Tax Foundation reports 12 states and Washington D.C. levy Estate Taxes for 2026

Tax Foundation published a new report showing that 12 states and the District of Columbia still impose Estate taxes, while 5 states levy Inheritance Taxes as of 2026. According to the Tax Foundation, Hawaii and Washington share the highest Estate tax top marginal rate in the nation at 20 percent. That top rate hits taxable Estate values exceeding $10 million in Hawaii and $9 million in Washington. Meanwhile, Washington State proves more burdensome because its exemption sits lower at $3 million, compared to $5.49 million in Hawaii. Connecticut, Maine, New York, Rhode Island, and the District of Columbia currently index their exemption amounts for inflation. Connecticut stands out as the only State conforming its Estate tax exemption to the federal threshold of $15 million. On the other end, Oregon and Rhode Island maintain the least generous exemptions at $1 million and $1,838,056 respectively. Five states including Kentucky, Maryland, New Jersey, and Pennsylvania structure Inheritance Taxes so rates vary based on how close the recipient is to the decedent. Kentucky and New Jersey hold the highest top marginal Inheritance tax rates at 16 percent. Maryland remains the only State imposing both an Estate tax and an Inheritance tax, though its top Inheritance tax rate sits at a flat 10 percent for non-spouse recipients. For your business and personal planning, State tax differences can drive high-net-worth individuals across State lines and alter how you structure family assets. Review your Estate plans with an accountant before the end of the year.