# Inheritance Tax Calculator: State Inheritance Tax by Heir

> Estimate the inheritance tax an heir owes in Pennsylvania, New Jersey, Kentucky, Nebraska or Maryland, with each state's classes, exemptions, discounts and deadlines.

Source: https://www.themoneypocket.com/tools/inheritance-tax-calculator

**Inheritance tax is charged to the heir, not the estate, and only five states levy one: Pennsylvania, New Jersey, Kentucky, Nebraska and Maryland. Spouses and charities pay nothing in all five. Children pay nothing except in Pennsylvania (4.5%) and Nebraska (1% above $100,000). Cousins, friends and other distant heirs pay the most: up to 15% or 16%.** A $300,000 inheritance to a niece in 2026 costs $45,000 in Pennsylvania or New Jersey, $30,000 in Maryland, $28,600 in Nebraska and nothing in Kentucky.

What matters is where the person who died lived (and where any real estate is), your relationship to them, and how much you receive. Enter those below. For the tax the estate itself pays, use the [estate tax calculator](https://www.themoneypocket.comtools/estate-tax-calculator); to understand how the two taxes differ, read [inheritance tax vs. estate tax](https://www.themoneypocket.comarticles/inheritance-tax-vs-estate-tax).

> Interactive calculator: https://www.themoneypocket.com/tools/inheritance-tax-calculator
The calculator is for informational purposes only. Its results are estimates for one heir's share under the rules in effect for 2026 deaths, not tax advice, and the state's own assessment can differ.

## Inheritance tax rates by state and relationship

The table shows what each heir pays for a death in 2026. "Exempt" means no tax at any amount.

| Heir | Pennsylvania | New Jersey | Kentucky | Nebraska | Maryland |
|---|---|---|---|---|---|
| Spouse | 0% | Exempt (Class A) | Exempt (Class A) | Exempt | Exempt |
| Child or grandchild | 4.5% (0% for a child 21 or younger) | Exempt (Class A) | Exempt (Class A) | 1% over $100,000 | Exempt |
| Stepchild | 4.5% | Exempt (Class A) | Exempt (Class A) | 15% over $25,000 unless adopted or raised 10+ years | Exempt |
| Parent | 4.5% (0% from a child 21 or younger) | Exempt (Class A) | Exempt (Class A) | 1% over $100,000 | Exempt |
| Grandparent | 4.5% | Exempt (Class A) | Class C: 6%–16% after $500 | 1% over $100,000 | Exempt |
| Brother or sister | 12% | Class C: 11%–16% after $25,000 | Exempt (Class A) | 1% over $100,000 | Exempt |
| Son- or daughter-in-law | 4.5% | Class C: 11%–16% after $25,000 | Class B: 4%–16% after $1,000 | 1% over $100,000 | Exempt |
| Niece or nephew | 15% | Class D: 15%–16% | Exempt (Class A from 2026) | 11% over $40,000 | 10% |
| Aunt or uncle | 15% | Class D: 15%–16% | Class B: 4%–16% after $1,000 | 11% over $40,000 | 10% |
| Cousin | 15% | Class D: 15%–16% | Class C: 6%–16% after $500 | 11% over $40,000 | 10% |
| Friend or unmarried partner | 15% | Class D: 15%–16% | Class C: 6%–16% after $500 | 15% over $25,000 | 10% |
| Charity | Exempt | Exempt (Class E) | Exempt if it qualifies | Exempt if it qualifies | Exempt (501(c)(3)) |

Sources: [Pennsylvania Department of Revenue](https://www.pa.gov/en/agencies/revenue/resources/tax-types-and-information/inheritance-tax.html) and its [REV-584 FAQ](https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/inheritancetax/documents/rev-584.pdf); New Jersey Division of Taxation [rates](https://www.nj.gov/treasury/taxation/inheritance-estate/tax-rates.shtml) and [beneficiary classes](https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/transferinheritanceclasses.pdf); the Kentucky Department of Revenue [inheritance tax page](https://revenue.ky.gov/Individual/Inheritance-Estate-Tax/Pages/default.aspx) and [KRS 140.070](https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57147); Nebraska [§77-2004](https://nebraskalegislature.gov/laws/statutes.php?statute=77-2004), [§77-2005](https://nebraskalegislature.gov/laws/statutes.php?statute=77-2005) and [§77-2006](https://nebraskalegislature.gov/laws/statutes.php?statute=77-2006); the Maryland [Register of Wills](https://registers.maryland.gov/main/taxes.html) and [Tax-General §7-203](https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gtg&section=7-203&enactments=false).

