Inheritance & Estate Tax Calculator
Estimate how much of an estate or inheritance is lost to tax — and how much the beneficiary actually keeps. Enter the estate value and an estimated tax rate to see gross value, estimated tax, and net inheritance. The 2026 federal estate tax exemption is $13.99 million per individual.
On this page: Calculator · 2026 exemptions & rates · How it works · State inheritance taxes · FAQs
Inheritance & estate tax calculator
Enter the estate or inheritance value and an estimated effective tax rate to see the tax owed and net amount kept.
Gross estate value: $
Estimated tax: $
Net inheritance: $
Effective tax rate: %
2026 federal estate tax: exemption and rates
The federal estate tax applies only to the taxable portion of an estate above the exemption threshold. In 2026, that exemption is $13.99 million per individual — meaning estates below that amount owe no federal estate tax at all.
Federal estate tax rates (2026)
| Taxable estate above exemption | Rate |
|---|---|
| $0 – $10,000 | 18% |
| $10,001 – $20,000 | 20% |
| $20,001 – $40,000 | 22% |
| $40,001 – $60,000 | 24% |
| $60,001 – $80,000 | 26% |
| $80,001 – $100,000 | 28% |
| $100,001 – $150,000 | 30% |
| $150,001 – $250,000 | 32% |
| $250,001 – $500,000 | 34% |
| $500,001 – $750,000 | 37% |
| $750,001 – $1,000,000 | 39% |
| Over $1,000,000 | 40% |
Rates above apply only to the taxable amount above the $13.99M exemption. A $15M estate has a taxable portion of roughly $1.01M — not the full $15M. The unlimited marital deduction means assets passed to a surviving US-citizen spouse are fully exempt from estate tax.
Key 2026 thresholds
| Threshold | Amount |
|---|---|
| Federal estate tax exemption (individual) | $13,990,000 |
| Federal estate tax exemption (married couple, with portability) | $27,980,000 |
| Annual gift tax exclusion | $19,000 per recipient |
| Top federal estate tax rate | 40% |
How estate and inheritance taxes work
Estate tax and inheritance tax are two distinct taxes that can apply to transferred wealth — but they work very differently.
- Estate tax is paid by the estate itself before distribution. The executor files an estate tax return, pays any tax owed from estate assets, and then distributes the remainder to beneficiaries. The federal government levies estate tax; so do some states.
- Inheritance tax is paid by the individual beneficiary after receiving assets. The federal government does not impose an inheritance tax. Only six states do: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Most Americans encounter neither. The $13.99M federal exemption means over 99% of estates owe no federal estate tax. And only six states levy inheritance tax, with exemptions that often protect spouses and immediate family entirely.
Stepped-up cost basis on inherited assets
When you inherit an asset — stock, real estate, or other investments — its cost basis is reset to the fair market value on the date of the original owner's death. This is called a step-up in basis. It means all appreciation that occurred during the deceased's lifetime is not subject to capital gains tax when you sell. Only gains that accrue after the date you inherited the asset are taxable.
Example: Your parent bought stock for $20,000. It was worth $100,000 at their death. Your stepped-up basis is $100,000. If you sell it later for $110,000, you owe capital gains tax on $10,000 — not $90,000.
Inherited IRAs and 401(k)s
Retirement accounts do not receive a step-up in basis. Withdrawals from an inherited traditional IRA or 401(k) are fully taxable as ordinary income in the year received. Non-spouse beneficiaries must generally withdraw the full balance within 10 years under current rules. Use the retirement withdrawal tax calculator to estimate the income tax on inherited retirement account distributions.
State inheritance and estate taxes
Twelve states and Washington D.C. impose their own estate tax, often with lower exemptions than the federal threshold. Six states impose inheritance tax on beneficiaries. Maryland is the only state with both.
