Estate Tax by State (2026): Exemptions, Rates, and Who Pays

Twelve states plus Washington, D.C. still levy their own estate tax in 2026, with exemptions running from $1 million in Oregon to $15 million in Connecticut, and five states tax inheritances instead. Everyone else answers only to the federal estate tax, whose exemption is now a permanent, inflation-indexed $15 million per person. This page tracks estate tax by state with every exemption and rate verified against the state’s own revenue department or statute in July 2026, and each row links to that primary source.

The state layer is where real families get surprised: a $3 million estate owes nothing federally but can owe six figures in Oregon, Massachusetts, or Washington. Use the tables to check your state, then run your own numbers in our estate tax calculator or take the two-minute exposure quiz.

The short version (2026):
The federal exemption is a permanent $15 million (OBBBA). 12 states + DC levy an estate tax with far lower thresholds: Oregon is lowest at $1 million, Massachusetts taxes from $2 million, and Connecticut alone matches the federal $15 million. Hawaii’s 20% is the highest state top rate, and Washington’s rate rolled back from 35% to 20% for deaths on or after July 1, 2026. Five states tax inheritances (KY, MD, NE, NJ, PA); Maryland is the only state that levies both. Kentucky stopped taxing nieces and nephews for 2026 deaths, and Nebraska voters may repeal theirs this November.

The 2026 State Estate Tax Table: 12 States + DC

Last updated: July 6, 2026. This table of estate tax by state shows the exemption (the amount that passes tax-free), the top marginal rate, and whether the exemption rises with inflation. The watch-outs column flags the traps: cliffs, whole-estate math, and mid-year rate changes.

Exemptions shown are per person for deaths in 2026. “Top rate” is the highest marginal rate; most of these states use graduated brackets, so estates slightly over the threshold pay far less than the top rate suggests.

Key Findings From the 2026 Data

Put estate tax by state into one verified table and five patterns stand out:

• 33 states have no death tax at all. Only 12 states + DC tax estates, and 5 tax inheritances; Maryland alone does both.
• The state-federal gap is enormous. The federal exemption is $15 million; every state except Connecticut sets its threshold between $1 million and $7.35 million. Estates in that band owe state tax while owing the IRS nothing.
• Oregon’s $1 million threshold is one-fifteenth of the federal exemption and has not moved since 2012. A paid-off Portland house plus retirement savings clears it routinely.
• Hawaii charges the highest state top rate (20%) and is also one of the only states offering couples portability of the exemption.
• Rates are moving down, not up, in 2026: Washington’s top rate rolled back from 35% to 20% on July 1, Kentucky exempted its Class B heirs, and Nebraska may put full repeal on the November ballot.

How State Estate Taxes Actually Work

Three mechanics decide what a family actually pays, and they differ state to state:

Excess-only vs. whole-estate math. Most states tax only the amount above the exemption. Massachusetts is the exception that surprises people: the tax is computed on the entire estate and then reduced by a $99,600 credit, so crossing $2 million by a dollar costs far more than a dollar of tax base.

Graduated brackets vs. flat rates. Connecticut (12%) and Vermont (16%) apply one flat rate to the excess. The rest climb through brackets, which is why a $3.2 million Oregon estate pays near the 10% bottom rate, not the 16% headline.

Where you own property counts, not only where you live. A Florida resident with a Vermont lake house or Oregon rental owes those states estate tax on the in-state property share. That cross-border exposure is the most common miss we see in DIY plans; our probate cost estimator covers the parallel court-cost problem.

The Federal Layer: $15 Million and Permanent

The One Big Beautiful Bill Act (July 2025) ended a decade of sunset anxiety by writing a $15 million basic exclusion into IRC §2010(c)(3) for deaths after December 31, 2025, indexed for inflation from 2027. Portability lets a surviving spouse claim the unused portion, sheltering up to $30 million per couple, and the top federal rate stays 40% above the exemption.

Practical consequence: federal estate tax now touches only a very small share of estates, and the planning action has shifted to the state tables above. If your estate sits between your state’s threshold and $15 million, you are in the zone where a living trust, lifetime gifting, or retitling assets does the real work. A will alone does not reduce either tax; our last will guide explains what it does and does not control.

The Five States With an Inheritance Tax

An estate tax is paid by the estate before distribution; an inheritance tax is owed by the person who receives the money, with the rate set by their relationship to the deceased. Spouses are exempt everywhere; close family usually pays little or nothing.

Iowa fully repealed its inheritance tax for deaths on or after January 1, 2025, so it no longer appears in this table.

Cliffs, Credits, and Other Traps

• New York’s 105% cliff. Stay under $7,350,000 and you owe nothing. Exceed roughly $7,717,500 (105% of the exemption) and the exemption vanishes entirely, taxing the estate from dollar one. Estates near the line use charitable “Santa Clause” bequests to stay under it.
• Massachusetts’ whole-estate math. The $99,600 credit mimics a $2 million exemption, but because tax is computed on the full estate, the effective bill grows faster than the excess-only states.
• Washington’s split year. A death in June 2026 uses a $3,076,000 exclusion and rates up to 35%; a death in July 2026 uses $3,000,000 and a 20% top rate. The date on the death certificate changes the bill.
• Frozen exemptions are stealth tax increases. Oregon ($1M since 2012), Illinois ($4M since 2013), Massachusetts, Minnesota, Vermont, and Hawaii do not index, so inflation pulls more ordinary estates over the line every year.

