It's one of the first concerns people bring to their first estate tax planning meeting: "I've worked my whole life to leave a legacy for my children. How much is the government going to take from their inherited assets?" In this blog, RKPT’s estate planning attorneys answer this question and more.
For any Ohio resident who anticipates having a taxable estate, the reality is reassuring: Ohio has no estate tax and no inheritance tax, and the federal estate tax exemption is $15 million per person in 2026. The vast majority of Ohio families will never owe federal estate taxes.
| $0 Ohio estate tax | $0 Ohio inheritance tax | $15M Federal exemption per person (2026) |
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Does Ohio Have an Estate Tax?
No, Ohio repealed its estate tax in 2013.
For anyone who died on or after January 1, 2013, Ohio estate tax returns and county tax release forms are no longer required. Ohio also has no inheritance tax, so your children, grandchildren, and other heirs won't owe the state anything simply because they received an inheritance.
The old rule still applies to estates of anyone who died before 2013. That's rare today, but it does come up with long-delayed estates and newly discovered assets. The Ohio Department of Taxation no longer actively levies an estate administration collection process.
The Federal Estate Tax Only Applies to Large Estates
Federal estate tax law exists, but the exemption is high. For deaths in 2026, the basic exclusion is $15,000,000 per person. It will be adjusted for inflation starting in 2027. Only the value above the exemption is taxed, at rates that quickly top out at 40%.
A few factors may stretch that exemption even further:
Married couples can effectively double this exemption.
Anything left to a U.S. citizen spouse passes free of estate tax; a surviving spouse can claim whatever exemption the first spouse didn't use (called the DSUE), for a combined $30 million. (To take advantage of this, the executor has to file a federal estate tax return, even if no tax is owed. Speak with an estate planning attorney at RKPT to learn more.)
Lifetime gifts count, but small ones don't.
In 2026 you can give up to $19,000 per person to as many people as you like without touching your exemption. Larger gifts require a gift tax return and reduce the exemption left at death, but they don't create a tax bill unless you've given away more than $15 million in total. Instead, whatever you give away during life (above the annual exclusion) will be deducted from your lifetime exemption when you die.
For example, if you pass away in 2026 with $10 million in your taxable estate, but you gave away $8 million while you were alive, the $8 million gets deducted from the $15 million, leaving you with $7 million of exemption at your death. The amount over $7 million is taxed at 40%.
| Taxable estate at death | $10,000,000 |
| Lifetime gifts above the annual exclusion | $8,000,000 |
| 2026 exemption | $15,000,000 |
| Exemption left at death ($15M minus $8M) | $7,000,000 |
| Amount taxed at 40% | $3,000,000 |
Taxes That May Still Apply to Ohio Families
If your estate is under $15 million, here's where a tax bill is more likely to come from:
Kentucky's Inheritance Tax
Kentucky still has an inheritance tax, and it applies to Kentucky real estate and tangible property, even when the owner lived in Ohio. A lake house on Lake Cumberland or a rental property in Covington can bring a Kentucky return with it.
The Kentucky Department of Revenue classifies beneficiaries by their relationship to the decedent; they will either be exempt or owe up to 16% of their inheritance after exemption. (In practical terms: if you leave your Kentucky cabin to your kids, there's no tax—but if you leave it to a son-in-law or a close friend, there may be.) Read more: Will My Family Owe Estate Tax in Kentucky?
Income Tax on Inherited Retirement Accounts
Inheriting a traditional IRA or 401(k) isn't taxed as an inheritance, but withdrawals are taxed as income. Most non-spouse beneficiaries now have to empty an inherited account within ten years. A large account can push an adult child into a higher bracket during their peak earning years. Who you name as beneficiary, and whether some accounts go to charity or convert to Roth, can make a difference. Without proper planning, the ten-year rule may be reduced to five years, pushing the annual taxable income even higher.
Capital Gains Tax
Most assets your heirs inherit, like a house or a stock portfolio, get a "step-up" in basis to their value at your death. If your kids sell soon after, there's usually little or no capital gains tax. Assets you give away during life don't get that step-up, which is one reason giving away the family home or other highly appreciated assets, like stocks, before your death can backfire.
Estate tax will probably not be an issue, but planning still matters.
For most Ohio families, the costs at death aren't taxes. They're probate delays, outdated beneficiary designations, Kentucky property nobody planned for, and an inherited IRA that gets cashed out in one painful tax year. Those are all solvable with a plan.
Frequently Asked Questions about Ohio Estate Tax Laws
Does Ohio have an inheritance tax?
No. Ohio has no inheritance tax, and its estate tax was repealed for deaths on or after January 1, 2013.
Do I need to file a federal estate tax return if my estate is under $15 million?
Usually not. But if you're married, filing Form 706 at the first spouse's death preserves their unused exemption for the survivor, even when no tax is due.
I live in Ohio but own property in Kentucky. Will my heirs owe Kentucky tax?
Possibly. Kentucky's inheritance tax applies to Kentucky real estate owned by nonresidents. Spouses, children, grandchildren, parents, and siblings are exempt, and for deaths on or after January 1, 2026, so are nieces and nephews; most other heirs aren't.
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