Two patterns stand out. Close family pays little or nothing everywhere except Pennsylvania, which taxes children and grandchildren at 4.5% from the first dollar. And the cheapest state depends on the heir: Maryland exempts every close relative including siblings and in-laws, Kentucky now exempts nieces and nephews as well as siblings, and Nebraska taxes even distant relatives only on the amount above $40,000.

## How the calculator works

1. **It finds your class.** Each state sorts heirs by their relationship to the person who died. The tool maps the relationship you pick to that state's class: Pennsylvania's lineal, sibling and other groups; New Jersey's Classes A, C, D and E; Kentucky's Classes A, B and C; Nebraska's three statutes; Maryland's exempt list.
2. **It applies the state's exemption.** Some exemptions are deducted (Nebraska taxes only the amount over $100,000, $40,000 or $25,000; New Jersey Class C skips the first $25,000; Kentucky's tables build in $1,000 for Class B and $500 for Class C). Others are thresholds: Maryland taxes nothing if one person receives $1,000 or less but taxes the whole amount above that, and New Jersey Class D works the same way at $500.
3. **It applies the rate or brackets.** Pennsylvania and Maryland use flat rates. New Jersey and Kentucky use graduated brackets per heir. Nebraska uses one rate per class.
4. **It applies age rules and discounts.** Pennsylvania's 0% rate between a parent and a child aged 21 or younger, Nebraska's exemption for heirs under 22, and the 5% early-payment discounts in Pennsylvania (within three months) and Kentucky (within nine months).
5. **It compares states.** The results show the same heir and amount in all five states, so you can see how much the decedent's residence changes the bill.

Enter the amount you actually receive after the estate pays its debts, funeral costs and administration expenses, because those are deducted before the tax is figured. If you receive property from more than one source in the same estate (a bequest under the will plus a joint bank account, say), add them together: every state taxes each heir on the total.

## Worked examples for each state

### Pennsylvania: $300,000 to a niece

Nieces are "other heirs" in Pennsylvania. Tax: $300,000 × 15% = **$45,000**. If the estate pays within three months of the death, the [Department of Revenue](https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/inheritancetax/documents/rev-584.pdf) allows a 5% discount: $45,000 × 95% = **$42,750**, a saving of $2,250. The same $300,000 left to the decedent's 35-year-old son would cost $300,000 × 4.5% = $13,500; left to a 19-year-old son, $0.

### New Jersey: $200,000 to a sister and $1,000,000 to a friend

A sister is Class C. The first $25,000 is exempt and the next $1,075,000 is taxed at 11%: ($200,000 − $25,000) × 11% = **$19,250**.

A friend is Class D, with no exemption once the transfer reaches $500: $700,000 × 15% + $300,000 × 16% = $105,000 + $48,000 = **$153,000**, an effective rate of 15.3%.

### Kentucky: $50,000 to a son-in-law and $250,000 to a cousin

A son-in-law is Class B. In the [Department of Revenue's table](https://revenue.ky.gov/Individual/Inheritance-Estate-Tax/PublishingImages/Pages/default/Inheritance%20Tax%20Guide%2092F101%20%281-21%29.pdf), a share between $45,000 and $60,000 owes $2,660 plus 10% of the amount over $45,000: $2,660 + $5,000 × 10% = **$3,160**. Paid within nine months: $3,160 × 95% = **$3,002**.

