No, beneficiaries don’t have to pay inheritance tax in Georgia. The state has no inheritance tax and eliminated its estate tax in 2014. However, very large estates may still owe federal estate tax, and certain inherited assets like retirement accounts can trigger income tax when you withdraw the funds.
As an estate planning firm serving clients throughout Gwinnett County and Metro Atlanta, Life Well Lived Law Group helps families understand these tax rules and plan accordingly. Attorney Sharon Jackson works with beneficiaries and estate owners to address the financial aspects of inheritance so there are no surprises down the road.
Georgia Eliminated Its Estate Tax in 2014
Georgia officially ended its estate tax on July 1, 2014. Before that date, the state’s estate tax was tied to a federal tax credit that no longer exists. Since 2014, the estates of Georgia residents owe nothing to the state, regardless of their value.
The state also has no inheritance tax. This means you won’t owe Georgia any money simply because you received assets from someone who passed away. Many people confuse the estate tax and the inheritance tax, but they work differently. Estate tax is paid by the estate before assets are distributed. Inheritance tax, which Georgia doesn’t have, would be paid by you after you receive your share.
This puts Georgia among the many states that don’t collect any form of death tax. That said, you may still have federal tax obligations depending on the estate’s total value.
Federal Estate Tax Still Applies to Large Estates
While Georgia doesn’t collect estate tax, the federal government does. For 2025, estates valued under $13.99 million for an individual (or $27.98 million for a married couple) owe nothing in federal estate tax. Only the portion above that threshold is taxed, and rates can reach up to 40%.
The IRS administers the federal estate tax and requires estates exceeding the exemption to file Form 706 within nine months of death. The estate’s executor or personal representative handles this filing and pays any tax due before distributing assets to beneficiaries.
For most Georgia families, the federal estate tax won’t apply. The $13.99 million exemption covers the vast majority of estates. Still, those with substantial assets should work with an estate planning attorney to structure their affairs wisely.
When Inherited Assets Can Trigger Income Tax
Even without inheritance tax, you may owe income tax on certain inherited assets. The rules depend on what you inherit:
Inherited retirement accounts are the most common source of tax liability for beneficiaries. When you withdraw money from an inherited traditional IRA or 401(k), those distributions count as ordinary income. You’ll pay tax at your regular income tax rate.
The IRS requires most non-spouse beneficiaries to withdraw all funds from an inherited retirement account within 10 years of the original owner’s death. Spouse beneficiaries have more flexibility and can often roll the account into their own IRA.
Inherited Roth IRAs work differently. Since the original owner already paid tax on those contributions, qualified withdrawals are typically tax-free. You still must empty the account within 10 years if you’re not a spouse, but you won’t owe income tax on those distributions.
Real estate, cash, and other property generally don’t create immediate tax liability. You receive these assets at their current fair market value, which becomes your new cost basis. If you later sell inherited property for more than that value, you’ll owe capital gains tax on the profit.
How Life Well Lived Law Group Helps Georgia Families
Understanding your tax situation before and after inheriting assets can save significant money and stress. Attorney Sharon Jackson helps clients in Lawrenceville and throughout Metro Atlanta navigate these rules.
For those creating an estate plan, we review your assets and family situation to identify potential tax concerns. We can recommend strategies to minimize taxes for your beneficiaries while ensuring your wishes are carried out.
For beneficiaries who’ve recently inherited assets, we help you understand your obligations and options. This includes determining whether any federal tax returns are required and how to handle inherited retirement accounts efficiently.
States That Collect Inheritance Tax
If you inherit property from someone who lived in another state, you may owe inheritance tax to that state even as a Georgia resident. As of 2024, six states… and Iowa’s tax is scheduled to end in 2025; going forward, five states (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) are expected to continue to impose inheritance tax.
For example, if your aunt lived in Pennsylvania and left you money, you might owe Pennsylvania inheritance tax on that gift. The rate and exemption depend on your relationship to the deceased. Spouses are typically exempt, while distant relatives and non-family members pay higher rates.
This is why it’s important to understand where the deceased person lived and where their assets are located. Georgia residents don’t owe Georgia anything, but other states may have claims.
FAQs About Georgia Inheritance Tax
Do I need to report inherited money on my Georgia tax return? Generally, no. Georgia doesn’t tax inherited money, and the IRS doesn’t consider most inheritances taxable income. The main exceptions are inherited retirement accounts, where withdrawals are taxed as ordinary income, and inherited property that produces ongoing income.
Who pays estate tax if it’s owed: the beneficiary or the estate? The estate pays federal estate tax before distributing assets to beneficiaries. The executor files the return and pays any tax due from estate funds. Beneficiaries don’t receive a bill for estate tax.
Is there a deadline for taking money from an inherited IRA? For non-spouse beneficiaries who inherited from someone who died in 2020 or later, you must withdraw all funds within 10 years. Spouse beneficiaries have additional options, including rolling the inherited IRA into their own account.
Can estate planning reduce taxes for my beneficiaries? Yes. Strategies like gifting during your lifetime, establishing trusts, and structuring asset ownership can help reduce estate tax exposure and provide more flexibility for your heirs. An estate planning attorney can evaluate which approaches fit your situation.
Key Points to Remember
- Georgia has no inheritance tax and eliminated its estate tax in 2014.
- The federal estate tax only affects estates exceeding $13.99 million (2025 threshold).
- Inherited retirement accounts like traditional IRAs create income tax liability when you take withdrawals.
- Inherited Roth IRAs are typically tax-free for beneficiaries.
- If you inherit from someone in a state with an inheritance tax, that state’s rules may apply to you.
Contact Life Well Lived Law Group for Help With Your Estate Planning Case
If you’re planning your estate or recently inherited assets, understanding the tax rules is essential. Life Well Lived Law Group helps Georgia families make informed decisions about their financial futures.
Sharon Jackson is a trusted estate planning attorney in Lawrenceville serving Gwinnett County and Metro Atlanta. Visit Attorney Sharon Jackson’s profile to learn more about her experience and approach.
Call (678) 909-4100 to schedule a consultation.
