Does Your State have an Estate Tax or Inheritance Tax for 2013?

Less than half of the states in America collect estate tax or inheritance tax at a state level. Only two states collect both estate tax and inheritance tax at the local level. These two states are Maryland and New Jersey. State laws are constantly changing, but here is a list of the currently listed states that are collecting estate tax or inheritance tax at a local level.

In 2010, four states decided to do away with their estate taxes. These four states are Illinois, North Carolina, Oklahoma, and Kansas. One year later, Illinois and North Carolina reinstated their estate tax laws, motivating the state residents to pay this expense once again. In Rhode Island, the 2013 tax exemption is set at $910,725. This inflated from $892,865 in 2012.

The state of Hawaii has an estate tax on the state level that was established in 2010. The state of Delaware currently has an estate tax in place, but it is slated to disappear on July 1st, 2013. There is a possibility that the tax will be renewed, but you will need to talk to a Delaware probate professional if you would like more details on this situation.

Delaware, along with Hawaii and North Carolina, use the federal estate tax exemption laws and amounts in order to determine the exemption on the state level. While North Carolina residents have tried to repeal the estate tax the government officials announced that the state would follow federal exemption guidelines and enforce an estate tax.

In May of 2011, Connecticut enacted an estate tax with an exemption at $2,000,000. The reduction was made retroactive in 2011, and remains at that amount for this year. If you live in the state of Ohio, you will not need to worry about paying an estate tax this year, as the tax was repealed on January 1st of this year. Illinois repealed their estate tax but then reinstated it on January 1st. 2011. Now, the estate tax is active but residents are given a $4,000,000 exemption for 2013.

In Tennessee, $1,250,000 of an estate is exempt from an estate tax, but surplus of this will be taxed accordingly. The government officials plan to phase out the tax by 2016 according to rumors and reports. Indiana's inheritance tax exemption for certain family members has been increased to $250,000 for deaths that occurred between January 1, 2012 and December 31 2012. The May 2013 estate tax in this state was retroactively repealed to January 2013.

The lowest estate tax exemption in the United States is in New Jersey where residents only get a $675,000 exemption. Illinoi offers a $4,000,000 exemption to residents, which is currently the highest in America. Most states with the tax only offer a $1,000,000 exemption. In summation, the states that require an estate tax are: Connecticut, Delaware, Hawaii, the District of Columbia, Illinoi, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Rhode Island, Tennessee, Vermont and Washington.

The states that require an inheritance tax are Iowa, Kansas, Maryland, Nebraska, New Jersey and Pennsylvania. This is a tax placed on the person who is inheriting any money or property and it paid out of the inheritor's finances, not the estate. No matter what state you are in, you need an attorney to assist you if you are dealing with estate planning matters or working with inheritance money. A professional can show you what to set aside for exemption and how to work with a tax or use legal loopholes to save some money. Talk to an estate planning attorney or a probate professional today using this website!