Estate and Inheritance Tax Information

The inheritance tax is imposed on the clear value of property that passes from a decedent to some beneficiaries. The tax is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. The tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. For more information, visit the Office of the Register of Wills.

The Maryland estate tax is a state tax imposed on the transfer of property in a decedent's estate. Payment of the Maryland estate tax is due nine (9) months after the decedent's date of death.

A Maryland estate tax return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds the Maryland estate tax exemption amount for the year of the decedent's death, and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

The gross estate includes all property, real or personal, tangible or intangible, wherever situated, in which the decedent had an interest. It includes such items as annuities, joint assets with right of survivorship, transfers made without adequate consideration, the includible portion of tenancies by the entirety, certain life insurance proceeds, and general power of appointment property, to name a few. The value of the property must be based upon an appraisal from a Certified Appraiser. For more information on the gross estate, visit the IRS website regarding the Federal Estate Tax and review 2031 of the Internal Revenue Code.

The probate estate is property of the decedent owned individually or as tenants in common. Non-probate property is property that passes by the terms of the instrument under which it is held or by operation of law. The total gross estate for estate tax purposes includes probate and non-probate property.

The Maryland estate tax is based on the maximum credit for state death taxes allowable under 2011 of the Internal Revenue Code. The credit used to determine the Maryland estate tax cannot exceed 16% of the amount by which the decedent's taxable estate exceeds the Maryland estate tax exemption amount for the year of the decedent's death.

You may file for a refund of Maryland estate taxes by filing an amended estate tax return, using Form MET-1.

The refund claim will be considered if:

  • an erroneous amount of tax has been paid or collected, OR
  • the Maryland estate tax is decreased as the result of action taken by IRS or the estate, or an inheritance tax payment was made after a Maryland estate tax payment.

The refund claim must include an explanation and documentation to evidence the decrease directed by IRS. You are allowed to file a claim for a Maryland estate tax refund up to three years after the date of the event that caused the refund to become due.

If an additional inheritance tax payment is due to the Register of Wills, and the payment would result in a refund of previously paid Maryland estate tax, the personal representative of the estate may request the Comptroller of Maryland to pay the anticipated estate tax refund directly to the Register of Wills so the refund can be applied against the inheritance tax liability. To take this action, complete refund application Form MET-2 ADJ.

If an inheritance tax refund would result in an increase in the Maryland estate tax imposed on an estate, the claimant may request the Register of Wills to pay the inheritance tax refund directly to the Comptroller of Maryland.

Tax rates for decedents who died before July 1, 1999:

  • 1% tax on the clear value of property passing to a child or other lineal descendant, spouse, parent or grandparent.
  • 10% on property passing to siblings or other individuals.

Tax rates for decedents who died on or after July 1, 1999:

  • 0.9% tax on the clear value of property passing to a child or other lineal descendant, spouse, parent or grandparent.
  • 8% on property passing to siblings.
  • 10% on property passing to other individuals.

Tax rates for decedents who died on or after July 1, 2000:

  • Property passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse, parent, grandparent, stepchild or stepparent, siblings or a corporation having only certain of these persons as stockholders is exempt from taxation.
  • 10% on property passing to other individuals.

Effective for decedents who die on or after July 1, 2009, a primary residence that is owned by domestic partners held in joint tenancy at the time of one partner's death is exempt from the Maryland inheritance tax.

For more information about the inheritance tax, contact the Office of the Register of Wills in the appropriate county.

During the 2012 Legislative Session the Maryland General Assembly enacted the Family Farm Preservation Act of 2012, which adds a new subsection to Title 7 of the Tax-General Article allowing for the exclusion of up to $5,000,000 of the value of qualified agricultural property from the value of the gross estate for decedents dying after December 31, 2011. The new provision also provides that the Maryland estate tax may not exceed 5% of the value of specified agricultural property exceeding $5,000,000. Maryland qualified agricultural exclusion forms may be obtained by calling the Estate Tax Unit at (410) 260-7850.

Legislation enacted during the 2014 legislative session gradually conforms the Maryland estate tax exemption amount to the value of the unified credit under the federal estate tax, thereby increasing the amount that can be excluded for Maryland estate tax purposes. The increase in the amount that can be excluded for Maryland estate tax purposes is phased over five years and is equal to (1) $1.5 million for a decedent dying in calendar year 2015; (2) $2.0 million for a decedent dying in calendar year 2016; (3) $3.0 million for a decedent dying in calendar year 2017; (4) $4.0 million for a decedent dying in calendar year 2018; and (5) $5.0 million for a decedent dying on or after January 1, 2019. Check the Internal Revenue Service website for information on the federal estate tax exemption.

