Family · Inheritance tax
Does Maryland Have an Inheritance Tax?
Whether Maryland taxes what an heir inherits, who has to pay, the rates by relationship, and who is exempt. Inheritance tax is separate from any estate tax. Cited to the statute.
How the inheritance tax works in Maryland
Who pays, how the rate tracks the relationship to the person who died, and the heirs the law exempts.
| How the tax works | What it means |
|---|---|
| The heir pays 10% | Under Md. Code, Tax-General Sec. 7-204, Maryland taxes the clear value of property passing to a taxable beneficiary at a flat 10%. The tax falls on the person who receives the property, and whether it applies depends on their relationship to the person who died. |
| Close relatives are exempt | Section 7-203 exempts a spouse, children and other lineal descendants, the spouse of a child or lineal descendant, parents, grandparents, stepparents, stepchildren, and siblings. These heirs pay no Maryland inheritance tax. |
| Collateral and unrelated heirs are taxed | Nieces, nephews, cousins, more distant relatives, and unrelated people such as friends pay the 10% inheritance tax on the value of what they receive. |
| Who is exempt | What it means |
|---|---|
| Immediate and lineal family exempt | A surviving spouse, children and their descendants, parents, grandparents, stepparents, stepchildren, and siblings are exempt under Sec. 7-203 for deaths on or after July 1, 2000. |
| Small bequests and specific property | Property passing to any one person with a value below a small statutory threshold is exempt, and certain items such as qualifying life insurance proceeds are not taxed. Check Sec. 7-203 for the current list. |
| Charities and government | Transfers to qualifying charities and to government bodies are exempt from the Maryland inheritance tax. |
What you can do right now
Concrete, neutral steps if you may owe or receive an inheritance in Maryland. This is general information, not tax or legal advice.
- Check the heir’s relationship first
If every beneficiary is a spouse, child, parent, grandparent, or sibling, no inheritance tax is due. The 10% tax only reaches more distant relatives and non-relatives.
- Work through the Register of Wills
Maryland inheritance tax is collected by the Register of Wills in the county where the estate is administered. That office calculates and receives the payment.
- Consider the estate tax separately
Because Maryland also has an estate tax, a large estate may face both. Inheritance tax paid credits against estate tax due, so confirm how the two interact before paying.
- Get help for taxable heirs
If a niece, nephew, cousin, or friend inherits, the 10% applies. Confirm the taxable value and any small-bequest exemption with the Register of Wills or a probate attorney.
Inheritance tax turns on the exact relationship and the value received. The state department of revenue publishes the forms and can point you to the current rate schedule.
→ Maryland Register of Wills: Inheritance TaxThis is general information, not tax or legal advice. Rates and exemptions change and turn on the relationship, so confirm your situation against the statute or with the state revenue office.
What people in Maryland get wrong about inheritance tax
Maryland levies an inheritance tax, a 10% tax the heir pays, and it holds a distinction no other state shares: it is the only state that charges both an inheritance tax and a separate state estate tax. The inheritance tax turns on relationship. Close family are fully exempt, including a spouse, children and their descendants, parents, grandparents, stepparents, stepchildren, and siblings under Tax-General Sec. 7-203. Because that exempt list is broad, most families owe nothing. The 10% rate under Sec. 7-204 reaches the more distant heirs, such as nieces, nephews, cousins, and friends, on the clear value of what they receive. Small bequests below a low threshold and certain items are also exempt. The tax is collected by the Register of Wills in the county where the estate is handled. Keep the two Maryland death taxes straight: the inheritance tax is paid by the heir, while the estate tax is paid by the estate, and inheritance tax paid is credited against estate tax due.
Common questions
Does Maryland have an inheritance tax?
Yes. Maryland levies a 10% inheritance tax under Tax-General Sec. 7-204, paid by the heir. Close relatives are exempt, so it mainly reaches nieces, nephews, cousins, and unrelated heirs.
Who is exempt from Maryland inheritance tax?
A spouse, children and other lineal descendants, the spouse of a child, parents, grandparents, stepparents, stepchildren, and siblings are exempt under Sec. 7-203 for deaths on or after July 1, 2000.
Does Maryland have both an inheritance tax and an estate tax?
Yes. Maryland is the only state that levies both. The inheritance tax is paid by the heir at 10%, and the estate tax is paid by the estate. Inheritance tax paid is credited against estate tax due.
How much is Maryland inheritance tax?
The rate is a flat 10% of the clear value of property passing to a taxable heir. Exempt close relatives pay nothing.
Is inheritance tax the same as estate tax in Maryland?
No. The inheritance tax is paid by the heir based on relationship. The estate tax is paid by the estate. Maryland is unusual in having both.
Not legal advicePlainStatute provides plain-language summaries of public law for general information only. This is not legal advice. Statutes change; always confirm current requirements with the official source linked above before acting.