Inheritance tax by state (2026): who pays and how much
Direct answer: Five states tax inheritances for 2026 deaths: Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. The heir's relationship to the person who died sets the rate. Spouses pay nothing in all five, and children pay nothing except in Pennsylvania (4.5%) and Nebraska (1% over $100,000). Iowa ended its tax in 2025; Tennessee in 2016.
Quick Q&AWhich states have an inheritance tax in 2026?
Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Iowa's inheritance tax isn't imposed for deaths on or after Jan. 1, 2025 (Iowa Code 450.98), and Tennessee's isn't imposed after Dec. 31, 2015.
Do I pay inheritance tax if I live in a different state?
It depends on where the person who died lived, and where any real estate is, not where you live. Kentucky, for example, taxes all property of a Kentucky resident except real estate in another state, plus Kentucky property of a nonresident.
Does a spouse pay inheritance tax?
No. All five states exempt a surviving spouse: Kentucky Class A, Maryland, Nebraska, New Jersey Class A, and Pennsylvania at 0%.
Do children pay inheritance tax?
Not in Kentucky, Maryland or New Jersey. Pennsylvania charges 4.5% (0% for a child 21 or younger inheriting from a parent). Nebraska charges 1% on the amount over $100,000, and nothing to anyone under 22.
What is the Pennsylvania inheritance tax rate?
0% for a spouse, 4.5% for children, grandchildren and other lineal heirs (and a child's spouse), 12% for siblings and 15% for others. Paying within 3 months of the death earns a 5% discount; the tax is delinquent after 9 months.
Do nieces and nephews pay Kentucky inheritance tax?
Not for deaths on or after Jan. 1, 2026. A 2026 law moved nieces and nephews (including half blood) into Class A, which is fully exempt. Before 2026 they were Class B ($1,000 exempt, then 4% to 16%).
Is life insurance subject to inheritance tax?
In Maryland and New Jersey, life insurance paid to a named beneficiary (not the estate) is exempt from inheritance tax, per each state's rules. Check the state's own guidance for other states.
Only five states tax heirs for 2026 deaths: Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. A spouse pays nothing in all five. Children pay nothing except in Pennsylvania (4.5%) and Nebraska (1% of the amount over $100,000). What counts is where the person who died lived, not where you live.
The math:
You inherit $100,000 from a parent who lived in Pennsylvania: 4.5% x $100,000 = $4,500 ($4,275 if paid within 3 months). From a Pennsylvania aunt: 15% = $15,000.
The same $100,000 from a Nebraska parent: 1% x ($100,000 - $100,000) = $0. From a New Jersey friend: 15% = $15,000. From a Maryland friend: 10% = $10,000.
Class B: $1,000 exempt, 4% to $10,000, 5% to $20,000, 6% to $30,000, 8% to $45,000, 10% to $60,000, 12% to $100,000, 14% to $200,000, 16% above. Class C: $500 exempt, 6% to $10,000, 8%, 10%, 12%, 14% to $60,000, 16% above. Our math matches the Kentucky guide's chart at every bracket. Sources: KRS 140.070 · KRS 140.080 · KY guide chart.
