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How much money can you inherit before paying taxes?

Long ago: five states—New Jersey, Pennsylvania, Kentucky, Maryland and Nebraska—maintain inheritance taxes, as there is no federal levy.
State statutes assign beneficiary classes and tax rates, often exempting spouses, while personal representatives file returns with the New Jersey Division of Taxation or Pennsylvania Register of Wills.
Pennsylvania applies 4.5% to direct descendants and 15% to other heirs, with Nebraska's class system setting low and higher brackets plus age exemptions, and New Jersey's graduated schedule from a tax-free first $25,000 to over $1,075,000.
New Jersey's eight-month filing window carries a 10% annual interest for late payments, Kentucky sets an 18-month deadline with penalties, and some states offer a 5% discount or 10-year installment plans for large bills, the New Jersey Division of Taxation and Kentucky Department of Revenue say.
Estate planners recommend gifting and irrevocable trusts to reduce taxable inheritances, but state lookback rules apply; Iowa repealed state inheritance tax for deaths in 2025, while the federal estate tax exemption for 2025 is $13.99 million.

Insights by Ground AI