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Inheritance Tax by State (2026): The 5 States That Still Have One

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Compare the state landscape

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Estate tax by stateOpen this related section of the library.Retirement taxes by stateOpen this related section of the library.Probate cost by stateOpen this related section of the library.Small-estate limits by stateOpen this related section of the library.KentuckyOpen this related section of the library.MarylandOpen this related section of the library.

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Updated July 23, 2026. Quick answer: Only 5 states still levy an inheritance tax in 2026: Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania — and Iowa left the list, with its inheritance tax fully repealed for deaths on or after January 1, 2025. Unlike an estate tax (paid by the estate before distribution), an inheritance tax is paid by the person who inherits, and the rate depends on your relationship to the deceased: spouses are exempt everywhere, children are exempt or near-exempt in most of these states, and unrelated heirs pay the top rates (up to 15–16%). Maryland is the only state that levies both an inheritance tax and an estate tax.

Fast routes: Estate tax by state | Retirement taxes by state | Probate cost by state | Small-estate limits by state

The 5 states with an inheritance tax in 2026

State2026 inheritance tax (rates by beneficiary class)Recent changesKey statutes
Kentucky yes – Class A (spouse, parent, child, grandchild, sibling, half-sibling, and – for deaths on or after 1/1/2026 – niece/nephew and half-niece/nephew): fully exempt; Class B (daughter/son-in-law, aunt/uncle, great-grandchild): $1,000 exemption, rates 4%-16%; Class C (all others): $500 exemption, rates 6%-16%. For a death before 1/1/2026 a niece or nephew was Class B and taxed at 4%-16% 2026 Ky. Acts ch. 198 (HB 869), secs. 40-41 – effective 4/27/2026 and applying to deaths on or after 1/1/2026 – moved nieces, nephews and their half-blood equivalents from the taxed Class B into the fully exempt Class A. The Department of Revenue’s website still lists the pre-2026 classes. KRS 140.070; KRS 140.080; 2026 Ky. Acts ch. 198
Maryland yes – 10% on ‘collateral’ beneficiaries (e.g., nieces/nephews, cousins, friends, unmarried partners); EXEMPT: spouse, children and other lineal descendants and their spouses, parents, grandparents, siblings, stepchildren/stepparents, and small transfers under $1,000 None enacted. Gov. Moore’s FY2026 budget proposals (repeal inheritance tax; cut estate exemption $5M -> $2M) were REJECTED – the Budget Reconciliation and Financing Act of 2025 (HB 352) left both taxes unchanged Md. Code, Tax-Gen. sec. 7-309(b); Md. Code, Tax-Gen. sec. 7-203; Md. Code, Tax-Gen. sec. 7-204
Nebraska yes – county-level tax, three classes (rates set by LB 310 (2022), effective for deaths on/after 1/1/2023, still current for 2026): Class 1 immediate relatives (parents, siblings, children, grandchildren) 1% above $100,000 exemption; Class 2 remote relatives (aunts/uncles, nieces/nephews and their descendants) 11% above $40,000; Class 3 all others 15% above $25,000. Exempt: surviving spouse, charities, and any beneficiary under age 22 None enacted 2024-2026. LB 468 (2025), which would have cut rates/raised exemptions (and earlier versions repealed the tax), advanced but was not enacted Neb. Rev. Stat. secs. 77-2004 to 77-2006 (as amended by LB 310, 2022)
New Jersey yes – Class A (spouse/civil union/domestic partner, parents, grandparents, children/grandchildren, stepchildren, mutually acknowledged children): exempt; Class C (siblings, spouse/surviving spouse or civil union partner of a child): first $25,000 exempt, then 11% up to $1.1M, 13% next $300K, 14% next $300K, 16% over $1.7M; Class D (everyone else): 15% on first $700,000, 16% above; Class E (charities, religious/educational/medical institutions, NJ government): exempt; transfers under $500 exempt none N.J.S.A. 54:34-1; N.J.S.A. 54:34-2
Pennsylvania yes – rates by relationship, from the first dollar (no exemption thresholds): 0% surviving spouse and parent-to-child under 21; 4.5% lineal heirs (children, grandchildren, parents); 12% siblings; 15% all others; charities/government exempt; family farm and family business exemptions available none enacted for 2024-2026 72 P.S. sec. 9116
What a $100,000 inheritance costs the heir in each of the five states that tax one, by relationshipTwenty horizontal bars grouped by state. In Kentucky an adult child, a sibling and a niece or nephew all pay nothing and only an unrelated heir is taxed, at $12,670. Maryland exempts the child and the sibling and charges $10,000 to everyone else. Nebraska charges nothing to a child or sibling at this share size, $6,600 to a niece or nephew and $11,250 to an unrelated heir. New Jersey exempts the child, charges the sibling $8,250 and everyone else $15,000. Pennsylvania charges every one of the four, from $4,500 on an adult child to $15,000 on an unrelated heir.What one $100,000 inheritance costs theperson who receives it, 2026Tax on a single beneficiary’s share, computedfrom each state’s own schedule.Kentucky’s nieces and nephews became exempt fordeaths from January 2026.tax charged to the heirexempt – no tax at any share sizeKentuckyadult child$0 – exemptsibling$0 – exemptniece or nephew$0 – exemptunrelated heir$12,670Marylandadult child$0 – exemptsibling$0 – exemptniece or nephew$10,000unrelated heir$10,000Nebraskaadult child$0 – exemptsibling$0 – exemptniece or nephew$6,600unrelated heir$11,250New Jerseyadult child$0 – exemptsibling$8,250niece or nephew$15,000unrelated heir$15,000Pennsylvaniaadult child$4,500sibling$12,000niece or nephew$15,000unrelated heir$15,000$0$5,000$10,000$15,000Computed from KRS 140.070 and 140.080; Md. Tax-Gen. 7-203 and7-204; Neb. Rev. Stat. 77-2004 to 77-2006; N.J.S.A. 54:34-2with the Division of Taxation’s form O-10-C; and 72 P.S.9116. Read from source August 2026.
Figure 1. One share of $100,000, four relationships, five states — every bar computed from that state’s own statutory schedule rather than from a rate quoted in prose, and each state’s published rates also have to match this page’s table above or the chart does not build. Three things a table of rates cannot show. Kentucky is now nearly empty: 2026 Ky. Acts ch. 198 (HB 869), secs. 40–41, moved nieces and nephews out of the taxed Class B and into the exempt Class A for deaths on or after January 1, 2026, so only an unrelated heir is left paying. Nebraska’s zeros are the tightest: its immediate-relative exemption is exactly $100,000, so this share escapes by a single dollar — at $150,000 the same child pays $500. And a sibling is not one relationship but three: exempt in Kentucky and Maryland, $8,250 in New Jersey, $12,000 in Pennsylvania. These are per-beneficiary shares, not estates: each heir is taxed on what they personally receive, so a single estate split four ways produces four separate calculations.

