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How much tax will heirs owe on what I leave?
Estimate federal estate tax, state inheritance tax, and what an heir keeps.
Sample numbers. Change any field to use yours.
Net inheritanceSample
$47,
Pennsylvania taxes this inheritance
Pennsylvania inheritance tax applies. Tax on this inheritance: $2,250 (4.5% of the amount).
How this tax works
State inheritance tax depends on who inherits, and some states exempt close relatives
Read the estimate with care
Federal estate tax applies to the whole estate before it is split. State inheritance tax is paid by the person who receives the money. State laws vary, so confirm yours with a local tax professional.
Written by Elizabeth Stein
A child inheriting $50,000 in cash from a parent who died in Pennsylvania, from an estate well under the federal exemption, owes no federal or state estate tax. Pennsylvania's inheritance tax rate for a child is 4.5%, with no exemption, so the tax on that $50,000 is $2,250, leaving $47,750 net. Cash does not carry a step-up in basis, since there is no cost basis to step up on money itself.
Finance Quest is educational. It is not financial advice, and no calculator here knows your full situation.
It is common to hear that an estate is under the federal exemption and assume that means no tax anywhere. Federal estate tax and state estate tax are about the size of the whole estate; state inheritance tax is about your relationship to the deceased, and it can apply even when the estate is nowhere near the federal exemption. A child inheriting cash in Pennsylvania or Nebraska owes state inheritance tax regardless of how small the rest of the estate is.
Generally no. The federal government taxes the estate before distribution, not the inheritance itself, and only above a high exemption most estates never reach. As an individual beneficiary, you typically owe no federal income tax on the inheritance itself either, though income the inherited asset later generates is taxable as usual.
As of 2026, a handful of states, including Pennsylvania, Nebraska, Kentucky, New Jersey and Maryland, charge a state inheritance tax on at least some beneficiaries. Iowa repealed its inheritance tax for deaths on or after January 1, 2025, so it no longer applies. Rates and exemptions vary by relationship to the deceased, with spouses usually exempt everywhere it exists.
It resets the cost basis of an inherited asset to its value on the date of death, instead of what the deceased originally paid. If you inherit stock bought decades ago for very little and sell it soon after, you generally only owe capital gains tax on the growth since the date of death, not since the original purchase.
Yes. Inherited traditional retirement accounts do not get a step-up in basis, and withdrawals are generally taxed as ordinary income to the beneficiary, following required distribution rules that depend on your relationship to the original owner. This is a meaningfully different tax treatment than inheriting stock or real estate.