Kentucky. Class A (exempt): spouse, parent, child (by blood, stepchild, or adopted as an infant), grandchild, brother, sister (incl. half), and for deaths on or after Jan. 1, 2026, niece and nephew (incl. half blood). Class B: son- or daughter-in-law, aunt, uncle, great-grandchild. Class C: everyone else, including cousins. The state's web page still lists nieces and nephews as Class B; the 2026 statute moved them. KRS 140.070 · Kentucky DOR
Maryland. Exempt: spouse, parent, grandparent, child or stepchild and their descendants, spouse of a child, brother, sister, registered domestic partner, and 501(c)(3) charities. Siblings have been exempt since July 1, 2000. Everyone else pays 10% of the clear value (value minus expenses). Md. Tax-Gen. 7-203/7-204 · MD Register of Wills
Nebraska. Immediate relatives (parent, grandparent, sibling, child, lineal descendant, someone the deceased stood as a parent to for 10+ years, and their spouses): 1% over $100,000. Uncle, aunt, niece, nephew, their descendants and spouses: 11% over $40,000. Others: 15% over $25,000. Spouse and anyone under 22: exempt. Neb. Rev. Stat. 77-2004
New Jersey. Class A (no tax): spouse, parent, grandparent, child, adopted child, a child's descendants, stepchild. Class C: brother, sister (incl. half), son- or daughter-in-law. Class D: everyone else (step-grandchildren and step-siblings are Class D). Class E: the state, charities and certain institutions (exempt). NJ Division of Taxation · NJ IT-R instructions
Pennsylvania. 0%: spouse; a child 21 or younger inheriting from a parent; a parent inheriting from a child 21 or younger. 4.5%: grandparents, parents, children and other lineal descendants, and a child's spouse. 12%: siblings. 15%: everyone else. Charities and government are exempt. PA Dept. of Revenue · PA Tax Reform Code 2116
States that ended their inheritance tax
Iowa: not imposed for deaths on or after Jan. 1, 2025 (Iowa Code 450.98).
Pennsylvania: due at death and delinquent 9 months later; paying within 3 months earns a 5% discount (PA Dept. of Revenue).
Maryland: tax on probate property is paid with the estate's Administration Account; on non-probate property, when the Register of Wills sends an invoice, with a 10% penalty if not paid within 30 days (MD Register of Wills).
New Jersey: figured one beneficiary at a time; life insurance paid to a named beneficiary and property held by spouses as tenants by the entirety aren't taxed (NJ IT-R instructions).
Kentucky: taxes all property of a Kentucky resident except real estate in another state, plus Kentucky real estate and personal property of a nonresident (Kentucky DOR).
Federal: the federal estate tax is separate and applies only to estates above the 2026 basic exclusion of $15,000,000; see gift and estate tax 2026.
State estate taxes (charged to the estate, not the heir) are a different list that this page doesn't cover.
Facts and arithmetic only, not tax or legal advice. Rates are from each state's statute or tax agency, read on the dates below. The estimator ignores debts, expenses, nonresident proration, farm and business exemptions, and trusts.
Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Iowa's inheritance tax isn't imposed for deaths on or after Jan. 1, 2025 (Iowa Code 450.98), and Tennessee's isn't imposed after Dec. 31, 2015.
Do I pay inheritance tax if I live in a different state?
It depends on where the person who died lived, and where any real estate is, not where you live. Kentucky, for example, taxes all property of a Kentucky resident except real estate in another state, plus Kentucky property of a nonresident.
Does a spouse pay inheritance tax?
No. All five states exempt a surviving spouse: Kentucky Class A, Maryland, Nebraska, New Jersey Class A, and Pennsylvania at 0%.
Do children pay inheritance tax?
Not in Kentucky, Maryland or New Jersey. Pennsylvania charges 4.5% (0% for a child 21 or younger inheriting from a parent). Nebraska charges 1% on the amount over $100,000, and nothing to anyone under 22.
What is the Pennsylvania inheritance tax rate?
0% for a spouse, 4.5% for children, grandchildren and other lineal heirs (and a child's spouse), 12% for siblings and 15% for others. Paying within 3 months of the death earns a 5% discount; the tax is delinquent after 9 months.
Do nieces and nephews pay Kentucky inheritance tax?
Not for deaths on or after Jan. 1, 2026. A 2026 law moved nieces and nephews (including half blood) into Class A, which is fully exempt. Before 2026 they were Class B ($1,000 exempt, then 4% to 16%).
Is life insurance subject to inheritance tax?
In Maryland and New Jersey, life insurance paid to a named beneficiary (not the estate) is exempt from inheritance tax, per each state's rules. Check the state's own guidance for other states.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.