Inheritance and estate tax by state, 2026: the same inheritance, five very different bills

Key findings

• An adult child inheriting $500,000 pays nothing in Kentucky, Maryland and New Jersey — but $4,000 in Nebraska (0.8%) and $22,500 in Pennsylvania (4.5%).
• A niece or nephew inheriting the same amount owes between $50,000 in Maryland and $75,000 in New Jersey. No state lets a niece or nephew off entirely.
• A $5,000,000 estate owes state estate tax in 7 of the 13 jurisdictions — from $1,299 in the District of Columbia to $425,000 in Oregon — and $0 federal estate tax everywhere, because the 2026 federal exemption is $15,000,000.
• At $3,000,000, only Oregon, Rhode Island and Massachusetts collect anything at all.

Inheritance tax on a $500,000 inheritance, by state and beneficiary

Five states still charge an inheritance tax, paid by the person who receives the money. Each row is the tax owed by one beneficiary who inherits $500,000 outright from someone who died on September 1, 2026.

Why the gaps: Pennsylvania and New Jersey tax non-family from the first dollar at 15%; Maryland is a flat 10% with a $1,000 all-or-nothing exemption; Kentucky and Nebraska use graduated brackets after an exemption — Nebraska's $100,000 Class I exemption is why its child figure is so low, and Kentucky's Class C treatment of unrelated heirs is why its friend figure is the highest of the five.

State estate tax on a $3M, $5M and $10M estate

Twelve states and the District of Columbia charge an estate tax, paid by the estate before anything is distributed. Each row is the state tax for a single decedent (no marital deduction, no portability) with the taxable estate shown and no itemized deductions, dying on September 1, 2026. Federal estate tax is $0 in every case. Sorted by the $5M column.

* The engine flags this state's result as an approximation for this date of death (Washington's rules changed on July 1, 2025 and again on July 1, 2026; the figure shown uses the regime in force on the scenario date). New York's $10M figure reflects its cliff: an estate more than 5% over the exemption loses the exemption entirely and is taxed on the whole amount.

Methodology and assumptions

• Every figure is generated at build time by the same code that powers the Inheritance Tax Calculator and the Estate Tax Calculator; nothing on this page is typed by hand, and an automated test pins each number so a change in the underlying law data changes the page and the test together.
• Inheritance scenarios: one beneficiary inherits $500,000 outright, no life insurance, beneficiary is an adult (Nebraska's under-22 rule does not apply), and the transfer is not from a child to a parent (Pennsylvania's 0% exception does not apply). "Unrelated friend" uses each state's catch-all class.
• Estate scenarios: single decedent, taxable estate equals the amount shown (no deductions), no lifetime taxable gifts, no DSUE. State tax only; federal tax is $0 under the 2026 exemption of $15,000,000.
• Rates, exemptions and class definitions are cited to each state's statute or revenue department on the linked state pages, last verified August 27, 2026.

Go deeper

• Understanding inheritance tax in 2026 — who pays, how the classes work, and how to reduce what is owed.
• Understanding federal estate tax in 2026 — the $15M exemption, portability, and how state and federal interact.
• State pages: Kentucky inheritance tax, Maryland inheritance tax, Nebraska inheritance tax, New Jersey inheritance tax, Pennsylvania inheritance tax.