Maryland estate or inheritance tax questions come up often, and the honest answer is a little surprising. Maryland has both. It is the only state in the country that still charges an estate tax and an inheritance tax at the same time. That may sound scary.
However, most Maryland families will never owe either one. The estate tax only applies to very large estates. The inheritance tax mostly skips close family members. If you are planning ahead, or settling a loved one’s estate right now, this guide walks you through the rules in plain English, with the exact figures you need.
The Two Taxes, Explained Simply
An estate tax is charged on the whole estate before anything is handed out. An “estate” is simply everything a person owned when they died. The executor pays this tax out of the estate itself. An executor (Maryland calls this person a “personal representative”) is the person in charge of wrapping up the estate.
An inheritance tax works differently. It is based on who receives the property. Typically, it depends on how closely the person was related to the one who died. In Maryland, close family usually pays nothing. More distant relatives and friends may pay a tax on what they receive.
As a result, one estate could owe the estate tax, the inheritance tax, both, or neither. In most cases, it owes neither. Maryland does give a credit, though. Inheritance tax paid can generally be subtracted from any Maryland estate tax owed, so the same dollars are not fully taxed twice.
Maryland Estate or Inheritance Tax: The Exact Rules and Figures
Here are the key numbers for deaths in 2026. The Maryland estate tax exemption is $5 million per person. This amount is set by state law and is not adjusted for inflation. Estates below $5 million owe no Maryland estate tax. For estates above it, the top rate is 16%, under Maryland Tax-General Article, Title 7, Subtitle 3.
Maryland also allows “portability.” That means a surviving spouse may be able to use the unused part of the first spouse’s exemption. For example, a married couple who plans and files correctly may shelter up to $10 million together. The executor usually must file a timely Maryland estate tax return to claim this.
The Maryland inheritance tax rate is a flat 10% on property passing to non-exempt people (Tax-General § 7-204). There is no dollar threshold like the estate tax has. However, many close relatives are fully exempt under Tax-General § 7-203.
| Item | Maryland Rule (2026) |
|---|---|
| Estate tax exemption | $5,000,000 per person (not inflation-adjusted) |
| Top estate tax rate | 16% |
| Spousal portability | Yes, with a timely return (up to $10 million for a couple) |
| Inheritance tax rate | 10% flat for non-exempt beneficiaries |
| Exempt from inheritance tax | Spouse, children, grandchildren and other descendants, parents, grandparents, stepparents, stepchildren, siblings, qualifying domestic partners, and qualifying charities |
| Usually taxed at 10% | Nieces, nephews, aunts, uncles, cousins, friends, and unrelated people |
| Filing and payment deadline | Generally 9 months after the date of death |
| Federal estate tax exemption (2026) | $15,000,000 per person, top rate 40% |
Keep the federal rule in mind, too. The federal exemption is $15 million per person in 2026. As a result, an estate can owe Maryland estate tax even when it owes nothing to the IRS. For example, a $7 million estate is well under the federal limit. Still, it is $2 million over Maryland’s limit.
What to Do Next, Step by Step
First, take a calm look at the size of the estate. Add up the home, bank accounts, retirement accounts, life insurance, and investments. If the total is well under $5 million, the Maryland estate tax is very unlikely to apply. That alone answers half of the Maryland estate or inheritance tax question for most families.
Second, look at who is receiving each item. If everything goes to a spouse, children, grandchildren, parents, or siblings, no inheritance tax is typically due. However, if a niece, nephew, cousin, or friend inherits something, the 10% tax may apply to their share. For example, a $50,000 gift to a nephew could mean about $5,000 in inheritance tax.
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Third, contact the Register of Wills in the county where the person lived. This office handles probate and collects Maryland inheritance tax. Probate is the court-supervised process of settling an estate. The Register’s staff can explain local forms and payment steps. For larger estates, the Comptroller of Maryland handles the estate tax return. In many cases, it helps to check with a licensed Maryland attorney or tax professional before filing.
Finally, if you are planning ahead, know that your choices matter. Who you name in your will, and how accounts are titled, can affect Maryland estate or inheritance tax results. A short conversation with a professional can help you understand your options.
Frequently Asked Questions
Do children have to pay Maryland inheritance tax?
No, in most cases they do not. Children, grandchildren, and other direct descendants are exempt under Tax-General § 7-203. As a result, a parent leaving everything to their kids typically triggers no Maryland inheritance tax.
Does a Maryland estate or inheritance tax apply to a small estate?
The estate tax does not apply to estates under $5 million. However, the inheritance tax has no minimum threshold. For example, a small gift to a friend or cousin may still be taxed at 10%.
Is Maryland changing its estate or inheritance tax rules?
Lawmakers have discussed changes in recent years. For example, a 2025 proposal to lower the exemption to $2 million was not passed. As of October 2026, the $5 million exemption and 10% inheritance tax generally remain in place, so check with the Comptroller or a licensed attorney for the latest Maryland estate or inheritance tax rules.
Make Sure Your Plan Actually Works
A will or trust only does its job if the rest of your plan lines up. Two quick checks before you finish:
- Get your state’s exact rules — witnesses, notary, probate cost, and tax thresholds vary by state.
- Beneficiary forms beat your will — make sure your life-insurance beneficiaries are current, because named beneficiaries pass outside your will.
Sources & How to Verify
This guide is built from official sources. Always confirm the exact figure for your state:
- IRS — Estate & Gift Tax: irs.gov
- USA.gov — What to do when someone dies: usa.gov/death
- Uniform Law Commission (probate): uniformlaws.org
- Cornell Legal Information Institute: law.cornell.edu
- Your state’s probate court self-help portal and revenue department for the current statute and dollar figures.
Verified October 2026. Estate figures change — if you spot anything outdated, please contact us.
Related Guides
- Wills by State
- Trusts & Living Trusts by State
- Estate & Inheritance Tax by State
- Plain-English Estate Glossary
Disclaimer. This page is for general information only and is not legal or tax advice. Wills, probate, and estate-tax rules vary by state, county, and situation, and change over time. We are not a law firm, tax advisor, or financial planner, and we assume no liability for accuracy or completeness. For your specific situation — especially an active probate or a tax deadline — verify with your state’s court, statute, revenue department, or a licensed attorney in your state.