Tuesday, January 19, 2021
The District of Columbia has already put an estate tax levy in place that went into effect on January 1, 2021. The "Estate Tax Adjustment Act" reduced the exemption from $5.67 million in 2020 to $4 million for individuals who died on or after January 1, 2021. For reference, "a resident dying in 2021 with a taxable estate of $10 million would owe nearly $1 million in estate tax to D.C."
Seventeen other states have imposed their own estate or inheritance taxes that are separate from the federal estate tax. As of now, the estate tax exemption is $11.58 million per person, but is set to drop back down to $5 million per person (adjusted for inflation).
Conversation has developed over President-elect Joseph Biden's tax plan proposal which calls for the federal estate tax to go back down to $3.5 million per person, which was the level in 2009.
The revenue from these taxes could possibly be used to help rebuild the country and repair the damage done by the pandemic.
See Ashlea Ebeling, State Death Tax Hikes Loom: Where Not To Die In 2021, Forbes, January 15, 2021.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.