Q&A: Estate tax versus inheritance tax

Dear Liz: In a recent column, you wrote that “only six states … have inheritance taxes.” My state of Oregon is not listed. Oregon certainly has an estate tax (one of the highest in the U.S.) and Washington also has one.

Answer: Many people confuse estate and inheritance taxes, but they’re not the same thing.

As the name implies, estate taxes are taxes levied on the dead person’s estate. The federal government, 12 states (Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington) and the District of Columbia have estate taxes.

Only the six states mentioned in the previous column — Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania — have an inheritance tax, which is levied on the person who inherits. New Jersey had an estate tax, but that was repealed in 2018, leaving Maryland as the only state with both types of tax.

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