Updated June 17, 2026
People use "estate tax" and "inheritance tax" as if they're the same thing. They aren't, and the difference decides who writes the check.
| Estate tax | Inheritance tax | |
|---|---|---|
| Who pays it | The estate, before distribution | The heir, after receiving assets |
| Federal version | Yes, 40% above $15M exemption | None exists |
| States that impose it (2026) | 12 states + DC | 6 states |
| Rate depends on | Size of the estate | Heir's relationship to the decedent |
Who actually pays an estate tax
Under the federal estate tax and all state estate taxes, the executor calculates the taxable estate, files the return, and pays any tax owed before a dollar goes to beneficiaries. The heirs receive less, but they do not write the check. Federal estate tax applies above $15 million per person in 2026. About 12 states and DC have their own estate taxes, with exemptions as low as $1 million in Oregon.
Who pays an inheritance tax, and how much
An inheritance tax is owed by the beneficiary after receiving assets. The rate and any exemption depend on the relationship between the decedent and the heir: a surviving spouse typically owes nothing, children face low rates or none, and distant relatives or unrelated recipients pay the highest rates. As of 2026, the six states with an inheritance tax are Iowa (phasing out), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland and New Jersey both impose an estate tax and an inheritance tax, so large estates in those states can face both.
Does this actually change what an heir receives?
If you live in an inheritance tax state, or inherit from someone who did, you may owe tax on what you receive even when the estate falls below the federal threshold. Rates run from under 1% to 18%, depending on the state and your relationship to the decedent. Spousal inheritance is almost universally exempt; close family members face low rates or none in most states.
Where to check your own state
See which states have an estate or inheritance tax for a full comparison. Use the estate tax calculator to model federal and state tax in one place.
Not legal or tax advice, just an explainer. State rules shift often, so verify your state's current treatment with an estate planning attorney or CPA before acting on it.
Model the estate-tax side
Federal and any of the 13 state estate taxes, estimated together in one place.