At present, only six states have an Inheritance Tax in addition to an Estate Tax. They are Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Ohio (although Ohio voted in 2021 to end their Inheritance Tax and individuals who die in 2024 will be in the last year of the Ohio Inheritance Tax).
The Maryland Inheritance Tax has evolved over the years in terms of who it is applied to. Currently, direct lineal relatives of the decedent are exempt from Maryland Inheritance Tax. Thus, Inheritance Tax does not apply to the portion of an Estate distributed to parents, children, grandchildren and siblings of the decedent. Most charitable legatees are generally exempt as well. Thus, non-family members, uncles, aunts, nieces and nephews are examples of those whose inheritance will be subject to the Maryland Inheritance Tax.
The Maryland Inheritance Tax is currently 10%. While an Administration Account must show the calculation for Inheritance Tax, calculation of the Tax is complex and beyond the scope of this Guide. You may like to consult an experienced Estates & Trusts attorney for assistance.