Florida does not have a state inheritance tax

Florida has no state-level inheritance tax. When someone dies and leaves you money or property, you do not owe Florida state tax on that inheritance. This applies whether you live in Florida, the person who died lived in Florida, or both.

The federal government does have an estate tax, but it only applies to very large estates. For 2024, the federal threshold is $13.61 million. Unless the person who died had an estate larger than that, their heirs owe no federal estate tax either. Most Floridians never encounter it.

Some states tax inheritances or estates. Florida is not one of them. This is one reason Florida attracts retirees and wealthy individuals — the state has no income tax and no inheritance tax.

Key Takeaways

  • Florida imposes no state inheritance tax on money or property you receive from someone's estate.
  • The federal estate tax only applies to estates worth more than $13.61 million as of 2024, a threshold that changes yearly.
  • You may still owe federal income tax on certain inherited assets that generate income after you receive them, such as rental property or investment accounts.
  • The person handling the estate (the executor or personal representative) may need to file a federal estate tax return if the estate is large enough, but that is their responsibility, not yours as an heir.

When the federal estate tax actually applies

The federal estate tax is a tax on the total value of everything someone owned when they died — their house, bank accounts, investments, vehicles, and personal property. It is paid by the estate itself before money is distributed to heirs, not by the heirs directly.

The executor or personal representative of the estate decides whether to file a federal estate tax return (Form 706). They must file if the estate's total value exceeds the threshold. For 2024, that threshold is $13.61 million for a single person or $27.22 million for a married couple. These numbers change each year based on inflation.

If the estate is below the threshold, no federal estate tax return is required and no tax is owed. The executor simply distributes the assets to the heirs. This is the situation for the vast majority of Florida estates.

Income tax on inherited assets after you receive them

Inheriting money or property itself does not trigger income tax. But if that inherited asset generates income after you own it, you may owe federal income tax on that income.

For example: if you inherit a rental house, you do not owe tax on receiving it. But once you own it and collect rent, that rental income is taxable to you. If you inherit a brokerage account with stocks that pay dividends, those dividends are taxable income to you going forward. If you inherit a savings account, interest earned after you inherit it is taxable income.

Inherited cash itself is never taxable income. Inherited real estate is not taxable income. The tax applies only to new income the asset generates after the inheritance is complete.

What happens if someone dies with a will in Florida

When a Florida resident dies with a will, the will goes through probate court. The court appoints a personal representative (often called an executor) to manage the estate. The personal representative collects the deceased person's assets, pays any debts and taxes owed by the estate, and distributes what remains to the heirs named in the will.

During this process, the personal representative may need to file a federal estate tax return if the estate is large enough. They do not file a Florida state inheritance tax return because Florida has no such tax. They may also file a final federal income tax return for the deceased person (Form 1040) if the person had income in the year they died.

The heirs receive their inheritance after the personal representative completes these tasks and the court approves the distribution. The heirs themselves do not file anything related to receiving the inheritance, unless they later owe income tax on income that asset generates.

What happens if someone dies without a will in Florida

If a Florida resident dies without a will, Florida's intestacy laws determine who inherits. The spouse and children typically inherit first, then parents, then siblings, depending on who survives. The court still appoints a personal representative to manage the estate and follow the same process as with a will.

Again, there is no Florida inheritance tax to pay. The personal representative handles any federal estate tax return if needed and distributes the assets according to state law.

Trusts and how they affect inheritance taxes

Some people in Florida set up revocable living trusts to avoid probate. Assets held in a trust pass directly to the beneficiaries named in the trust document without going through probate court. This can save time and money, but it does not change the tax picture.

A revocable living trust does not reduce federal estate tax. The value of assets in the trust still counts toward the federal estate tax threshold. If the estate is large enough to owe federal estate tax, the trustee (the person managing the trust) may need to file a federal estate tax return, just as an executor would.

Irrevocable trusts can sometimes reduce federal estate tax, but they are more complex and have other consequences. This is an area where the person setting up the trust should consult a tax professional or attorney.

Frequently Asked Questions

Do I owe Florida tax if I inherit money from someone who lived out of state?

No. Florida has no inheritance tax regardless of where the person who died lived or where you live. However, the state where the person died might have an inheritance or estate tax. You would need to check that state's rules, not Florida's.

What if I inherit property in Florida from someone who lived in another state?

You do not owe Florida inheritance tax. You may owe property tax going forward as the new owner, but that is a different tax and applies to all property owners, not just heirs. The state where the person died might have an estate tax that applies to the property, so check that state's rules.

Do I need to report my inheritance to the IRS?

No. Inherited money and property do not need to be reported to the IRS. You only report income that the inherited asset generates after you own it. If you inherit a house and later sell it, you may owe capital gains tax on the profit, but that is a separate issue from the inheritance itself.

What if the estate is very large — over $13 million?

The executor or personal representative must file a federal estate tax return (Form 706) if the estate exceeds the threshold. They handle this, not you. The estate pays the tax from its assets before distributing money to heirs. You do not file anything or pay tax directly as an heir, though the amount you inherit may be smaller because the estate paid federal tax.

Can I reduce federal estate tax by moving to Florida?

No. Federal estate tax is based on citizenship and the location of assets, not where you live. Moving to Florida does not change your federal estate tax status. However, Florida's lack of state income tax and inheritance tax does make it attractive for tax planning purposes overall.