in a few states.

Read below to determine whether or not estate tax must be paid by your loved one’s estate. Note that tax thresholds are set by federal and state law, and thus can go up or down every year. We highly recommend you consult with an accountant, tax lawyer, or estate lawyer about which, if any, estate tax returns are needed.

Next Steps:

1. Determine if Estate Tax is Required:
   • Federal estate tax applies to very large estates with a threshold of $11.7 million in 2021.
   • State estate taxes exist in 12 states and Washington D.C., with lower thresholds than federal taxes.
   • Calculate the estate's total value, including non-probate assets, and subtract authorized deductions.
   • Consult with an estate attorney or tax professional to determine if estate taxes are owed.
2. Check State Residency or Property Ownership:
   • assess the state estate tax requirement if your loved one resided or owned property in Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, or Washington D.C., 
3. Verify Tax Deadlines:
   • In most states, the deadline for state estate taxes is the same as the federal estate tax deadline, which is typically nine months after the individual's passing.
   • Be aware that some states may grant extensions for filing but still require estimated tax payments within nine months.
4. Seek Professional Advice:
   • Consult an accountant, tax lawyer, or estate lawyer to gain a clear understanding of the specific tax obligations your loved one's estate may have.
   • If needed, contact a relevant accountant or lawyer for personalized guidance on handling estate taxes.