A cousin is Class C. Working through the Class C brackets, a $250,000 share owes $28,670 on the first $200,000 plus 16% of the rest: $28,670 + $50,000 × 16% = **$36,670**, or 14.7% of the inheritance.

### Nebraska: $300,000 to a niece, $200,000 to a brother

A niece falls under §77-2005: ($300,000 − $40,000) × 11% = **$28,600**. A brother falls under §77-2004: ($200,000 − $100,000) × 1% = **$1,000**. Had the niece been 21 at the death, she would owe nothing, because Nebraska exempts any interest passing to a person under 22.

### Maryland: $300,000 to a niece, $900 to a friend

Nieces are not on Maryland's exempt list, so the 10% rate applies to the whole amount: $300,000 × 10% = **$30,000**. A friend left $900 owes nothing, because the total passing to that person is not more than $1,000. Left $1,500, the friend would owe $150: the threshold is not a deduction.

## Who pays inheritance tax, and when is it due?

The heir is legally liable, but in practice the executor withholds the tax from the heir's share and pays it with the estate's return. A will can instead tell the executor to pay all inheritance taxes out of the residue, which moves the cost to whoever inherits what is left. Deadlines and offices differ by state:

| State | Deadline | Where it is filed and paid |
|---|---|---|
| Pennsylvania | Due at death, delinquent after 9 months; 5% discount within 3 months | Return REV-1500, filed with the Register of Wills in the decedent's county of residence |
| New Jersey | Return and tax within 8 months of death; then 10% a year interest | Form IT-R, filed with the Division of Taxation in Trenton ([IT-R instructions](https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/itrins.pdf)) |
| Kentucky | Return within 18 months; 5% discount within 9 months; 10 annual installments if an heir's tax exceeds $5,000 | Kentucky Department of Revenue, Frankfort |
| Nebraska | Due 12 months after death; penalty of 5% a month, up to 25%, if no proceeding is started in time ([§77-2010](https://nebraskalegislature.gov/laws/statutes.php?statute=77-2010)) | Set by the county court, paid to the county treasurer |
| Maryland | Billed by the Register of Wills, which tells you when payment is due | Register of Wills for the county where the estate is administered |

When everything passes to exempt heirs, filing is often simpler. Kentucky lets the estate file an affidavit of exemption with the court instead of a return when all assets go to exempt beneficiaries and no federal estate tax return is required.

## Which state's inheritance tax applies?

The decedent's state of residence taxes everything except real estate located in another state, and the state where real estate sits taxes that property even when the owner lived elsewhere. Kentucky's guide states the rule directly: real estate is taxable in the state where it is located. New Jersey does not tax a nonresident's stocks, bonds or bank accounts, only real and tangible property in New Jersey, and Pennsylvania likewise taxes a nonresident only on real and tangible personal property located in Pennsylvania.

Your own address never matters. A Florida resident who inherits from an aunt in Philadelphia pays Pennsylvania's 15%; a Pennsylvania resident who inherits from an aunt in Florida pays nothing.

## Life insurance, retirement accounts and joint property

Each state treats these assets differently, and they are often the biggest items an heir receives.

- **Pennsylvania.** Life insurance proceeds are exempt under the [Tax Reform Code](https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1971/0/0002..HTM). An IRA is generally not taxed if the owner died before 59½, unless the owner was disabled; a 401(k) follows the same rule unless the owner could have taken the money without penalty (REV-584). Property owned jointly by spouses is exempt. Other joint property is taxed on the decedent's fractional share, and a joint account created within a year of death is taxed in full, less $3,000.
- **New Jersey.** Life insurance paid to a named beneficiary other than the estate is exempt, as is property held by spouses as tenants by the entirety. Payments from qualified pension or annuity plans are exempt only when paid to a surviving spouse, while death benefits from the state's teachers', public employees' and police and firemen's systems are exempt for any beneficiary. Other plans, such as TIAA-CREF, are taxable ([IT-R instructions](https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/itrins.pdf)).
- **Kentucky.** The Department of Revenue lists life insurance payable to the insured or the estate, and annuities, as taxable property. Gifts made within three years of death are presumed to be made in contemplation of death and can be taxed.
- **Maryland.** Life insurance payable to a named beneficiary other than the estate is exempt. Retirement accounts and IRAs with named beneficiaries are non-probate property that still has to be reported, and a pension payment is exempt only if it is not subject to federal estate tax (Tax-General §7-203(a)).