Most recently, the Maryland General Assembly enacted legislation during the 2015 legislative session that changed the option allowing Maryland estate tax returns to be filed with the Register of Wills or with the Comptroller. Beginning July 1, 2015, all Maryland estate tax returns must be filed directly with the Comptroller. Requests for certification of the amount of inheritance paid on behalf of a decedent will be made by the Comptroller only; such certification requests should no longer be made by the personal representative of the decedent's estate or any other person required to file a Maryland estate tax return with regard to property passing from the decedent.

2010 Tax Legislation

2009 Tax Legislation

Inheritance Tax Legislation

2010 Tax Legislation

Administrative Releases: Personal, Estate and Corporate Income Tax

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Release # Title Revision/Effective Date
1 Military Personnel and Civilian Spouses - Both Residents and Nonresidents of Maryland Revised: 9/2011
2 Interstate Commerce Tax Act. Domestic and Foreign Corporations. Nexus Requirements. Apportionment of Corporate Net Income Revised: 9/2009
3  Nonresident Credits, Reciprocal Income Tax Agreements, Nonresident County Income Tax, and Nonresident with Maryland Resident Spouse Revised: 9/2011
4 Extension of Time for Filing Maryland Income Tax Returns and Estate Tax Returns Revised: 9/2011
5 Mutual Fund Distributions of Tax-Exempt Interest and Capital Gains from State and Local Obligations Revised: 9/2009
6 Taxation of Pass-Through Entities Revised: 7/2021
7 Some Aspects of the Subtraction Modification for Volunteer Travel Expenses Under Section 10-208 of the Tax-General Article. See Form 502V Revised: 9/2009
8 Treatment of Partner's Share of Income, Gain or Loss, from a Partnership When the Individual Partner Establishes or Abandons Maryland Residence Revised: 9/2008
9 Portion of Subpart F Income which may be subtracted from Corporation Taxable Income Effective: 9/2009
10 Maryland Taxation of Income from "Ginnie Maes" Effective: 9/2009
11 Income from Regulated Investment Companies which Invest in U.S. Government Obligations and Income from Repurchase Agreement Transactions Revised: 9/2009
12 Apportionment of Partnership Share of Income by Corporate Partners Revised: 9/2008
13 Tax Status of Interest Received from Federal, State and Local Obligations Revised: 8/2012
14 Interest Rates for Refunds and Delinquent Taxes Revised: 11/2019
15 Information Reporting on Sales of Real Estate Located in Maryland and Owned by Nonresidents Revised: 09/2007
16 Fiduciaries, Including Estates and Trusts Revised: 9/2011
17 Rescinded Rescinded: 12/31/2001
18 Net Operating Losses and Associated Maryland Addition and Subtraction Modifications Revised: 07/2013
19 Rescinded Rescinded: 08/31/2005
20 Income Tax Refunds and Credits: Limitations Revised: 9/2009
21 Income Tax Treatment of Employee Contributions under the Maryland Pension Pickup Program Revised: 9/2010
22 Apportionment of Income - Airlines Revised: 6/2022
23 Military Retirement Income Revised: 9/2009
24 Nonresident Professional Athletes and Entertainers Revised: 9/2008
25 Income Tax Treatment of Limited Liability Companies Revised: 9/2012
26 Procedures for Computer-Printed Substitute Forms Revised: 09/2022
27 Work, Not Welfare, Tax Incentive Act of 1995 with 1996, 1998, 2000, 2003, 2006, 2007 and 2008 Amendments (Employment Opportunity Credit) Revised: 9/2012
28 Rescinded Rescinded: 08/31/2005
29 Subtraction Modification for Volunteer Fire, Rescue or Emergency Medical Services Personnel Revised: 6/2011
30 Maryland Estate Tax Revised: 05/2013
31 Subtraction Modification for Police Auxiliary or Reserve Volunteers Revised: 9/2009
32 Maryland College Savings Plans Tax Benefits Revised: 01/2010
33 Tax Credits for Hiring Individuals with Disabilities Revised: 8/2012
34 Credit against Withholding Taxes for Tax-exempt Organizations Revised: 9/2010
35 Subtraction Modification for United States Coast Guard Auxiliary Members Revised: 9/2009
36 Tax Credit for Cost of Providing Commuter Benefits to Employees and the Commuter Benefits Act of 2000 and 2002 Revised: 9/2009
37 Domicile and Residency Effective: 9/2009
38 Decoupling from Federal Income Tax Laws Revised: 6/2022
39 Long-Term Employment of Qualified Ex-Felons Tax Credit Revised: 8/2012
40 Claim of Right Effective: 9/30/2006
41 Withholding on Designated Distributions from Retirement Plans Revised: 8/2012
42 502CR Part A - Claiming Credit for State and Local Taxes Paid to Other States Revised: 3/2019
43 Corporate Apportionment of Income Revised: 10/2022.