States with estate tax (2026)
| State | Exemption | Top rate |
|---|---|---|
| Connecticut | $13.61M | 12% |
| Hawaii | $5.49M | 20% |
| Illinois | $4M | 16% |
| Maine | $6.8M | 12% |
| Maryland | $5M | 16% |
| Massachusetts | $2M | 16% |
| Minnesota | $3M | 16% |
| New York | $7.16M | 16% |
| Oregon | $1M | 16% |
| Rhode Island | $1.77M | 16% |
| Vermont | $5M | 16% |
| Washington | $2.193M | 20% |
| Washington D.C. | $4.528M | 16% |
States with inheritance tax (2026)
| State | Spouses exempt? | Children exempt? | Top rate |
|---|---|---|---|
| Iowa | Yes | Yes | 6% |
| Kentucky | Yes | Yes | 16% |
| Maryland | Yes | Yes | 10% |
| Nebraska | Yes | Yes | 15% |
| New Jersey | Yes | Yes | 16% |
| Pennsylvania | Yes | No (4.5%) | 15% |
Rates and exemptions change. Verify current rules with a state tax authority or estate attorney before making planning decisions.
Estate and inheritance tax planning tools
Large or complex estates benefit from professional guidance. For the income tax portion of an inherited estate — retirement accounts, sold assets, trust distributions — tax software handles the reporting.
- TurboTax — handles inherited IRA distributions, stepped-up basis calculations, and estate income reporting
- H&R Block — file with a tax professional for complex inheritance situations involving multiple asset types
- FreeTaxUSA — low-cost filing for straightforward inherited account distributions and investment income
Affiliate links — we may earn a commission at no cost to you.
Related retirement and tax calculators
- Retirement withdrawal tax calculator Estimate income tax on inherited IRA and 401(k) distributions
- Early retirement withdrawal tax calculator Estimate tax + 10% penalty on pre-59½ distributions from inherited accounts
- Retirement tax calculators — all tools Full overview of withdrawal, early distribution, and inheritance calculators
- Capital gains tax calculator Estimate tax on inherited assets sold after the step-up in basis
- Windfall & settlement tax calculator Estimate tax on large one-time receipts including legal settlements
Inheritance & estate tax: FAQs
What is the difference between estate tax and inheritance tax?
Estate tax is paid by the estate itself before assets are distributed to heirs — it reduces the total value of what is passed on. Inheritance tax is paid by the individual beneficiary after receiving assets, and is levied only in certain states. The federal government imposes an estate tax but no inheritance tax. Six states impose inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
How much can you inherit without paying federal estate tax in 2026?
The 2026 federal estate tax exemption is $13.99 million per individual ($27.98 million for married couples using portability). Estates below this threshold owe no federal estate tax. The top federal estate tax rate is 40% on the taxable portion above the exemption. This high exemption means the vast majority of estates — over 99% — owe no federal estate tax.
Do beneficiaries pay estate tax?
Generally no. Federal estate tax is paid by the estate before assets are distributed. Beneficiaries receive assets after the estate has settled any tax owed. However, if you live in one of the six states with an inheritance tax — Iowa, Kentucky, Maryland, Nebraska, New Jersey, or Pennsylvania — you may owe tax on what you receive, depending on your relationship to the deceased and the amount inherited.
Are inherited assets taxed when sold?
Inherited assets typically receive a stepped-up cost basis equal to the fair market value at the date of the original owner's death. This means any appreciation during the deceased's lifetime is not subject to capital gains tax when you sell. Only gains after the date of inheritance are taxable. For example, if you inherit stock worth $100,000 and later sell it for $120,000, only the $20,000 gain is taxable.
Is inheritance taxed as income?
In most cases, no. A cash inheritance is generally not treated as ordinary income by the IRS — you do not report it on your income tax return. However, income generated by inherited assets after you receive them (dividends, interest, rental income) is taxable income. Inherited traditional IRAs and 401(k)s are an exception: withdrawals from inherited retirement accounts are taxable as ordinary income.
Does this calculator include exemptions?
No. This calculator applies a flat estimated tax rate to the full estate or inheritance value and does not account for federal or state exemptions, deductions, marital deductions, or special rules for specific asset types. Use it to understand the proportional impact of a given tax rate. For estate planning purposes, consult a tax professional or estate attorney.