Catherine M. Censullo, CPA
Total Control Money and Tax Tip


Sometimes I ponder where the best place is to retire. Have you ever thought about that? Have you ever considered relocating to another state when you retire? 

One of the things you may want to consider is what the impact will be on your estate tax and inheritance tax in both your current and potential new home in making your decision.

Did you know that there are nineteen states, plus the District of Columbia, that impose either an estate tax, an inheritance tax or both?

Maryland and New Jersey have both an inheritance tax and an estate tax, so they may not be the best states for you to die in with regard to having your heirs pay estate tax and inheritance tax.

So, in case you are currently living in or considering moving to these states, to help you evaluate, I thought you might like to see what the states are that have these estate taxes.

For estate tax purposes, here are the states, your latest exemption amounts, and the maximum estate tax rate:

STATE                        2015 EXEMPTION AMOUNT       TOP RATE

Connecticut                  $2 million                                        12%

Delaware                      $5.43 million                                   16%

District of Columbia    $1 million                                        16%

Hawaii                          $5.43 million                                   15.7%

Illinois                          $4 million                                        16%

Maine                           $2 million                                        12%

Maryland                      $1.5 million                                     16%

Massachusetts              $1 million                                        16%

Minnesota                    $1.4 million                                     16%

New Jersey                  $675,000                                          16%

New York                    $2.062 million/$3.125 million*       16%

Oregon                         $1 million                                        16% 

Rhode Island                $1.5 million                                     16%

Tennessee                    $5 million                                         9.5%

Vermont                       $2.75 million                                   16%

Washington                  $2.012 million**                             20%           

*   $2.062 million before April 1, 2015. $3.125 million on or after

     April 1, 2015.

** Plus an inflation adjustment to be determined.

Suppose, instead, you are worried about your heirs having to pay tax on the money they inherit from you.

The following states charge an inheritance tax as follows on the amount of assets you inherit from:

STATE                       2015 EXEMPTION AMOUNT         TOP RATE

Iowa                              None                                                15%

Kentucky                      $500                                                 16%

Maryland                      None                                                10%

Nebraska                      $10,000                                            18% 

New Jersey                   None                                                16%

Pennsylvania                None                                                15%           

Remember that for inheritance taxes there are often exceptions for your close relatives and in certain other cases. And, for example, Maryland and New Jersey provide offsets when your estate generates both estate and inheritance taxes are due.  

Also, remember that these statistics are for 2015 and are subject to change in future years from current and pending state legislation in various locations. Each state and jurisdiction has its own set of rules for applying these amounts, so you need to consult and obtain further information if you are considering your situation for a particular state or set of states. So, this information can only serve as a general guideline.

And if your state was not on either list, in 2015 as of this point in time, congratulations! You are not currently subject to state estate tax and your heirs are not subject to inheritance tax. But this, too, can change at any time, so keep current on any updates that occur.

So, if you live in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Virginia, West Virginia, Wisconsin, or Wyoming, you only need to worry about the federal estate taxes.

Evaluating the estate and/or inheritance aspects of a particular estate can be quite complex. If you wish to look more closely at your personal situation, or if you have any questions, please do not hesitate to call and set up an appointment.


Catherine M. Censullo, CPA

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