There is no Florida estate tax, though you may still be subject to the federal estate tax. It’s one of 38 states in the country that doesn’t levy a tax on estates, regardless of size. If you’re concerned about estate planning, or any other financial planning concerns, you may want to consider getting professional help from a financial advisor. SmartAsset’s free financial advisor matching tool can help you find options in your area.
History of the Florida Estate Tax
Currently, there is no estate tax in Florida. The state abolished its estate tax in 2004. Prior to the change in 2004, federal law allowed a credit for death taxes, at the state level but on the federal tax return. The federal government ended up changing the credit to a deduction when you filed your state taxes. In Florida, the estate tax was based solely on the federal credit, so the state no longer needed the tax. Individuals who died on or after January 1, 2005, no longer triggered an estate tax.
What Is the Estate Tax?
Estate taxes are levied by the government on the estate of a recently deceased person. It only applies to estates worth a certain amount, which varies based on which municipality is levying the tax. You may have heard the term “death tax,” but estate tax is the legal term.
This tax is different from the inheritance tax, which is levied on money after it has been passed on to the deceased’s heirs.
Florida Inheritance Tax and Gift Tax
There is no inheritance tax in Florida, but other states’ inheritance taxes may apply to you. In Pennsylvania, for instance, the inheritance tax may apply to you even if you live out of state, as long as the deceased lived in the state. You’ll need to check the laws of the state where the person you are inheriting from lived.
Florida also has no gift tax. The federal gift tax exemption is $16,000 in 2022 and $17,000 in 2023. Gifting more than that to one person in a year counts against your lifetime exemption of $12.92 million.
Federal Estate Tax
Even though Florida doesn’t have an estate tax, you might still owe the federal estate tax, which kicks in at $12.06 million for 2022 and $12.92 million in 2023. What this means is that estates worth less than $12.92 million won’t pay any federal estate taxes at all. Conversely, if your estate surpasses that value, then any money above that mark will be taxed.
The federal estate tax exemption is portable for married couples. So if a married couple plans properly, they can have an exemption of up to $25.84 million after both spouses have died. If an estate exceeds that amount, the top tax rate is 40%. A full chart of federal estate tax rates is below.
Federal Estate Tax Rates
| Taxable Estate* | Base Taxes Paid | Marginal Rate | Rate Threshold** |
| $1 – $10,000 | $0 | 18% | $1 |
| $10,001 – $20,000 | $1,800 | 20% | $10,001 |
| $20,001 – $40,000 | $3,800 | 22% | $20,001 |
| $40,001 – $60,000 | $8,200 | 24% | $40,001 |
| $60,001 – $80,000 | $13,000 | 26% | $60,001 |
| $80,001 – $100,000 | $18,200 | 28% | $80,001 |
| $100,001 – $150,000 | $23,800 | 30% | $100,001 |
| $150,001 – $250,000 | $38,800 | 32% | $150,001 |
| $250,001 – $500,000 | $70,800 | 34% | $250,001 |
| $500,001 – $750,000 | $155,800 | 37% | $500,001 |
| $750,001 – $1,000,000 | $248,300 | 39% | $750,001 |
| Over $1,000,000 | $345,800 | 40% | $1,000,001 |
*The taxable estate is the total above the exemption of $12.92 million.
**The rate threshold is the point at which the marginal estate tax rate kicks in.
Federal Estate Tax Example
Let’s say your estate is worth $21.22 million and you aren’t married. Subtracting the exemption of $12.92 million creates a taxable estate of $8.3 million. This puts you in the highest bracket, meaning your base payment is $345,800. Then you subtract the $1 million you’ve already been taxed on to get that $345,800, which means the 40% rate applies to the other $7.3 million. That comes out to a tax of $2.92 million, plus the original $345,800, which equals a total tax of $3,265,800.
Overall Florida Tax Picture
Florida has a reputation for being a low-tax state. There is no state income tax in Florida which means that income, Social Security, retirement accounts and pension plans are all free of taxes. This makes Florida is a very tax-friendly state for retirees. You can calculate your take home pay using our Florida paycheck calculator.
The state sales tax is 6%, but taking into account local sales taxes, the average is 7.01%. Property taxes in Florida are right in the middle of the pack nationwide, with an average effective rate of 0.80%.
Bottom Line
There is no estate tax in the state of Florida since it was abolished after 2004. Even if you live in Florida, your estate may still owe a federal estate tax when you die. Regardless of how much you have in your estate, it’s important to make proper plans so that your estate is taken care of and your descendants are stuck with a large tax bill.
Estate Planning Tips
- Estate planning is important but it can get complicated very fast. It might be a good idea to speak with a financial advisor to help you plan your estate for the future. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When writing a will, make sure you know and stick to the legal guidelines. A lawyer can help you do this, but you should also make sure you’re aware of all the rules governing how your will can operate.
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