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What is the status of state and federal estate tax?

On Behalf of | Feb 16, 2022 | Estate Administration & Probate |

Death and Taxes. According to Mr. Franklin, these are two matters of which we can be certain. In Ohio, though, the two no longer necessarily go together. And, only if your estate is very large will your family have to pay funds from your estate to satisfy federal estate tax requirements.

According to the Ohio Department of Taxation, the state estate tax ceased to exist for decedents with dates of death on or after January 1, 2013, with a very few limited exceptions. As for federal estate tax, the IRS explains federal estate taxes will usually not apply to most estates, but they do exist for larger ones.

Ohio estate tax

Effective January 1, 2022, even Ohio estates with dates of death BEFORE January 1, 2013 which first discover assets after December 31, 2021, will owe no estate tax. Along with the changes, lawmakers also removed the right to request refunds of prior estate tax paid. However, estates owing estate taxes from previously discovered assets or estate tax returns already filed must still pay the full amount due.

Federal estate tax

The federal laws allow for many exemptions that can bring down the estate value so taxes are not due. Because of this, most estates will not owe federal taxes. As of 2022, the IRS only requires estates with a value of $12,060,000 after exemptions to file an estate tax return. In some instances, however, it may be wise to file a return nevertheless.

Just as with any type of tax, it is mandatory to file and pay estate taxes in accordance with the law. Not filing can lead to penalties and fees. The executor of an estate is usually the person responsible for filing estate tax returns following the decedent’s death.