If you receive an inheritance valued at less than the estate tax exemption amount ($13.61 million in 2024 and $13.99 million in 2025), it isn’t subject to federal tax. Regardless of an estate’s size, heirs don’t have to report to the IRS, either. However, an estate’s executor must file a final tax return for the deceased person and may have to file an estate tax return. And if inherited assets produce gains, interest or earnings, that income usually is subject to income tax and must be reported. Also, several states (currently Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania) impose an inheritance tax. Contact us if you’ve received an inheritance and have tax questions. © 2024