Ohio once collected estate taxes but eliminated them years ago. The state imposed an estate tax on larger estates until 2013, when lawmakers phased out this revenue source entirely. Today, no estate tax exists in Ohio. Also, no inheritance tax.
When Did Ohio Eliminate Its Estate Tax?
Ohio began phasing out its estate tax in 2011 and completed the elimination by January 1, 2013. The state legislature passed this change as part of broader tax reform efforts during the early 2010s. This decision aligned Ohio with many other states that were reducing or eliminating death taxes to attract retirees and wealthy residents.
Before elimination, Ohio's estate tax applied to estates exceeding specific thresholds. The tax rates varied based on estate size and beneficiary relationships. Like most state estate taxes, Ohio's version generated relatively modest revenue compared to income and sales taxes. The administrative costs and complexity often outweighed the benefits for state coffers.
Ohio families face no state-level estate tax burden. This means residents can focus on federal estate tax planning only. The federal exemption currently sits at $15,000,000 per person, protecting the vast majority of American families from any estate tax liability.
Are There Other States to Consider?
While Ohio eliminated its estate tax, several states maintain their own versions. These include Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. Each state sets different exemption levels and tax rates.
How Does This Affect Estate Planning in Ohio?
The absence of state estate tax simplifies planning for Ohio residents. Families can structure their estates without worrying about state-level death taxes. However, other considerations remain important, including probate avoidance and asset protection strategies.
Ohio's probate process can take 9 months to 12 months for typical estates. Creating a living trust helps families avoid this lengthy court process entirely, regardless of tax implications. Platforms like SimplyTrust make creating a trust affordable and accessible for Ohio families looking to protect their loved ones from probate delays and costs.
(Read More: Learn about revocable trusts in Ohio versus Nevada and the cost of probate in Ohio.)
Sources
- Ohio Statutes (§ 2105.06, § 2105.32, § 2107.02, § 2105.06, § 2105.32)