Will I Have to Pay Taxes on an Inheritance?

How much can you inherit before you pay taxes in Georgia? As much as you receive. Georgia does not impose an inheritance tax, so no state threshold limits what a beneficiary can inherit, and it does not impose an estate tax under current law. Federal estate tax rules and income tax obligations tied to certain inherited assets may still matter, though. Both the amount you inherit and the type of asset you receive affect your potential tax consequences.

Understanding inheritance and taxes before you receive anything can prevent unpleasant surprises. Our estate planning attorneys can help you sort through what applies to your situation.

Does Georgia Have an Inheritance Tax?

Georgia has no estate tax and no inheritance tax. The two are different: estate taxes come out of the estate itself, while inheritance taxes are paid by the people who receive the assets. People often mix them up, and that confusion can lead to bad planning decisions. Georgia imposes no state inheritance tax and no state estate tax. Beneficiaries do not owe any state-level tax on assets they inherit, and the state completely eliminated its estate tax under O.C.G.A. § 48-12-1(a).

Because Georgia has no inheritance tax, there is no exemption amount to calculate. Whether you inherit $10,000 or $1 million, you generally owe no Georgia tax simply for receiving it. Still, a tax on receiving an inheritance is different from other obligations tied to owning inherited property, such as income from a retirement account or tax on a later sale. We cover those below.

What Is the Difference Between Inheritance Tax and Estate Tax?

An estate tax is generally assessed against the deceased person’s taxable estate before assets reach beneficiaries. An inheritance tax is imposed on the person receiving the assets, where state law provides for one, and the amount often depends on the relationship to the person who died. Spouses typically do not pay anything, children often pay little or nothing, and friends or distant relatives may pay more.

Georgia imposes neither. Federal estate tax is a separate matter, and it is based on the deceased person’s estate, not on how much one beneficiary receives. If you are planning how assets will pass to your family, thoughtful estate planning can make a real difference.

When Does Federal Estate Tax Apply?

The federal estate tax applies only to estates that exceed the applicable exclusion amount, subject to the relevant rules and calculations. For individuals who die in 2026, the threshold for federal estate tax is $15 million.

Internal Revenue Service

This threshold applies to the deceased person’s estate and is not a limit on what an individual beneficiary can inherit. The gross estate, adjusted taxable gifts, deductions, and any surviving-spouse portability election can all affect the calculation. A large inheritance does not automatically mean you owe federal estate tax personally.

Some estates must file a return even when no tax is owed. Filing requirements and whether tax is ultimately due are related but distinct questions, and you can review the federal estate tax filing requirements in the IRS Instructions for Form 706. For larger estates, our tax law guidance can help.

Do You Have to Pay Income Tax on Inherited Money?

Cash and property you receive as an inheritance are generally not taxable income simply because you inherited them. But an inheritance can be tax-free in one respect and still create tax obligations in another.

• Retirement accounts: Distributions from traditional IRAs and certain retirement plans may be taxable, depending on the account and your circumstances.
• Investments: Interest, dividends, and capital gains after you inherit may create tax obligations.
• Real estate: Rental income or a taxable gain from a later sale may have tax consequences, and the property’s basis and applicable exclusions matter.

Tax treatment depends on the asset type, timing, and your individual circumstances. See the IRS guidance on inherited property and income for general information, and consider our tax law services if you have questions.

What If You Inherit Money From Someone Who Lived in Another State?

The deceased person’s state of residence, along with the location and type of the inherited property, can affect which laws apply. Some states impose inheritance taxes, and some impose estate taxes. Living in Georgia does not automatically eliminate tax obligations under another state’s law, so verify the rules that apply to the specific estate.

How Can You Prepare for an Inheritance?

Start by reviewing the estate documents and understanding how the assets will be distributed. Identify the types of assets you will inherit and any distribution or reporting requirements that come with them. A complex inheritance, especially one involving retirement accounts, business interests, real estate, or multiple states, may deserve review by an estate or tax attorney.

Contact a Georgia Estate Planning Attorney

Advance planning helps families understand their options and responsibilities. Our estate planning attorneys and tax law services are here to help. If you have questions about an inheritance or estate planning, the attorneys of Stewart, Melvin & Frost are ready to assist you. Visit our Contact Page or call 770-536-0101 today.