Do I have to pay any inheritance taxes to the federal government or New York state?

A fellow caregiver asked...

Do I have to pay any inheritance taxes to the federal government or New York state? I am SS and I also want to know how this will effect my 2011 taxes

Expert Answer

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for Caring.com.

There is no federal inheritance tax. There is a federal estate tax that the executor of the estate must pay before distributing the bequests to the beneficiaries. However, in 2011 and 2012, the federal estate tax exemption is $5,000,000 for each individual. As long as a person's taxable estate is $5,000,000 or less, their estate does not have to pay federal taxes. In New York, there are no inheritance taxes. However, the state estate tax exemption is $1,000,000. So if someone dies with a taxable estate over $1,000,000, the executor is responsible for paying taxes from the estate. Therefore, your inheritance will have no impact on your personal taxes for 2011.