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Estate Tax versus Inheritance Tax

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Minnesota Estate Tax is a tax on all of the assets of a decedent before they are distributed to their beneficiaries.

Inheritance tax is a tax on what beneficiaries of an estate inherit. Minnesota does not have an inheritance tax.

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As a beneficiary, you generally do not need to report your inheritance on your income tax return. You may have to pay income tax on the pre-tax dollars in IRA and annuity accounts.

Income tax is paid to the state where the beneficiary lives, not where the decedent lived. 

Inheritance Tax Waiver

The Minnesota Department of Revenue does not issue inheritance waiver or clearance letters.

Minnesota’s inheritance tax was repealed starting in 1980.

Resources

For more information, go to IRS Publication 559, Survivors, Executors and Administrators.

Estate Tax versus Inheritance Tax

Resources

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