Louisiana does not impose an inheritance tax (or estate tax) on beneficiaries who receive assets from a deceased person’s estate. This means when you inherit property, money, or other assets in Louisiana, you won’t owe state taxes simply because you received an inheritance.
Understanding the distinction helps clarify Louisiana’s approach to taxing inherited wealth. An estate tax gets levied on the total value of a deceased person’s estate before distribution to beneficiaries. An inheritance tax, on the other hand, gets imposed on individual beneficiaries based on what they receive.
Louisiana follows the majority of states by not taxing inheritances at the state level. Only six states currently impose inheritance taxes: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
How Does No Inheritance Tax Louisiana Benefit Families?
The state’s lack of inheritance tax creates several advantages for families dealing with the loss of a loved one. Beneficiaries receive their full inheritance without additional state tax obligations. This policy particularly helps middle-class families who inherit family homes, savings accounts, or small business interests.
For example, if you inherit your grandmother’s home valued at $150,000 in Louisiana, you receive the full property value without paying inheritance taxes to the state. In contrast, if the same inheritance occurred in Pennsylvania, you might owe inheritance taxes depending on your relationship to the deceased and the property’s value.
What About Federal Estate Taxes?
While the state doesn’t impose inheritance taxes, federal estate tax rules still apply to very large estates. The federal estate tax exemption for 2025 stands at $13.99 million per person. Estates exceeding this threshold face federal estate taxes, but this affects fewer than 1% of all estates nationwide.
Are There Other Tax Considerations for Louisiana Inheritances?
Even without inheritance taxes, beneficiaries should understand other tax implications. Inherited assets typically receive a “stepped-up basis” for federal income tax purposes, meaning the asset’s tax basis adjusts to its fair market value at the time of death.
If you inherit investment accounts or rental property, you might face future income taxes on earnings or capital gains when you sell. However, these taxes differ from inheritance taxes since they apply to future income rather than the act of receiving the inheritance.
Louisiana’s decision to forgo inheritance taxes reflects a broader trend among states to eliminate these levies, recognizing that families already face emotional and financial challenges during difficult times. This approach allows Louisiana families to focus on grieving and managing practical matters without additional tax burdens on inherited assets.
(Learn More: Read about revocable trusts in Louisiana versus Nevada and the cost of probate in Louisiana.)