The Maryland estate tax is a transfer tax imposed on the transfer of assets from an estate. It is based on the maximum credit for state death taxes allowable under §2011 of the Internal Revenue Code. The credit used to determine the Maryland estate tax cannot exceed 16% of the amount by which the decedent's taxable estate exceeds the Maryland estate tax exemption amount for the decedent's year of death. Please note, for decedents dying after December 31, 2001, the maximum allowable credit for state death taxes will not be reduced, for purposes of the Maryland estate tax, by any act of Congress enacted on or after January 1, 2001.

If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due. See also Calculation Method.

The duly appointed personal representative of the decedent's estate must file the return. If there is more than one personal representative, the return must be made jointly by all. If there is no personal representative appointed, every person in actual or constructive possession of any property of the decedent is required to make and file a return. See FAQ #3, “What are the requirements for filing a Maryland estate tax return?” to determine if you are required to file.

The filing requirement varies depending on the year of the decedent's death.

Generally, a return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouses, equals or exceeds the Maryland estate tax exemption amount for the year of the decedent's death, and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

Year of death Gross estate
2019 and after $5,000,000
2018 $4,000,000
2017 $3,000,000
2016 $2,000,000
2015 $1,500,000
2002-2014 $1,000,000
2000-2001 $675,000
1999 $650,000
Prior to 1999 Contact us

For more information, see Filing the Estate Tax Return

Once you have determined a Maryland estate tax return is required to be filed for the estate, complete the federal estate tax return, IRS Form 706, for the date of the decedent's death. You will be required to complete the federal return even though you may not be required to file the return with IRS.

Using the information from the federal return, complete the Maryland estate tax Form MET-1, using the form appropriate for the date of the decedent's death. See Maryland Estate and Fiduciary Forms for a list of MET-1 forms.

File the return within nine (9) months after the decedent's date of death, or by the approved extension date. The Maryland estate tax return must be filed directly with the Comptroller of Maryland.

The Comptroller of Maryland will submit the MET-1 to the Register of Wills for certification on Section III.

Include the federal return, complete with all schedules, attachments and supporting documents when filing the Maryland estate tax return. In all cases, you must submit a certified death certificate, the last will and testament and any applicable trusts.

The Maryland estate tax is payable to the Comptroller of Maryland.

Mail the estate tax return and payment to:

Comptroller of Maryland
Estate Tax Section
P.O. Box 828
Annapolis, MD 21404-0828

The Comptroller will send the return to the Register of Wills for completion of Section III to certify the payment of inheritance taxes.

The Comptroller of Maryland may extend the time to file an estate tax return up to six months, or up to one year if the person required to file the return is out of the United States. There are also provisions for granting an alternative payment schedule for the tax payment.

The request for an extension must be in writing and filed on or before the due date of the Maryland estate tax return. The request must include:

If the estate is otherwise not required to file in Maryland (i.e. Federal gross estate of the decedent is under the Maryland filing threshold for the year of death of the decedent), but will be filing for portability purposes only, a MET1-E is not required to be filed to request an extension. In these specific cases, the MET1 must be filed within two years of the date of death of the decedent in order to be considered timely for portability purposes.

For more information, see Request an Extension.

2018 legislation established portability for Maryland estate tax purposes. Surviving spouses may elect to claim any unused portion of their predeceased spouse’s unused Maryland estate tax exemption under certain circumstances. 2020 legislation clarified that a Maryland estate tax return filed only for electing portability may be filed up to two years after the death of the decedent.

