What Is an Inheritance Tax and Which States Have One?
An inheritance tax is different from an estate tax. It is paid by each heir on the value they receive, and the rate depends on their relationship to the deceased. As of 2026, only five states still impose an inheritance tax, and Iowa’s tax was fully repealed for deaths after December 31, 2024.
Estate tax vs. inheritance tax
An estate tax is levied on the entire taxable estate before distribution. An inheritance tax is levied on each heir’s share, and the rate varies by relationship. Maryland is the only state that levies both.
The five inheritance-tax states in 2026
Kentucky — Classes A, B, and C with graduated rates and exemptions.
Maryland — 10% flat rate on collateral heirs; lineal descendants and spouses exempt.
Nebraska — Locally administered; spouses exempt, lower rates for lineal heirs and siblings.
New Jersey — Classes A–D with relationship-based exemptions and graduated rates.
Pennsylvania — Flat rates by class: 0% for spouse, 4.5% lineal, 12% sibling, 15% other.
Who pays the most?
Spouses are exempt in all five states. Children and lineal descendants are exempt or low-rate in most. Siblings and non-relatives generally pay the highest rates.
Calculate it per heir
Use our Inheritance Tax Calculator to enter each heir, their relationship, and the amount they receive. The tool computes tax separately for each beneficiary.