How inheritance tax works in United States
The U.S. does not levy a federal inheritance tax. Heirs generally do not pay a federal tax just because they received an inheritance.
Instead, the federal system uses estate tax and gift tax. In 2026, the basic exclusion amount is $15 million, and transfers above that level can face estate tax up to 40%.
The annual gift exclusion is $19,000 per donee in 2026. That does not eliminate estate planning, but it does make smaller lifetime gifts easier to manage.
Some states add estate or inheritance taxes, so the answer can change depending on where the decedent lived or where the assets are located.
Tax rates at a glance
- Federal inheritance tax
- 0%
- Federal estate tax
- Up to 40%
- Federal gift tax
- Up to 40%
- Basic exclusion
- $15,000,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FamiliesFamily officesHigh earnersExpatsEstate planners
Watch out for
- Heirs may not owe federal inheritance tax, but the estate itself can still face federal estate tax.
- The state layer matters. Some states have their own estate or inheritance taxes.
- Gift-tax planning and estate-tax planning are linked in the U.S., so lifetime gifts cannot be reviewed in isolation.
- Non-U.S. assets and non-U.S. heirs can add extra treaty and reporting issues.
Frequently asked questions
Does the U.S. have an inheritance tax?
No federal inheritance tax. The federal system uses estate and gift taxes instead.
How much can you inherit tax-free?
It depends on the size of the estate, the transfer structure and the state involved. The federal basic exclusion amount is $15 million in 2026.
Do states tax inheritances?
Some do. State estate or inheritance taxes can apply even when there is no federal inheritance tax.