Florida state inheritance tax does not exist. Florida is one of the states that does not tax money or property a beneficiary receives from someone who has died. Federal estate tax, capital gains, and out-of-state rules can still apply — so Orlando families need a plan that accounts for all three. 

What is Florida state inheritance tax? 

Florida state inheritance tax is a tax that does not exist. Florida abolished its inheritance and estate tax decades ago, and the state collects nothing from money or property passed to a beneficiary. 

An inheritance tax is a tax the beneficiary pays after receiving assets from someone who has died. Only six US states still charge one — Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Florida is not on that list. 

A Florida resident who inherits a house in Orlando, a bank account in Winter Park, or shares from a parent who lived in Clermont owes the state of Florida no inheritance tax. That is true whether the inheritance is one thousand dollars or one million. 

The relief is real, but it is also incomplete. Federal rules, the state where the deceased lived, and the type of asset can each change the picture — which is why Florida families still need a plan. 

Does Florida have an estate tax? 

Florida does not have a state estate tax either. The state stopped collecting its estate tax in 2005, after the federal credit it relied on was phased out by Congress. 

An estate tax is different from an inheritance tax. An estate tax is paid by the estate before assets are distributed to beneficiaries — it comes out of the estate’s value, not the heir’s pocket. 

Florida residents pay no state estate tax regardless of how large the estate is. A two-million-dollar estate in Orange County, a five-million-dollar estate in Seminole County — both pass to heirs without a single dollar going to Tallahassee. 

The federal estate tax is the only death-related tax a Florida estate may still face. We cover the federal rules in the next section. 

How does federal estate tax affect Florida families? 

Federal estate tax only applies to estates worth more than the federal exemption — set at $13.99 million per person for 2025, with married couples able to combine their exemptions for an effective $27.98 million. 

Most Florida families never pay federal estate tax. Fewer than 0.1% of US estates owe any federal estate tax at all, according to recent IRS data. 

For estates above the exemption, the federal estate tax rate climbs in brackets up to 40%. The estate — not the heirs — pays this tax, and the executor files IRS Form 706 within nine months of death. 

The exemption is scheduled to drop to roughly $7 million per person on January 1, 2026, unless Congress acts. Families with estates that may approach this threshold in Orlando, Windermere, or Winter Garden should review their plan now. 

This is where a thoughtful estate plan earns its keep. I help Orlando families structure their wills, trusts, and beneficiary designations so the assets pass cleanly — without surprise federal tax, probate delays, or family stress. Start with a conversation — visit Estate Planning at Lumsden Law or call (407) 798-7744 today. 

Can a Florida resident still owe inheritance tax from another state? 

A Florida resident can owe inheritance tax to another state if the person who died lived in a state that collects one. The tax follows the deceased person’s state of residence, not the heir’s. 

An Orlando resident who inherits from an aunt in Pennsylvania, for example, will pay Pennsylvania inheritance tax on that gift — even though they live in Florida. Pennsylvania’s rate ranges from 0% for surviving spouses to 15% for non-relatives. 

Real estate is the other exception. Inherited property located in a state that taxes estates or inheritances may be taxed by that state, regardless of where the heir lives. 

This catches Central Florida families off guard. If you are inheriting from someone outside Florida, ask about the rules in their state first. 

What other taxes might apply to a Florida inheritance? 

Other federal taxes can still affect a Florida inheritance even when no inheritance tax applies. The three most common are capital gains tax, income tax on retirement accounts, and the generation-skipping transfer tax. 

Capital gains tax applies when an heir sells an inherited asset. The good news: inherited property receives a stepped-up basis to its value on the date of death — so only post-inheritance appreciation is taxed. 

Inherited retirement accounts, such as traditional IRAs and 401(k)s, are taxed as ordinary income when the heir withdraws funds. Most non-spouse beneficiaries must empty the account within 10 years of the original owner’s death. 

Life insurance proceeds and Roth IRAs typically pass income-tax-free, provided the Roth’s five-year holding rule is met. 

Two related questions families ask me next: should I use a will or a trust, and what happens if my estate has to go through probate? Read more on Trusts vs Wills in Florida estate planning and the Florida probate process. Families watching the 2026 federal exemption reset should also see recent tax changes affecting your Florida estate plan. 

Frequently Asked Questions About Florida State Inheritance Tax 

Is there an inheritance tax in Florida? 

No — Florida does not have a state inheritance tax. A Florida resident who inherits money, property, or investments from someone who has died owes the state of Florida nothing in inheritance tax, regardless of the amount inherited or their relationship to the deceased. 

Does Florida have an estate tax? 

No — Florida abolished its state estate tax in 2005. Florida estates pay no state-level tax on assets transferred at death. The only death-related tax that may apply is the federal estate tax, and only on estates worth more than $13.99 million per person in 2025. 

Do beneficiaries pay tax on inherited money in Florida? 

Beneficiaries in Florida pay no state inheritance tax on inherited money. Federal income tax can apply to inherited retirement accounts and to capital gains when inherited assets are sold, but the act of inheriting itself is not a taxable event in Florida. 

How much can you inherit in Florida without paying federal estate tax? 

A Florida estate can pass up to $13.99 million per person to heirs in 2025 without owing any federal estate tax. Married couples can combine exemptions to pass up to $27.98 million tax-free. The exemption is set to drop to roughly $7 million per person in 2026. 

Do I need an estate plan if Florida has no inheritance tax? 

Yes — Florida residents still need an estate plan even without state inheritance tax. A will, trust, or power of attorney protects against probate delays, family disputes, and unnecessary federal tax exposure. Without a plan, Florida law decides who inherits — not you. 

Talk to an Orlando Estate Planning Attorney 

Ready to put a plan in place that protects your family from the taxes that do apply? At Lumsden Law, my Estate Planning service walks you through every step — wills, trusts, and beneficiary designations built around your family. Call (407) 798-7744 or book a consultation today — I will make sure you feel supported every step of the way.