Florida has no state estate tax, but federal estate tax may still explore to your estate
Florida does not charge a state estate tax. This is one of the few tax breaks Florida offers, and it means your heirs will not owe Florida any tax based on the size of your estate when you die. However, the absence of a state tax does not mean your estate is tax-free overall. The federal government still taxes large estates, and that federal tax applies to Florida residents the same way it applies everywhere else.
The key difference is that Florida residents avoid a second layer of taxation that residents of states like New York, Massachusetts, and Oregon face. Those states tax estates in addition to the federal tax. A Florida resident with a $7 million estate pays only federal tax (if any); a New York resident with the same estate pays both federal and state tax.
Whether your Florida estate actually owes federal tax depends on how much money and property you leave behind, not on where you live. The federal threshold changes every year and is set by Congress.
Key Takeaways
- Florida imposes no state estate tax, so your heirs will not owe Florida any tax on your estate no matter how large it is.
- Federal estate tax applies to Florida residents if their estate exceeds the federal threshold, which was $13.61 million per person in 2024 and changes annually.
- Married couples can combine their thresholds, potentially sheltering nearly $27 million from federal tax in 2024, but only if they plan ahead.
- Florida also has no state inheritance tax, meaning beneficiaries do not owe Florida tax on money or property they receive.
- The federal threshold is scheduled to drop significantly in 2026 unless Congress acts, which could affect more Florida estates.
How the federal estate tax threshold works
The federal government taxes estates only when they exceed a certain amount. That amount is called the federal exemption, and it changes every year based on inflation. In 2024, the exemption is $13.61 million per person. An estate worth $13.6 million owes no federal tax. An estate worth $14 million owes federal tax only on the $390,000 above the threshold.
This threshold is much higher than it was decades ago, which is why most Florida estates do not face federal tax. The IRS estimates that fewer than one in every 1,000 estates owe federal tax in any given year. However, the threshold is temporary. Congress set it to expire at the end of 2025, which means it will drop to roughly $7 million per person in 2026 unless lawmakers extend it. That change could affect significantly more estates.
The tax rate on the amount above the threshold is 40 percent. So if your estate is $15 million and the exemption is $13.61 million, the taxable amount is $1.39 million, and the federal tax owed is roughly $556,000.
How married couples can double their protection
Married couples have a major advantage: they can each use their own exemption. If you are married, you and your spouse together can shelter nearly $27.22 million from federal tax in 2024 (two times $13.61 million). This is true even if all the money is in one spouse's name.
The catch is that you have to plan ahead. The surviving spouse can only use the deceased spouse's unused exemption if the estate of the first spouse to die files a federal estate tax return and makes an election called portability. This means filing a form with the IRS even if no tax is owed. Many couples skip this step because they assume they do not need to file, and then the surviving spouse loses the dead spouse's exemption forever.
If you are married and your combined assets are close to or above the exemption threshold, talk to an estate planning attorney or tax professional before one of you dies. The cost of filing that return is far less than the tax you could owe if portability is missed.
What happens when the exemption drops in 2026
The federal exemption is scheduled to fall from $13.61 million to approximately $7 million per person on January 1, 2026, unless Congress extends the current law. This is not a change Florida is making — it is a federal change that will affect all Americans. However, it will hit Florida residents just as hard as residents of other states.
If you have an estate worth $8 million to $13 million, you are currently safe from federal tax. After 2025, you would owe federal tax on the amount above $7 million. This does not mean you should panic or rush into decisions, but it does mean that if you have a large estate, you should review your plan with a professional sooner rather than later. There are legal strategies to reduce the size of your taxable estate, and they work better when you have time to implement them.
Congress could extend the current exemption, lower it gradually, or let it drop as scheduled. No one knows what will happen, which is why planning based on what you know today is more reliable than waiting for a future change.
Florida inheritance tax and beneficiary taxes
In addition to having no state estate tax, Florida also has no state inheritance tax. An inheritance tax is a tax on the person who receives money or property from an estate. Some states, like Iowa and Kentucky, charge the beneficiary a tax on what they inherit. Florida does not.
This means if you inherit $500,000 from a Florida resident's estate, you owe Florida no tax on that inheritance. You may owe federal income tax on certain types of inherited property (like retirement accounts), but that is a federal rule, not a Florida rule, and it applies the same way in every state.
Why Florida's lack of estate tax matters for your planning
The absence of a state estate tax is one reason some wealthy people move to Florida. It saves money compared to living in a state that taxes estates. However, it is not the only factor that matters. Your overall tax picture depends on income tax, property tax, and where you spend most of your time. Florida has no state income tax, which is a bigger advantage for most people than the lack of estate tax.
If you are considering moving to Florida partly for tax reasons, or if you already live here and have a large estate, the time to plan is now. The federal exemption is high today but will shrink in 2026. An estate planning attorney can review your situation and explain whether you need to take action. The cost of that conversation is small compared to the tax bill your heirs could face if you do not plan.
Frequently Asked Questions
Do I need to file a federal estate tax return if I live in Florida?
You need to file only if your estate exceeds the federal exemption threshold. In 2024, that is $13.61 million per person. However, if you are married and want to preserve your spouse's unused exemption through portability, you should file even if no tax is owed. Talk to a tax professional about your specific situation.
What counts toward my estate for federal tax purposes?
Your estate includes everything you own: real estate, bank accounts, investments, retirement accounts, life insurance, vehicles, and personal property. It also includes certain gifts you made during your lifetime if they exceeded the annual gift tax limit. The value is what your property was worth on the date you died, not what you paid for it.
Can I reduce my taxable estate while I am still alive?
Yes. You can give away money or property during your lifetime, make gifts to charity, set up trusts, and use other legal strategies to reduce what your estate will owe in tax. These strategies work better when you have time to plan, which is why reviewing your estate sooner rather than later matters.
If I move to Florida from another state, do I owe that state's estate tax?
Not if you become a Florida resident before you die. However, some states try to claim you were still a resident at death if you kept property there or spent significant time there. Establishing Florida residency clearly — through a driver's license, voter registration, and other documents — protects your estate from that claim.
What is the difference between an estate tax and an inheritance tax?
An estate tax is paid by the estate itself before money goes to heirs. An inheritance tax is paid by the person who receives the inheritance. Florida has neither. Some states have one, some have both, and some have neither.