State estate tax: YesState inheritance tax: No
Most states impose no estate or inheritance tax at all — only the federal estate tax applies. Minnesota is an exception: it levies a state estate tax. Because state thresholds are often far lower than the federal exemption, families here can face a state bill even when they owe nothing to the IRS.
The Minnesota estate tax
Minnesota imposes its own estate tax, separate from the federal one — and, importantly, its exemption is typically well below the federal exemption (~$15M per person in 2026). That means an estate that owes nothing federally can still owe Minnesota estate tax. The tax is paid by the estate before assets pass to heirs.
How federal and state fit together
The federal estate tax has a high exemption (~$15M per person, ~$30M per couple in 2026), so most families never owe it. State taxes like Minnesota's have their own, usually lower thresholds and their own rules. You can owe state tax, federal tax, both, or neither — they're assessed separately.
How gifting helps
Lifetime gifting reduces the size of your taxable estate — both federal and state. Gifts made during life (and the future growth on them) come out of the estate, and at the federal level you can give $19,000 per recipient per year with no filing at all. Tracking your gifts and projecting your estate is the practical first step.
See whether your estate is on track to cross a threshold with the Estate Tax Projector, and keep your gifting within the annual exclusion with the Gift Tax Calculator.
Other states with a death tax
You can owe state estate or inheritance tax in any of these states, each with its own thresholds and rules:
Connecticut · District of Columbia · Hawaii · Illinois · Kentucky · Maine · Maryland · Massachusetts · Nebraska · New Jersey · New York · Oregon · Pennsylvania · Rhode Island · Vermont · Washington
General information, not tax or legal advice. State death-tax rules and thresholds change and this page does not state specific figures — confirm Minnesota's current estate/inheritance tax thresholds and rates with the state tax authority and your CPA or estate attorney.
Plan your gifting while assets are smaller.
Family Matters tracks every gift against the exclusion and your lifetime exemption, so you can move growth out of a taxable estate deliberately. Be the first to try it.
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