The calculator does not split these out, so enter only the part of your inheritance that is taxable under your state's rule.

## Inherited IRAs: inheritance tax plus income tax

An inherited traditional IRA or 401(k) can be hit twice: by the state's inheritance tax on its value at death (if your state and class tax it), and by federal and state income tax as you withdraw the money. Most non-spouse beneficiaries have to empty the account within 10 years ([IRS, Retirement topics: Beneficiary](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary)), so a large account can push several years of income into higher brackets; the [inherited IRA RMD calculator](https://www.themoneypocket.comtools/inherited-ira-rmd-calculator) shows the required withdrawals each year, and the [IRA withdrawal tax calculator](https://www.themoneypocket.comtools/ira-withdrawal-tax-calculator) estimates the income tax on each one.

## How inheritance tax interacts with federal estate tax

The two are separate. The federal estate tax is paid by the estate and applies only when the taxable estate plus lifetime taxable gifts exceeds the basic exclusion, [$15,000,000 for 2026](https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax), with a 40% rate above it. Very few estates reach that, so for most families in the five states, inheritance tax is the only death tax. When an estate does owe federal tax, state inheritance taxes paid are deducted in figuring the federal taxable estate under [IRC §2058](https://www.law.cornell.edu/uscode/text/26/2058).

Maryland is the only state with both. On top of the 10% inheritance tax on non-exempt heirs, the estate pays a 16% Maryland estate tax on the amount above $5,000,000 ([Form MET-1, 2026](https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/forms/2026/met-1.pdf)). A Maryland estate worth $6 million that leaves everything to nieces can owe both. Run the estate side with the [estate tax calculator](https://www.themoneypocket.comtools/estate-tax-calculator).

## Can gifts during life avoid inheritance tax?

Sometimes, but the states look back. Under the [Tax Reform Code](https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1971/0/0002..HTM), Pennsylvania taxes gifts made within one year of death to the extent they exceed $3,000 per recipient in a calendar year, and Kentucky can tax gifts made within three years of death. A gift made well before death generally escapes inheritance tax in these states, though the giver may need to file a federal gift tax return for gifts above the [$19,000 annual exclusion](https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax) per recipient in 2026. The [gift tax calculator](https://www.themoneypocket.comtools/gift-tax-calculator) shows whether a gift uses any lifetime exemption, and [how the gift tax works](https://www.themoneypocket.comarticles/how-the-gift-tax-works) explains the trade-off: gifted assets keep the giver's tax basis, while inherited assets get a step-up to their value at death.

## Common mistakes

- **Using the heir's state.** The rates follow the person who died. Moving away does not change the tax on an inheritance you are owed.
- **Assuming Kentucky still taxes nieces and nephews.** For deaths on or after January 1, 2026, [2026 Ky. Acts ch. 198 (HB 869)](https://apps.legislature.ky.gov/record/26rs/hb869.html) put them in Class A. For 2025 deaths they remain Class B.
- **Treating Maryland's $1,000 as a deduction.** A $1,200 inheritance to a cousin is taxed on the full $1,200 ($120).
- **Forgetting Pennsylvania taxes children.** Many people assume close family is always exempt. In Pennsylvania an adult child pays 4.5% from the first dollar, which is why the three-month discount is worth chasing.
- **Assuming Iowa still has a tax.** It was repealed for deaths on or after January 1, 2025 ([Iowa Code §450.98](https://www.legis.iowa.gov/docs/code/2026/450.98.pdf)).

For trusts, lifetime giving and the rest of the planning toolkit, see the [estate planning hub](https://www.themoneypocket.comhub/estate-planning).