Tools for Heirs and Beneficiaries in Maryland

Maryland levies an estate tax above $5,000,000 (top rate 16%) and an inheritance tax on beneficiaries; the federal estate tax applies above $15,000,000.

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6 tools for Maryland

Who Inherits Without a Will?

Without a will in Maryland, descendants divide what passes to them per stirpes, and an heir must survive the decedent by 720 hours to inherit.

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How Much Are Estate & Inheritance Taxes?

Maryland levies an estate tax above $5,000,000 (top rate 16%) and an inheritance tax on beneficiaries; the federal estate tax applies above $15,000,000.

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What Taxes Apply to My Inheritance?

In Maryland, an inheritance is subject to a state inheritance tax at a rate set by the beneficiary's relationship; probate assets arrive when the estate closes, 6 months to 9 months for a simple estate.

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How Does Step-Up in Basis Work?

Inherited assets in Maryland take a basis reset to fair market value on the date of death, and the gain on a later sale faces ordinary income tax at the state's regular rates, plus a 2% surtax on the whole gain once federal AGI exceeds $350,000.

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When Do I Have to Withdraw an Inherited IRA?

See which federal withdrawal rules apply to an inherited IRA, Roth IRA, or employer plan, the deadline year, and the missed-withdrawal tax.

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Do I Have to File Tax Returns for Someone Who Died?

Maryland requires a final state income tax return for the decedent alongside the federal Form 1040; a federal estate tax return (Form 706) is required only for estates above $15,000,000.

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Yes, two. Maryland imposes an estate tax on the estate above $5,000,000 before anything is distributed, and an inheritance tax on what each beneficiary receives, at a rate set by the relationship to the decedent. Both can reach the same estate.

The Maryland estate tax exemption is $5,000,000; an estate below it owes no state estate tax. The exemption is a fixed amount set by statute. A taxable estate faces graduated rates up to 16%.

No. The IRS does not treat inherited money, real estate or personal items as income, so a beneficiary in Maryland does not report them on a federal return when received. Two exceptions: an inherited retirement account (a 401(k) or a traditional IRA) is taxed as ordinary income as it is withdrawn, and earnings after the date of death are taxable. Inherited property takes a stepped-up basis, its value on the date of death, for any later capital gain.

When someone dies, the cost basis of the property they leave is reset to its fair market value on the date of death under IRC § 1014. A later sale is taxed on the gain above that stepped-up basis, not above what the original owner paid, so the appreciation of the owner's lifetime is never taxed. The rule is federal and applies in Maryland as in every state.

Maryland intestacy law decides. Maryland follows separate property rules: the surviving spouse's share depends on whether children survive and whose children they are. The estate passes to the closest surviving relatives, in most cases the spouse and children first, then in order: Parents; Issue of your parents; Grandparents; Stepchildren; Maryland Department of Health or the county board of education.

Tools for Heirs and Beneficiaries in Maryland

Estate taxes are paid by the estate before anything is distributed; inheritance taxes are paid by the person who receives the property. In 2026 the federal estate tax reaches only estates above $15 million per person, and there is no federal inheritance tax. 12 states plus the District of Columbia levy their own estate tax at lower thresholds, and 5 states levy an inheritance tax whose rate depends on the beneficiary's relationship to the person who died.

Beneficiaries in Maryland pay the inheritance tax themselves, at a rate set by their relationship to the person who died; inherited assets take a basis reset to fair market value on the date of death, and the gain on a later sale faces ordinary income tax at the state's regular rates, plus a 2% surtax on the whole gain once federal AGI exceeds $350,000. Probate assets arrive when the estate closes: a simple estate closes in 6 months to 9 months.

SimplyTrust Editorial·Updated September 15, 2026

Legal Sources

Data sourced from Maryland statutes and official state code. How we research.