Inheritance and Estate Tax by State: Where North Carolina Stands
North Carolina does not have an estate or inheritance tax in 2026, while sixteen other states and the District of Columbia tax wealth at death. Twelve states and the District collect an estate tax before heirs receive anything, and five states collect an inheritance tax from each recipient. Maryland collects both.
AT A GLANCE
Key Takeaways
This report compares North Carolina with states that tax wealth at death. We reviewed state revenue agency publications and the laws in effect as of September 2026. The report also covers recent changes that affect current tax rules.
- Thirty-four states collect no death tax, including North Carolina. It has had no inheritance tax since 1999 and no estate tax since 2013.
- Oregon has the lowest estate tax threshold at $1 million. The federal exemption is $15 million per person in 2026.
- Hawaii and Washington have the highest top estate tax rate at 20%. Washington reached that rate after its 35% top rate expired on June 30, 2026.
- Pennsylvania taxes a child’s inheritance at 4.5%, while Kentucky does not. That is the largest difference among the five states with an inheritance tax.
An estate tax applies to the estate before heirs receive anything. The tax applies to the amount above the state’s exemption. An inheritance tax applies to the assets each beneficiary receives from an estate. The beneficiary pays the tax, and the rate depends on their relationship to the deceased. Surviving spouses pay no inheritance tax in any of the five states that have one. The federal government has an estate tax but no inheritance tax. The federal exemption is $15,000,000 per person in 2026.
The 2026 Map At a Glance
Every state falls into one of four categories based on its estate and inheritance tax rules. Most states have neither tax. The table below shows where each state falls, along with the applicable thresholds and top rates.
- Maryland is the only state with both an estate tax and an inheritance tax. Its 10% inheritance rate is the lowest among the five states with an inheritance tax.
- North Carolina has no state estate or inheritance tax, but federal estate tax can still apply to larger estates.
Estate Tax Thresholds and Rates
Estate tax exemptions vary widely by state. Oregon starts taxing estates at $1,000,000, while Connecticut starts at $15,000,000. The table below shows the 2026 exemption and top rate for each state with an estate tax.
- Washington's top rate fell from 35% to 20% starting July 1, 2026. Its exemption is $3,000,000, with no further inflation adjustment under the statute.
- New York has an estate tax cliff. An estate that exceeds 105% of the exemption loses the exemption and pays tax on its full value.
What Each Heir Pays in the Five Inheritance Tax States
The tax rate depends on the heir’s relationship to the person who died. A child may pay nothing in one state but have to pay tax in another. The table below shows how inheritance tax rates can vary.
- Children pay inheritance tax in Nebraska and Pennsylvania. Nebraska taxes amounts above $100,000, while Pennsylvania applies a 4.5% rate.
- Unrelated heirs face the highest rates in most states. Maryland has the lowest rate at 10%, while Kentucky and New Jersey reach 16%.
North Carolina Compared to Nearby States
North Carolina follows the same pattern as its nearby states. None of the states in the table below has an estate or inheritance tax today.
- North Carolina went 14 years between ending its inheritance tax and ending its estate tax.
- The gap between Florida’s repeal and Tennessee’s repeal spans 11 years.
Two Decades of Repeals
State death taxes have declined since Congress phased out the federal credit that helped fund them. Nine states ended an estate or inheritance tax over the past 20 years. The table below shows when each state repealed its tax.
- No state added a new estate or inheritance tax during this period. Iowa became the latest state to repeal its inheritance tax in 2025.
- New Jersey kept its inheritance tax after retiring its estate tax in 2018.
Have questions about how your estate plan holds up across state lines?
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Sources
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Estate and Inheritance Taxes by State, Tax Foundation
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How State, Local, and Inheritance Taxes Work, Tax Policy Center
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Estate Tax, Washington State Department of Revenue
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Ferguson Signs Law to Undo WA Estate Tax, Washington State Standard
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Notice of Tax Changes, District of Columbia Office of Tax and Revenue
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Estate Tax, Rhode Island Division of Taxation
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Inheritance Tax, Pennsylvania Department of Revenue
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Inheritance Tax Rates, New Jersey Division of Taxation
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Inheritance and Estate Tax, New Jersey Division of Taxation
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Inheritance Tax, Kentucky Department of Revenue
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Inheritance Tax, Maryland Register of Wills
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Nebraska Revised Statute 77-2004, Nebraska Legislature
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Estate and Inheritance Taxes, Virginia Department of Taxation
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Estate Tax Collections, North Carolina Department of Revenue
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State Estate and Inheritance Taxes, Institute on Taxation and Economic Policy
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2026 State Estate and Inheritance Taxes, Creative Planning
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Estate Planning for High Income Earners, The Walls Law Group