What's New for 2019 for Federal and State Estate, Inheritance, and Gift Tax Law
Here's a quick summary of the new gift, estate, and inheritance changes that came along in 2019. Spoiler alert: very few people now have to pay these taxes.
1. The federal estate and gift tax exemption has been increased from $5,000,000 in 2017 to $10,000,000 in 2018, indexed to inflation. In 2019, that is $11,400,000. This higher federal exemption means that fewer people will be subject to the estate tax, since only estates with assets that exceed that exemption are required to file a federal estate tax return. (Surviving spouses of decedents with estates less than this exemption may still decide to file an estate tax return to request portability, which is the ability to use their deceased spouse's unused exemption at their own death, but they are not required to do so.) Click here to find out more about when an estate tax return does, or doesn't, need to be filed.
2. Several states have increased their state estate tax exemptions, either because they were already indexed for inflation or because they changed their state laws, either way this means that fewer residents of those states will be subject to estate tax.
- New Jersey and Delaware have eliminated the estate tax altogether.
- Connecticut, Maine and Hawaii match the federal exemption and allow the surviving spouse to make sure the deceased spouse's unused exemption, just like the feds do.
- Washington D.C. and Maryland have set their exemption levels to $5 million. Washington D.C.'s exemption is indexed to inflation, Maryland's is not.
- Rhode Island's exemption will be indexed for inflation ($1,537,656 million for 2018).
- Washington state's exemption will be indexed for inflation ($2.193 million for 2018).
- New York is increasing it's estate tax exemption to $5.25 million.
- Minnesota increased it's exemption to $2.4 million.
- Massachusetts and Oregon have an exemption of $1 million per person.