Maryland Estate Tax

Maryland Estate & Inheritance Tax — Best Proven Guide (2026)

By Oleg Kachko · Updated June 15, 2026

✓ Verified June 2026

This guide explains Maryland estate tax and inheritance tax in plain English — whether Maryland taxes your estate, who pays, the exact exemptions, and how the federal estate tax fits in for 2026. All figures verified as of June 2026.

Maryland Estate & Inheritance Tax at a Glance

Here is exactly how Maryland estate tax and inheritance tax work:

Does Maryland have an estate tax? YES
State estate-tax exemption $5,000,000
State estate-tax top rate 16
Does Maryland have an inheritance tax? YES
Inheritance tax — who pays Beneficiaries who are NOT close family members pay a flat 10 percent inheritance tax on the full value received. Close family members (see exemptions below) pay nothing. The tax is paid by the beneficiary to the Register of Wills, not by the estate. There is a 1000 de minimis threshold below which no tax is collected. Maryland is the only state that imposes both an estate tax and a separate inheritance tax.
Federal estate-tax exemption (2026) 15000000 per individual (30000000 for a married couple using portability). The One Big Beautiful Bill Act permanently set the exemption at 15000000 starting January 1 2026, eliminating the TCJA sunset that would have dropped it to roughly 7000000. The exemption is indexed for inflation starting in 2027.

Who is exempt from Maryland inheritance tax: The following beneficiaries are fully exempt from Maryland inheritance tax: surviving spouse, child, stepchild, grandchild or other lineal descendant, parent, grandparent or other lineal ancestor, sibling, stepparent, and the spouse of a child or other lineal descendant. Everyone else — including nieces, nephews, cousins, aunts, uncles, friends, and unmarried partners — pays the 10 percent tax.

Spousal portability (federal): Yes. The federal estate tax exemption allows spousal portability — any unused portion of a deceased spouse’s exemption may be transferred to the surviving spouse by filing IRS Form 706. Maryland also permits a portability election on the Maryland estate tax return, so a married couple may shelter up to 10000000 from Maryland estate tax with proper planning.

Gift tax: Maryland does not impose a state-level gift tax. Only the federal gift tax applies to Maryland residents. The federal annual gift tax exclusion for 2026 is 19000 per recipient.

Estate Tax vs Inheritance Tax: The Difference

People use these two terms as if they mean the same thing, but they are different taxes that work in opposite ways. An estate tax is charged to the estate itself before anything is handed out — the estate pays it, then the heirs receive what is left.

An inheritance tax is charged to the people who receive the money — each heir may owe tax on their share, and the rate often depends on how closely related they were to the person who died.

This matters for Maryland families because the two taxes are set by different rules. The federal government only has an estate tax, never an inheritance tax. A state can have an estate tax, an inheritance tax, both, or — as in most states — neither. When you know which one (if any) applies in Maryland, you know exactly who would be responsible for paying.

How the Federal Estate Tax Works

No matter which state you live in, the federal estate tax sets a very high exemption, which is the amount an estate can be worth before any federal tax is owed. Estates below that exemption owe no federal estate tax at all, and the overwhelming majority of estates fall well below it.

For 2026, the federal exemption is $15 million per person — a level the One Big Beautiful Bill Act made permanent in 2025 and indexes for inflation — so the figure in the table above is current and is not scheduled to drop.

Married couples get an extra advantage. Anything left to a surviving spouse passes free of federal estate tax under the unlimited marital deduction, and a surviving spouse can often carry over the unused portion of their late spouse’s exemption — a feature called portability. In practice this means a married couple can shield roughly double the individual exemption before federal estate tax ever enters the picture.

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Who Actually Owes Estate Tax in Maryland

Most Maryland families will owe no estate tax because the 5000000 state exemption and 15000000 federal exemption cover the vast majority of estates. Families with estates above 5000000 should consult a licensed estate planning attorney, especially married couples who may benefit from portability elections. The inheritance tax may affect anyone who leaves assets to non-exempt beneficiaries such as nieces, nephews, unmarried partners, or friends, regardless of estate size.

Other Maryland estate/inheritance tax rules: Maryland is the only U.S. state that imposes both an estate tax and an inheritance tax simultaneously. The estate tax is paid by the estate to the Comptroller of Maryland; the inheritance tax is paid by individual beneficiaries to the Register of Wills in the county where the decedent resided.

The Maryland estate tax return must be filed within 9 months of the date of death. The inheritance tax credit: the amount of inheritance tax paid may reduce the estate tax liability dollar-for-dollar, so assets are not fully double-taxed by both levies.

A bill (SB 211) was introduced in the 2026 Maryland General Assembly session to repeal the estate tax, but as of June 2026 the estate tax remains in effect.

What This Means for Your Maryland Family

The bottom line for Maryland: most families still owe little or nothing, but because Maryland has a state-level death tax, it is worth checking the exemption and rate in the table above against the size of the estate. If the estate is close to or above the Maryland threshold, a licensed tax professional in Maryland can help you plan ahead and reduce what is owed.

Either way, planning ahead helps. Keeping beneficiary designations current, holding property in the right way, and — for larger estates — talking to a tax professional can keep more of what you have built in your family’s hands. None of this requires owing estate tax; it is simply good estate planning.

It also helps to know what an estate tax does not touch. Life insurance paid to a named beneficiary, retirement accounts with named beneficiaries, and assets held in certain trusts generally pass outside the taxable estate, which is one reason these tools are so common in planning.

Day-to-day inheritances that most Maryland families receive — a home, a bank account, a car, personal belongings — are almost never large enough to trigger any estate tax at all. If you are unsure where your family stands, the safest step is a short conversation with a licensed Maryland estate or tax professional who can look at the actual numbers.

Understanding Maryland Estate and Inheritance Tax

Worrying about Maryland estate tax is common, but most families owe nothing. Whether Maryland estate tax applies depends on the size of the estate and whether Maryland levies an estate tax, an inheritance tax, or neither. The table above shows the exact exemptions and rates, plus the current federal exemption, so you can see where you actually stand on Maryland estate tax.

If your estate is large enough that Maryland estate tax could apply, a licensed tax professional in your state can help you plan.

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Official Maryland Sources & Resources

This Maryland estate-tax guide was last verified against official sources in June 2026. Tax laws and exemptions change yearly — verify with your state revenue department or a licensed tax professional.

More Maryland Wills & Probate Guides

Disclaimer: This guide is informational only and is not legal or tax advice. Estate, probate, and tax laws change and vary by state and county. Verify current rules and dollar figures with your state’s court, statute, or a licensed attorney or tax professional before acting. For urgent matters like an active probate or a tax deadline, consult a licensed professional in your state right away.

Estate planning? Make sure your life insurance is in order — see Life Insure Guide. Worried about Medicaid estate recovery? See Medicare Cover Guide. Divorced recently? Update your will and beneficiaries — see Divorce Help Guide.