Iowa: repealed as of 2025

What applies to an Iowa inheritance now — and why the date of death is the only date that matters.

none – FULLY REPEALED for deaths on/after 1/1/2025. Iowa DOR: ‘Iowa inheritance tax is not applicable for deaths occurring on or after 1/1/25.’ Phase-out enacted by SF 619 (2021) reduced rates 20%/yr for deaths 2021-2024 If you inherited from an Iowa decedent who died in 2021–2024, phase-out-era rates may still apply to that estate — the date of death controls, not the date you receive assets.

No-tax state guide: Arkansas inheritance tax explains why Arkansas currently imposes neither an inheritance tax nor a separate state estate tax, plus the separate 2026 federal filing threshold.

How inheritance tax actually works (and who pays nothing)

Three rules cover most situations. First, the decedent’s state controls (plus the location of any real property) — living in Florida does not protect you from Pennsylvania’s tax on a Pennsylvania inheritance. Second, relationship class sets the rate: surviving spouses are exempt in all five states, and lineal heirs (children, grandchildren) are fully exempt in several and lightly taxed in the rest, while siblings, nieces/nephews, and unrelated heirs pay the top brackets. Third, life insurance paid to a named beneficiary generally passes outside the tax in these states — one of several reasons beneficiary designations are the cheapest estate planning that exists.

