Who is exempt from Inheritance Tax?

Are you exempt if the person who died lived in a state without inheritance tax?

Yes. If the person who passed away lived in a state that does not charge an inheritance tax — you simply do not owe that tax there. Washington is a good example; it obtains a state estate tax system — which is paid by the estate — not the beneficiary.

Which states still charge an inheritance tax in 2026?

Only 5 states charge an inheritance tax in 2026: 

• Kentucky
• Maryland
• Nebraska
• New Jersey
• Pennsylvania

Who is exempt in those five states?

Exemptions in these states generally vary with your relationship to the person who died. Nebraska also leverages age & dollar amount cutoffs. On state tax forms, it is possible to observe "exempt" described in distinct ways as outlined below:

• A 0% tax rate for the specific beneficiary group — like a spouse or child
• A full exclusion for specific organizations – generally charities & public entities
• No tax due because the value is under a specific limit — common in Nebraska

How do the exemptions differ by state?

They differ in accordance with how “close family” is defined & whether the state leverages a threshold level for non-spouse heirs.

Table sources: Kentucky Department of Revenue, Maryland Register of Wills, Nebraska Department of Revenue, New Jersey Division of Taxation, and Pennsylvania Department of Revenue.

How can you confirm exemption fast?

It is possible to verify the status by checking 3 facts before any property is distributed:

• The state where the person lived when they died
• Your legal relationship to them in parallel to that state's law
• Exactly what you received — some assets might generate income tax later even if they are exempt from inheritance tax

Want a yes/no answer? Contact Clarity Tax Group

If you want to be sure, reach out to Clarity Tax Group for a prompt review.

• Confirm the state rule & the beneficiary class
• Coordinate with the executor on forms & waivers and payment timing
• Explain what data is necessary for the personal tax return