What Changed in 2025 and 2026

• Federal $15 million made permanent (OBBBA, signed July 4, 2025), replacing the scheduled 2026 drop to roughly half that.
• Washington raised, then rolled back: the top rate jumped to 35% for deaths from July 2025 through June 2026, then returned to 20% on July 1, 2026.
• Kentucky exempted Class B heirs (nieces, nephews, aunts, uncles, in-laws) for deaths on or after January 1, 2026.
• Indexed states ticked up: New York to $7,350,000; Maine to $7,160,000; DC to $4,988,400; Rhode Island to $1,838,056. Connecticut rode the federal jump to $15 million.
• Nebraska repeal referendum: organizers are collecting signatures to put full inheritance-tax repeal on the November 2026 ballot.
• Iowa’s inheritance tax stayed dead (repealed for deaths from 2025).

Net effect: for the first time in years, estate tax by state is drifting looser rather than tighter, with one big asterisk for the frozen-exemption states, where inflation quietly raises the tax every year.

How We Verified This Data

Every row of this estate tax by state table was checked in July 2026 against a primary source: the state revenue department’s estate-tax page, the official annual advisory (Rhode Island’s ADV 2025-27, for example), the state legislature’s bill record (Kentucky’s HB 775), or the IRS for the federal figures. The source column links to the exact page used, so any figure can be re-verified in one click.

Two presentation choices to know: exemptions are stated per person for 2026 deaths, and where a state changed rules mid-year (Washington), the table shows the rule in force now with the earlier regime flagged in the watch-outs column. When a state publishes next year’s indexed figure, we update the row and the date stamp above the table; this page is maintained as a standing reference.

Cite, Download, or Embed This Data

Journalists, planners, and researchers are welcome to use this table with a link back to this page as the source.

The CSV mirrors the tables above: jurisdiction, tax type, 2026 exemption, top rate, indexing status, and source URL. Spot a state that moved before we did? Tell us through the contact page and we will re-verify against the official source and update the row.

Do You Actually Have Estate-Tax Exposure?

For most readers the honest answer is no: 33 states levy nothing, and the federal line sits at $15 million. Check estate tax by state in the table, then count what a taxable estate includes, because this is where people undercount: home equity, retirement accounts, and the death benefit of life insurance you own all stack into the total. A $900k house, $800k of retirement money, and a $1.5 million term policy is a $3.2 million estate, over the line in Oregon, Massachusetts, Minnesota, Rhode Island, and Washington.

If you land over your state’s threshold, the fixes are structural, not exotic: spousal planning that uses both exemptions (remember most states have no portability), lifetime gifts that shrink the taxable estate, an irrevocable life-insurance trust for the policy, or in cliff states, keeping the estate under the line. Start with the exposure quiz, and if a will amendment is all you need, a codicil is the light-weight tool. This is information, not tax advice; a fee-only estate attorney or CPA prices the actual move.

Frequently Asked Questions

Which states have an estate tax in 2026?

Twelve states plus Washington, D.C.: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and DC. Exemptions range from $1 million in Oregon to $15 million in Connecticut.

What is the difference between an estate tax and an inheritance tax?

An estate tax is paid by the estate itself before anything is distributed, based on the estate’s total size. An inheritance tax is paid by the person who receives the assets, at a rate set by how closely they were related to the deceased. Five states levy inheritance taxes in 2026: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state with both.

What is the federal estate tax exemption for 2026?

$15 million per person, set permanently by the One Big Beautiful Bill Act and indexed for inflation starting in 2027. With portability, a married couple can shelter up to $30 million. Amounts above the exemption are taxed at rates up to 40 percent.

Which state has the lowest estate tax exemption?

Oregon, at $1 million, unchanged since 2012 and not indexed for inflation. Massachusetts and Rhode Island are next at $2 million and $1,838,056. Because home equity and retirement accounts count, ordinary households clear these thresholds more often than people expect.

Do beneficiaries pay tax on what they inherit?

In 45 states, no: inherited money is not income, and any estate tax was already paid by the estate. In Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania, some beneficiaries owe inheritance tax based on their relationship to the deceased; spouses are exempt in all five, and close family usually pays little or nothing.

How do people reduce state estate tax legally?

The standard tools are lifetime gifting to shrink the estate, trust planning that uses both spouses’ exemptions in states without portability, moving life insurance into an irrevocable trust so the death benefit is excluded, and in cliff states like New York, keeping the taxable estate under the threshold. Which tool fits depends on the state and the numbers, so treat this as a map, not advice.

Sarah Jenkins

Sarah Jenkins writes about family law and estate planning for ClearLegalTips. She focuses on making wills, trusts, divorce, and custody decisions understandable for everyday readers handling them without a lawyer.