The effective inheritance-tax rate on an unrelated heir as the share grows, in the five states that levy oneFive lines on a plot running from a zero share to $500,000 across, and zero to sixteen percent up. Pennsylvania is flat at fifteen percent from the first dollar, New Jersey flat at fifteen percent above $500, and Maryland flat at ten percent above $1,000. Nebraska is zero until $25,000 and then climbs toward fifteen percent, and Kentucky climbs through its graduated brackets, overtaking Pennsylvania at about $333,000.Where each state’s tax on an unrelatedheir actually starts, 2026Tax as a share of the inheritance, for abeneficiary who is not a relative.Three of the five charge the full rate on thefirst dollar received.New Jersey is the dashed line running on top ofPennsylvania: both are flat 15%.0%5%10%15%KentuckyPennsylvaniaNew JerseyNebraskaMaryland$0$100k$200k$300k$400k$500kNebraska charges nothing below $25,000Kentucky passesPennsylvania at$333,000Same sources as figure 1. Each line is the tax an unrelatedbeneficiary owes divided by the share received; Maryland’sbegins above its $1,000 de minimis and New Jersey’s above$500.
Figure 2. The page’s own sentence — that Pennsylvania charges from the first dollar with no threshold at all — is the flat line that starts at full height on the left edge, and Maryland’s and New Jersey’s do the same a few hundred dollars in. Only two of the five ramp: Nebraska charges nothing until $25,000 and then approaches its fifteen percent from below, and Kentucky works up through eight statutory brackets — which means the ranking changes with the size of the share. Kentucky is the cheaper of the two for an unrelated heir below about $333,000 and the dearer above it, because its top bracket is sixteen percent against Pennsylvania’s flat fifteen. Read this figure for one relationship only: it is the unrelated heir, the person every one of these five states taxes hardest. A spouse pays nothing in all five, and figure 1 above shows how far apart the middle relationships sit.

Planning around it

Because the tax turns on relationship and state, the levers are concrete: lifetime gifting (all five states tax transfers at death, with look-back rules for deathbed gifts), titling and beneficiary designations that pass assets outside probate, and — for larger mixed-state situations — trust planning coordinated with the estate-tax thresholds and probate costs involved. Our estate planning cost guide prices the professional help in dollars.

Inheriting across state lines?

Cite this page: Clear Money Guide, “Inheritance Tax by State 2026,” compiled from state statutes and revenue-department sources, July 2026. https://clearmoneyguide.com/inheritance-tax-by-state/ — free to cite with attribution. Download the full dataset as CSV, or contact contact@clearmoneyguide.com for custom cuts.

Work out the number for your estate

Seven states publish a statutory percentage schedule, so probate cost there is arithmetic you can check — and in several of them the attorney and the personal representative are each entitled to the full amount, which doubles it. The probate cost calculator does that math for all 51 jurisdictions, cites the statute beside each result, and tells you whether your estate is small enough to skip full probate altogether.

Does any of this apply to you?

Be honest with the arithmetic before you move for it. Below $1,000,000 no US state estate tax applies anywhere — Oregon has the lowest threshold in the country and that is where it begins. Below roughly $2,000,000 only Oregon and Rhode Island reach you at all. For the large majority of estates the entire “escape the death tax” argument is irrelevant, and the only thing a move changes is your annual income tax — which, if you are leaving one of the 13 jurisdictions that already exempt retirement withdrawals, is also zero.

Inheritance tax is the exception: Kentucky, Nebraska, New Jersey and Pennsylvania charge the heir by relationship, and Pennsylvania does it from the first dollar with no threshold at all. Maryland is the only state that levies both. Test your own numbers with the comparison tool or the personalised ranker.

What probate costs on top

Inheritance tax is charged to the person receiving. Probate cost comes out of the estate before anyone receives anything, under a separate statute. Per-state probate cost:

Methodology

This page was materially reviewed on July 23, 2026. Rates and changes were compiled from state statutes and revenue-department publications and independently spot-verified against primary sources. Nothing here is tax, legal, or personalized financial advice; state tax law changes every year and individual circumstances control — verify with the cited statute or a tax professional before acting. See our Editorial Policy, Corrections, Affiliate Disclosure, and Disclaimer.

State deep dives: our statute-cited single-state guides quantify the inheritance tax with worked examples by heir class — Pennsylvania (4.5–15% from the first dollar), New Jersey (Class C/D rates and the $25,000 sibling exemption), Nebraska (the only county-levied inheritance tax — the LB 310 class tables) and Iowa (fully repealed for deaths on or after January 1, 2025) — alongside each state’s retirement-income and probate rules.

The 2026 gift figures, from the source: $19,000 per recipient per year with no return to file ($38,000 from a couple), against a lifetime exclusion of $15 million per person. Tuition and medical bills paid directly to the institution are unlimited and are not gifts at all.

These taxes are graded by relationship, and an unmarried partner is legally unrelated — how these taxes hit an unmarried partner.

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