States with no inheritance tax remain the majority across the United States in 2026, giving families significant estate planning advantages when transferring wealth after death. Current tax rules confirm that most U.S. states do not impose inheritance taxes, while only a small group continues to apply them.
Inheritance tax is different from estate tax. Estate tax is charged on the estate before distribution. Inheritance tax is paid by the person receiving assets. Understanding where inheritance tax does not apply helps families protect generational wealth.
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What Is Inheritance Tax in 2026?
Inheritance tax is a state-level tax charged on assets received from a deceased person. The tax rate usually depends on:
- Relationship to the deceased
- Value of assets received
- State rules and exemptions
Spouses are typically exempt in states that still have the tax. Close relatives often receive reduced rates or full exemptions.
Federal law does not impose inheritance tax. Only states can apply it.
States With No Inheritance Tax in 2026
As of 2026, the vast majority of U.S. states have no inheritance tax. This includes large population states and major retirement destinations.
Complete List of States With No Inheritance Tax
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Kansas
- Louisiana
- Maine
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nevada
- New Hampshire
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington (estate tax exists but no inheritance tax)
- West Virginia
- Wisconsin
- Wyoming
States That Still Have Inheritance Tax (2026 Update)
Inheritance tax remains active in:
- Kentucky
- Maryland
- Nebraska
- New Jersey
- Pennsylvania
Iowa no longer applies inheritance tax for deaths beginning in 2025.
Important Details
- Rates vary widely by relationship.
- Spouses are exempt in all inheritance-tax states.
- Children are often exempt or taxed at very low rates.
- Distant relatives and non-relatives pay the highest rates.
Difference Between No Inheritance Tax and No Death Taxes
Many people confuse inheritance tax with estate tax. They are separate.
Simple Comparison
| Tax Type | Who Pays | Where It Applies |
|---|---|---|
| Inheritance tax | Beneficiary | Few states |
| Estate tax | Estate before distribution | Some states |
| Federal estate tax | Estate | Nationwide but only large estates |
A state can have no inheritance tax but still have estate tax. Examples include:
- Washington
- Oregon
- Massachusetts
- New York
This distinction matters for high-net-worth families.
Why Most States Eliminated Inheritance Tax
Over the past two decades, many states repealed inheritance taxes. Policymakers cited several reasons:
- Competition for retirees
- Desire to attract wealthy residents
- Administrative complexity
- Public opposition to death taxes
States now rely more on property and sales taxes instead.
This shift explains why states with no inheritance tax now represent the national norm.
Impact on Estate Planning in 2026
Living in a state without inheritance tax simplifies wealth transfer.
Major Benefits
- Beneficiaries keep more assets
- Less paperwork
- Fewer surprise tax bills
- Easier multi-generational planning
However, planning still matters because:
- Estate tax may apply
- Federal estate tax thresholds can change
- State residency rules affect tax exposure
High-value estates often involve trusts regardless of state tax rules.
Best States With No Inheritance Tax for Retirees
Retirees often choose states without inheritance tax to protect family wealth.
Popular destinations include:
- Florida
- Texas
- Arizona
- Nevada
- South Carolina
Reasons retirees choose these states:
- No inheritance tax
- Often no estate tax
- Favorable income tax policies
- Lower overall tax burden
Migration trends continue to favor these states in 2026.
Common Misconceptions About Inheritance Tax
Several myths still circulate.
Myth 1: Federal inheritance tax exists
It does not. Only estate tax exists federally.
Myth 2: Children always pay inheritance tax
Most states exempt children entirely.
Myth 3: Moving late avoids inheritance tax automatically
Residency rules are complex and require planning.
Myth 4: No inheritance tax means no taxes at death
Estate tax and capital gains can still apply.
Understanding these differences prevents costly mistakes.
Recent Policy Changes Affecting States With No Inheritance Tax
The most significant recent update is Iowa’s full phase-out, completed for deaths beginning in 2025.
No new states introduced inheritance tax in 2026.
Policy discussion continues in several states, but no confirmed new laws have taken effect that expand inheritance tax.
This keeps the number of inheritance-tax states historically low.
Bottom Line
The list of states with no inheritance tax remains extensive in 2026, giving most Americans a simpler path to transferring wealth. Only a small group of states continues to apply inheritance tax, and recent policy changes — especially Iowa’s elimination — reinforce the long-term trend away from these taxes.
Families should still plan carefully because estate taxes and residency rules can affect outcomes even in states without inheritance tax.
What matters most is staying informed — tax rules shape how wealth moves across generations, and your location plays a major role. Share your thoughts or check back for future updates as policies evolve.
