Finance & Jobs

Estate and Inheritance Tax Implications for Floridians

Florida Estate Tax:

  • Florida does not impose a state estate tax. This means estates left by Florida residents are not subject to any state-level estate taxes.
  • Federal Estate Tax still applies to estates that exceed the federal exemption threshold.

Federal Estate Tax (2024):

  • For 2024, the federal estate tax exemption is $13.61 million per individual.
  • Estates valued above $13.61 million are taxed at a graduated rate starting at 18% and going up to 40% on the amount exceeding the exemption.

Example: Let’s assume a Florida resident passes away in 2024, leaving an estate worth $16 million. To calculate the federal estate tax:

  1. Estate value: $16,000,000
  2. Exemption: $13,610,000
  3. Taxable estate: $16,000,000 – $13,610,000 = $2,390,000
  4. The estate would be taxed at a 40% rate on the taxable portion.

Calculation:
$2,390,000 x 40% = $956,000 (Federal estate tax due)

Inheritance Tax:

  • Florida does not have an inheritance tax. Whether a person inheriting assets lives in or outside of Florida, the state does not impose any inheritance tax.

Inheritors Living Outside of Florida:

If the estate is located in Florida and the heir lives in a state with its own inheritance tax, they may be liable for inheritance taxes in their home state. States like Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania impose inheritance taxes, which are based on the heir’s relationship to the deceased.

For example, if an heir lives in Pennsylvania, which has a state inheritance tax, they may owe Pennsylvania inheritance tax on what they inherit from a Florida estate, even though Florida does not impose any taxes.

–Nguyễn Bách Khoa-

Key Resources for Additional Research:

  • IRS Federal Estate Tax Guidelines: IRS Website
  • Florida Department of Revenue: Information on Florida taxes: Florida Department of Revenue
  • State Inheritance Taxes: Research specific state laws on inheritance tax if the beneficiary lives outside Florida. Websites like Tax Foundation or state tax agencies provide useful guides.

By understanding these rules, inheritors can plan accordingly and avoid unnecessary complications when managing inherited wealth.