Updated: 2020-09-14 by
Maryland residents are potentially subject to both an inheritance tax and an estate tax. Maryland's estate tax is levied on estates of more than $5 million. The estate tax falls on the estate of the person who died; the beneficiaries or heirs inherit what's left.
Maryland also levies an inheritance tax on people who inherit property in that state.
These state-specific estate and inheritance taxes are in addtion 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 $10 million, which is indexed to inflation and is currently $11,580,000, and only people who die with an estate larger than that exemption will have to pay estate tax. It is estimated that only the richest .14% of Americans will be subject to the estate tax, or only two out of every 1,000 people who die.
If someone dies in Maryland with less than the federal exemption amount (currently $11,580,000), their estate doesn't owe any federal estate tax, and if someone dies in Maryland with an estate worth less than the state exemption amount (currently $5 million) there is no Maryland estate tax, either, though there may be inheritance tax due.
The Maryland Comptroller provides state tax forms and instructions. The Maryland estate tax return is due nine months after the death unless the executor requests and receives an extension. If tax is due, it must be paid nine months after the death, whether or not an extension to file is granted, unless the state also authorizes an alternative payment schedule, where payments are temporarily deferred or paid in installments.
You may also be interested in:
Here is an overview of how this site works and what articles you'll find most useful. It can be confusing to sort out the process, the taxes, and the issues that arise after someone's death. This site will help.
Each state has its own rules about probate. Find out how they do it in Maryland.
When beneficiaries inherit assets, those assets generally receive what's called a "step up"in basis. Understand how this saves beneficiaries taxes on appreciated assets.