(NewsNation) — In most cases, Americans will not have to pay taxes on their inheritance.

However, Pennsylvania, New Jersey, Nebraska, Maryland and Kentucky will enforce taxes on inheritance.

Previously, it was six states. However, Iowa ended the tax on inheritance on Jan. 1, 2025.

What is inheritance taxes?

It is simply the taxation on items left to an individual by someone deceased.

The rate of tax to be paid varies depending on what is left to the individual. As is the case more broadly, the more inherited, the more tax.

Who has to pay inheritance taxes?

Inheritance is only taxed if the individual who died was residing in one of the five aforementioned states.

If the heir lived in Pennsylvania but the deceased individual resided in North Carolina, there would be no tax on the inheritance.

According to Smart Asset, spouses — irrespective of the state — are exempt from paying tax on inheritances.

Children and grandchildren are also exempt unless the parents had lived in Pennsylvania or Nebraska. Other relatives are exempt aside from the five states previously mentioned.

What are estate taxes?

Often, estate and inheritance taxes are conflated to be the same when they are somewhat different entities.

Estate tax refers to taxation on an individual’s right to transfer ownership of their entire estate, property, cash or securities. They are enforced before the recipient receives the assets.

Who pays estate tax?

A federal estate tax is enforced should the value of the assets be greater than $13.99 million in the 2025 tax year or $13.61 million in 2024’s tax year, according to the IRS.

Connecticut, D.C., Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington all impose estate tax if their respective value thresholds are met.