Indiana gives its inheritance tax an early end, leaving four states in Midwest with inheritance or estate taxes
|Monday, May 13, 2013 at 01:06 PM
Indiana lawmakers have decided to hasten the demise of the state’s inheritance tax.
A year after passing legislation to phase out the tax over the next decade, the state General Assembly agreed at the end of its 2013 session to a full, immediate repeal. The tax, imposed on the beneficiaries of an estate, brought in about $150 million a year, theEvansville Courier & Press reports.
According to The Tax Foundation, Iowa and Nebraska are now the only two Midwestern states with an inheritance tax. Iowa’s applies to the inheritors of an estate with a net value of more than $25,000; surviving spouses, parents and grandparents, and children and grandchildren are exempt from the tax. In Nebraska, the tax is levied at the county level. The first $40,000 of the inheritance is exempt for close relatives, who then must pay 1 percent of the market value. The exemption is lower and rates are higher for more-distant relatives and others.
Two other Midwestern states, Illinois and Minnesota, impose estate taxes, which is levied on the estate of a deceased individual. The first $4 million of the estate is exempt under Illinois law, and the first $1 million is not taxed in Minnesota. Ohio’s estate tax ended this year.