Published Wednesday, January 18, 2017 at: 7:00 AM EST
The IRS has increased the federal estate tax exemption, which is indexed annually for inflation, to $5.49 million for 2017, up from $5.45 million in 2016. That lets couples now shield as much as $10.98 million from federal estate tax.
Depending on where you live, you still might have to worry about estate and inheritance taxes on the state level. But there's more good news: Nine states have enacted changes in these taxes to reduce the tax bite for some families in 2017.
In New Jersey, which long has had only a $675,000 exemption from state estate tax, the amount will increase to $2 million in 2017 before the tax goes away in 2018. But a state inheritance tax for heirs who aren't direct descendants still applies. In Maryland, meanwhile, the state exemption rises to $3 million; in Minnesota, to $1.7 million; and in New York, to $5.25 million (effective April 1, 2017). Rhode Island and Washington are indexing their exemptions for inflation. Finally, Delaware, Hawaii, and Maine will match the federal exemption amount.
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