Legislation enacted during the 2018 legislative session decouples the Maryland exclusion amount from the federal amount, decouples Maryland from the federal unified credit and established portability. The Maryland Estate Tax-Unified Credit Act altered the unified credit used for determining the amount that can be excluded for Maryland estate tax purposes. The unified credit is equal to The amount that can be excluded for decedents dying on or after January 1, 2019 is $5.0 million. The Maryland exclusion amounts for decedents dying before January 1, 2019 remain the same: (1) $1.5 million for a decedent dying in calendar year 2015; (2) $2.0 million for a decedent dying in calendar year 2016; (3) $3.0 million for a decedent dying in calendar year 2017; (4) $4.0 million for a decedent dying in calendar year 2018.

The inheritance tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. The tax is imposed on the clear value of property that passes from a decedent to certain beneficiaries. It is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. For more information, contact the Office of the Register of Wills.

The inheritance tax paid to the Register of Wills is subtracted from the gross Maryland estate tax liability and the difference is the Maryland estate tax due. If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due.

However, the Maryland estate tax is owed and due until the inheritance tax is actually paid. If the amount of inheritance tax paid to the Register of Wills on or before the due date of the Maryland estate tax return is less than the gross Maryland estate tax liability, interest and/or penalty will be assessed on the outstanding liability. Interest will continue to accrue until the inheritance tax paid equals or exceeds the outstanding estate tax liability. See Comptroller of the Treasury v. Jameson, 332 Md. 723, 633 A.2d 93 (1993). For example, Estate owes $150,000 of estate tax, due by the nine (9) month statutory due date of January 1, 2014. Estate made two $75,000 payments of inheritance tax, one on December 1, 2013, and one on February 1, 2014. Because only $75,000 was paid by the estate tax due date, interest will be due on the remaining $75,000 from January 1, 2014 through February 1, 2014 when the amount of inheritance tax paid to the Register of Wills equaled the Maryland estate tax liability.

Yes. Maryland law imposes mandatory interest and late payment penalty if the tax is not paid when due. Interest is assessed on any portion of the liability that is not satisfied by the statutory due date, notwithstanding the fact that the tax is paid pursuant to an approved alternative payment schedule. A penalty of up to 10% is charged on any Maryland estate tax not paid by the due date.

Yes. However, penalty may only be waived for reasonable cause. Under current case law, this is a high bar to clear.

Merely forgetting to file a return, or accidentally filing the return a day or a few days late, is not reasonable cause. Absence of actual knowledge of the due date of an estate tax return or even the fact that a return was required to be filed is not reasonable cause for failure to file and pay the tax so as to be entitled to a waiver of the penalty. Failure to file a return or pay the estate tax timely is not excused by reliance on an agent, such as an accountant or attorney. The responsibility for filing the estate tax return and paying the tax belongs to the personal representative.

Reasonable cause can be established by demonstrating, with affirmative proof, that the taxpayer exercised ordinary business care and prudence in the filing of the estate. For example, in Comptroller of the Treasury v. Taylor, 465 Md. 76, the Maryland Court of Appeals found reasonable cause to waive penalty when the taxpayer put forth a coherent legal argument, based on the peculiar facts of the case, that certain property was excludable from the Maryland estate. Even though the argument was ultimately unsuccessful, the Court found that it was permissible to waive penalty.

Decisions on requests for penalty waivers are made on a case by case basis.

If you requested a refund check, you can request a photocopy of the cancelled check. If you requested a direct deposit to your bank account, you would have to check your bank statement and account information.

Fiduciaries who are personal representatives of estates are subject to the Maryland income tax - as well as the Maryland inheritance tax - and may have to file Maryland Form 504 and pay the Maryland income tax. Maryland follows federal rules for filing and paying estimated taxes. Personal representatives are exempt from paying estimated taxes during the first two taxable years of the estate. See also Fiduciary Information on the Tax Information page.

If the estate is opened and closed in the same year, you are only required to file a Maryland income tax return if you filed a federal fiduciary return and have Maryland taxable income. Generally, there is no Maryland taxable income if all the income is distributed during the estate closure.

Information must be provided to the beneficiaries so that they can file an accurate Maryland return. This includes information on Maryland source income and addition and subtraction modifications.

Personal representatives and trustees must file Maryland Form 504 to pay the Maryland income tax. Fiduciaries paying estimated taxes must file Maryland Form 504D provided by the Maryland Revenue Administration Division. See also Fiduciary Information.