Many people worry about estate taxes, either for themselves or for loved ones. Estate taxes leave individuals who inherit part of an estate with a potential financial burden, as they may owe taxes on the value of the estate. As a result, many people wonder what estate taxes look like on the state level as well as the federal level. If you’re curious about estate taxes in Georgia, here’s what you need to know.

What Is an Estate Tax?

Estate taxes are financial obligations placed against the value of an estate left by a deceased person. At times referred to as the “death tax,” it’s a financial obligation associated with the value of the property involved.

It is important to note that estate taxes and inheritance taxes are not the same things. An estate taxed is levied before any heirs receive money or property. Inheritance taxes are only assessed after an heir receives any funds or property they are receiving from the deceased.

Is There a Georgia Estate Tax?

No, there is no Georgia estate tax. In 2014, OCGA § 48-12-1 went into effect, eliminating estate taxes at the state level. It all ensured that no estate tax returns were required by Georgia.

Does Georgia Have an Inheritance Tax?

No, Georgia does not have an inheritance tax. However, Georgia residents may still be on the hook for inheritance taxes if the state where the deceased lived has legislation allowing out-of-state individuals to be subjected to its inheritance tax requirements.

Are Georgians Exempt from Federal Estate Taxes?

No, Georgia residents are not exempt from federal estate taxes, even if they aren’t paying estate taxes at the state level. Whether Georgians will own any federal estate taxes depends on the overall value of the estate.

What Federal Estate Taxes Look Like

How much a person owes in federal estate taxes depends on the value of what they receive from the estate. After any available exemption, you could owe 18 to 40 percent in taxes, depending on the taxable amount.

For 2020, the estate tax exemption is set at $11.58 million for individuals and $23.16 million for married couples filing jointly. If the value of what the heir will receive is at or below the exemption, they do not owe federal taxes on that amount. If the value exceeds the exemption, the amount above the exemption is taxable.

For 2021, the exemptions are increasing. Single taxpayers exemption is $11.7 million. For married couples, it is $23.4 million.

Spousal Exemptions

It is important to note that spouses don’t have to worry about exemptions. One spouse can inherit an unlimited amount of a deceased spouse without having to worry about estate taxes.

However, there is a chance these high-value exemptions won’t remain in place. President-elect Joe Biden has announced that he may attempt to return the exemptions to 2009 levels, lowering it to a $3.5 million exemption per person.

Are you concerned about estate taxes in Georgia, either for loved ones who inherit your estate or as a potential heir? Why or why not? Share your thoughts in the comments below.

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