Inheritance After Tax Calculator
Example: Amount you inherit: 200000 $ · Exempt amount: 25000 $ · Inheritance tax rate (by relationship): 12
| You keep after tax | $179,000 |
| Inheritance tax owed | $21,000 |
| Effective tax rate | 10.50% |
Worked example
Say you inherit $200,000 as a sibling in a state with a $25,000 exemption and a 12% sibling rate. The taxable portion is $175,000, so the tax is $21,000 and you keep $179,000 — an effective rate of about 10.5% on the whole inheritance. Had you been the deceased's child at 4.5%, the tax would drop to about $7,875, and as a spouse it would typically be zero, showing how much relationship drives the outcome.
Frequently asked questions
Which states have an inheritance tax?
Only a handful of U.S. states impose an inheritance tax, and most exempt spouses and often children entirely. If you inherit in a state without one, the tax is zero regardless of relationship. Enter a rate of zero if no state inheritance tax applies to you.
How is inheritance tax different from estate tax?
Estate tax is levied on and paid by the estate before assets are distributed; inheritance tax is levied on and paid by each heir who receives assets. The same transfer is generally not double-taxed by both, but a large estate could face a federal estate tax and a state inheritance tax separately.
Why does my relationship to the deceased matter?
States that impose inheritance tax typically set graduated rates by class of heir: closest relatives pay the least or nothing, while unrelated beneficiaries pay the most. That is why the rate is chosen by relationship in this tool rather than a single flat number.
Are retirement accounts and life insurance taxed the same way?
It varies by asset and state. Life insurance paid to a named beneficiary is often exempt from inheritance tax, while inherited retirement accounts can carry separate income-tax consequences under federal rules. Treat this tool as an estimate for the general inheritance and confirm specific assets with a professional.