1. Connecticut
- Estate tax: Yes
- Estate tax exemption level: $5.1 million
- Estate tax rates: between 10 percent and 12 percent
- Inheritance tax: No
- Inheritance tax rates: N/A
Now, the estate tax exemption amount in Connecticut is $5.1 million, but on the first day of 2021, it will rise to $7.1 million. Also, this state is the only one that taxes the assets you give away while you’re still alive.
So, it’s quite simple: if you loved giving taxable gifts this year, state law demands you to file a Connecticut estate and gift tax return in order to identify such gifts. However, in 2020 taxes are due when the value of gifts made since 2005 surpasses $5.1 million, or $7.1 million in 2021.
2. District of Columbia
- Estate tax: Yes
- Estate tax exemption level: $5,762,400
- Estate tax rates: between 12 percent and 16 percent
- Inheritance tax: No
- Inheritance tax rates: N/A
As for 2020, if we compare Washington, D.C. to other U.S. places, we will spot estates that are valued over $5,762,400—which is a big sum. All these estates are subject to the city estate tax this year; however, in 2021, this great amount will drop to $4 million.
In fact, it will be modified every single year for inflation starting with 2022.
3. Hawaii
- Estate tax: Yes
- Estate tax exemption level: $5.49 million
- Estate tax rates: between 10 percent and 20 percent
- Inheritance tax: No
- Inheritance tax rates: N/A
Hawaii has a pretty high estate tax ($5.49 million). But, fortunately for its residents, the amount is not adjusted for inflation.
As you might have already noticed, the Aloha State has estate tax rates that range from 10 percent to 20 percent—and this is nothing new, but which is new for this year is that the highest rate, namely 20 percent is for estates that are worth more than $10 million.
