Educational Overview for Advisors: State Death Taxes
The United States imposes a federal estate tax at death, which is based on the total value of the deceased person’s estate—everything a person owns at the time of death—and is paid from the estate itself.
In addition to the federal estate tax, some states assess their own taxes at death. One is a state-level estate tax, which functions similarly to the federal estate tax. In addition, a handful of states impose an inheritance tax, which is assessed on the person receiving the inheritance rather than on the estate.
State-level estate and inheritance taxes—often referred to collectively as death taxes—can significantly affect how much ultimately passes to a client’s loved ones. For this reason, understanding state death tax rules is an important part of creating a comprehensive estate plan.
Which States Collect a Death Tax?
As of 2025, the following states impose a state estate tax:
Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington.
The following states impose an inheritance tax:
Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Maryland is currently the only state that imposes both an estate tax and an inheritance tax.
Because these laws change over time, it is important to consult with a qualified professional to ensure that the most up-to-date information is being applied.
General State Death Tax Rules
Each state with an estate or inheritance tax has its own laws governing:
- How much of an estate is exempt from taxation
- What deductions may apply
- What tax rates are imposed
Regardless of these variations, an estate is generally subject to a state death tax only if the deceased person lived in the state or owned real estate or tangible personal property located in the state at the time of death.
State Death Tax Examples
The following examples illustrate situations in which an estate or inheritor may be subject to a state death tax and may help guide client discussions.
Deceased Person Resided in New York
If an individual lived in New York at the time of death, the estate may be subject to a New York state estate tax in addition to federal estate taxes. Whether state estate tax is owed depends on the total value of the estate and the deductions and exemptions available under New York law.
New York does not impose an inheritance tax, so beneficiaries would not be subject to inheritance tax in this situation.
Deceased Person Lived in Florida
If the deceased lived in Florida and owned no property in a state that imposes an estate tax, the estate would not be subject to any state-level estate tax because Florida does not impose one. Federal estate taxes may still apply.
Florida also does not impose an inheritance tax, so beneficiaries would not owe one.
Deceased Person Lived in Florida; Inheritor Lives in New York
If the deceased lived in Florida and owned no property outside Florida, the estate would not be subject to state estate tax. Because the deceased was not a New York resident and owned no property there, New York estate tax would not apply—even if the inheritor lives in New York.
No inheritance tax would be owed in this scenario.
Deceased Person Lived in Florida and Owned Property in New York
If a Florida resident owned real estate in New York at the time of death, the estate may be subject to New York estate tax—but only on the value of the New York property.
No inheritance tax would apply, as neither Florida nor New York imposes one.
Deceased Person Lived in Kentucky; Inheritor Lives in Florida
Kentucky does not impose an estate tax, so the estate would not owe state-level estate tax. However, Kentucky does impose an inheritance tax. As a result, the inheritor may owe inheritance tax based on the value of what is inherited (if over the applicable exemption), even though the inheritor lives in Florida.
Note for Snowbirds
A person’s state of residence determines which state’s estate tax laws apply. For example, if an individual resides in Connecticut for six months of the year and Florida for the other six months, but is considered a Connecticut resident, Connecticut estate tax rules would apply to the individual’s entire estate. This includes property located in Florida, even though Florida does not impose an estate tax.
Advisor Takeaway
As these examples illustrate, state death taxes are complex and may apply in unexpected ways—particularly for clients with multiple residences or property in more than one state.
If you are working with a client who lives in or owns property in a state with an estate or inheritance tax and have questions about how these rules may affect their estate plan, please call us at 708.448.5169. We are available to support you and collaborate as needed.
