Georgia has no inheritance tax. As of July 1, 2014, Georgia does not have an estate tax, either. Nevertheless, you may have to pay the estate tax levied by the federal government.

Also called a “death tax,” the estate tax is the final round of taxes someone pays before their property is distributed to their heirs. Inheritance tax, on the other hand, applies to those who receive money from someone who has passed. In some states, if you inherit money or property, you must pay taxes on that property.

Fortunately, Georgia is not one of those states.

What If I Inherit Property from Another State?

If someone dies and leaves you property outside of Georgia, you may have to pay an inheritance tax, depending on where the money comes from. If your relative dies in Pennsylvania, for example, you may have to pay the Pennsylvania inheritance tax – even if you live in Georgia (or another state with no inheritance tax).

What “Death Taxes” Do Most People Pay?

In Georgia, most people do not pay any taxes when they die or inherit money or property from someone who has passed on. Only people who die with more than $11.7 million must pay the federal estate tax, and Georgia does not have any special taxes for estates or inheritances.

Georgia residents do not even have to pay income tax on the money they inherit because it is not considered ordinary income. Heirs may have to pay tax on some inherited retirement accounts because they are subject to income tax as assets are withdrawn.

Do I Still Need to File a Tax Return?

Yes. Every American must file a final tax return, and someone will need to be responsible for your post-mortem taxes. Planning for your final tax return should be part of your estate plan.

If you’re ready to start securing your future and legacy, the attorneys at Reed Leeper, P.C. is here for you.