Minnesota has a State Estate Tax

 

Only a few states collect their own estate or inheritance tax. Find out if Minnesota collects either (or both) taxes on the estate after someone has died.

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Minnesota residents are subject to an estate tax for estates of more than $3 million. This tax falls on the estate of the person who died, the beneficiaries or heirs inherit what's left.

There is no inheritance tax in Minnesota, this would be the tax that falls on the heirs and beneficiaries, not on the estate of the person who died. The maximum Minnesota estate tax rate is 16%, which is significantly lower than the federal maximum rate of 40%).

This state-specific estate tax is in addition to the federal estate tax, and that tax also falls on the estate of the person who died, not on the people who inherit that property. There is an exemption of  $13,610,000, and only people who die with an estate larger than that exemption will have to pay estate tax, which means that it is estimated that only the richest .14% of Americans will be subject to the estate tax at all, or only 2 out of every 1,000 people who die.

If someone dies in Minnesota with less than the exemption amount (currently $13,610,000), their estate doesn't owe any federal estate tax, and if someone dies in Minnesota with an estate worth less than $3 million, there is no Minnesota estate tax, either. The heirs and beneficiaries inherit the property free of tax, and don't pay income tax on it, either, because inherited property is not ordinary income. The only exception to this are inherited retirement accounts, which are subject to income tax as the assets are withdrawn.

More information about Minnesota’s estate tax can be found at the Department of Revenue’s website.

 





Jurisdictional relevance: ST

There are versions of this article for each State.