ESTATE TAX EXEMPTION LIKELY TO INCREASE IN MARYLAND
Sean Urbany, CPA
Late last week, the Maryland Senate passed a measure that will gradually raise Maryland’s $1 million estate tax exemption to match the much-higher federal exemption. The measure has already passed the House. If signed into law by Governor O’Malley, in 2015 the exemption will be $1.5 million and in 2016, it will be raised to $2 million. The increase will continue to rise to $3 million in 2017 and $4 million in 2018 before matching the federal exemption in 2019. The federal exemption is currently at $5.34 million for 2014, and indexed to inflation each year.
This follows changes by several other states (including New York, North Carolina, and Delaware, among others) to repeal and modify estate taxes. Changes are stirring in District of Columbia, which has some of the highest estate and inheritance tax rates in the nation. The DC Tax Revision Commission recently recommended raising the exemption up from $1 million to match the federal level. Virginia does not currently impose an estate tax on its residents.
For additional details on current regulations regarding estate planning, you can view this summary of theAmerican Taxpayer Relief Act of 2012, as well as our overview on portability. More details on the legislation are available at the General Assembly of Maryland’s website. We will posts updates on this issue when they are available.