Estate and Inheritance Tax in Ohio 2026
Estate and Inheritance Tax in Ohio 2026
Ohio does not impose a state estate tax or a state inheritance tax. The Ohio estate tax was permanently repealed effective January 1, 2013. The only estate tax that applies to Ohio residents is the federal estate tax, which has a $15,000,000 exemption in 2026. Unlike Texas, Ohio does have a state income tax, which means a final state income tax return is required. This guide explains what was repealed, what still applies at the federal level, and what tax-related obligations exist for Ohio estates.
Ohio Has No State Estate Tax
Ohio formerly had a state estate tax under Ohio Rev. Code Chapter 5731. That tax applied to estates exceeding $338,333 at rates of 6% to 7%.
The Ohio estate tax was repealed effective for decedents dying on or after January 1, 2013. The repeal was signed by Governor Kasich on June 30, 2011 as part of the state budget bill. There is no sunset provision -- the repeal is permanent.
Unlike states such as Massachusetts and Oregon, Ohio does not have a standalone state estate tax. Ohio families owe no state-level estate tax regardless of estate size.
Ohio Has No Inheritance Tax
An inheritance tax is different from an estate tax. An estate tax is paid by the estate before assets are distributed. An inheritance tax is paid by the person who receives the inheritance.
Ohio has never imposed a separate inheritance tax.
As of 2026, only five states impose an inheritance tax: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. If you inherit money, property, or accounts from someone who died in Ohio, you owe no state tax on what you receive, regardless of the amount. If the deceased owned property in a state that does have an inheritance tax, you may owe that state's tax on property located there.
Ohio Has No Gift Tax
Ohio does not impose a state gift tax. Only the federal gift tax rules apply.
Ohio DOES Have a State Income Tax
Unlike Texas and a handful of other states, Ohio has a state income tax. This creates several obligations after a death:
Final Ohio income tax return. A final Ohio state income tax return must be filed for the deceased for the period from January 1 of the year of death through the date of death. This is due April 15 of the following year.
Estate income tax. If the estate generates income (interest, dividends, rent, capital gains) during administration, the estate may need to file Ohio income tax returns for the estate as well.
Federal Estate Tax in 2026
The federal estate tax is the only estate-level tax that could apply to an Ohio resident's estate.
Exemption. The federal estate tax exemption for deaths in 2026 is $15,000,000 per person. This was set by the One Big Beautiful Bill Act, which permanently set the exemption at $15 million, eliminating the previously scheduled sunset.
Rate. The top federal estate tax rate is 40% on amounts above the exemption.
Filing. IRS Form 706 is due 9 months after the date of death. A 6-month extension is available by filing Form 4768, but any estimated tax owed must still be paid by the 9-month deadline.
Portability. A surviving spouse can inherit the deceased spouse's unused federal exemption (DSUE). This requires timely filing of Form 706, even if no tax is owed. This effectively gives a married couple a combined $30 million exemption.
Who actually owes it. Fewer than 0.1% of deaths trigger a federal estate tax filing obligation. For the vast majority of Ohio families, the federal estate tax is not a factor.
Federal Income Tax After Death
Final Form 1040. The deceased's final federal income tax return covers January 1 through the date of death. Due April 15 of the following year, with a 6-month extension available via Form 4868.
Estate income tax, Form 1041. Once someone dies, the estate becomes a separate taxpayer. If the estate earns more than $600 in income after death, it must file Form 1041. The estate needs its own EIN.
Form 56. The executor should file Form 56 with the IRS to notify them of the fiduciary relationship. File promptly after appointment.
Form 1310. If you are claiming a refund on a deceased person's final return and you are not the court-appointed executor or surviving spouse filing jointly, you need to file Form 1310.
Qualifying Surviving Spouse status. If you were widowed and have a dependent child, you may file using the "Qualifying Surviving Spouse" tax rates for two years after the year of death.
Step-Up in Basis
Under IRC Section 1014, inherited property receives a new cost basis equal to the fair market value at the date of death. This is called the step-up in basis.
How it works. If someone bought stock for $50,000 and it was worth $200,000 when they died, the heir's basis in that stock is $200,000. If the heir sells it for $205,000, they owe capital gains tax on only $5,000, not $155,000.
Ohio is a common-law state. Unlike community property states (such as Texas or California), Ohio follows equitable distribution. This means only the deceased's share of jointly owned property gets a step-up in basis -- not both halves. For assets titled solely in the deceased's name, the full step-up applies.
Tax Forms and Deadlines
| Tax | Form | Deadline | Extension |
|---|---|---|---|
| Federal estate tax | 706 | 9 months after death | 6 months via Form 4768 |
| Final federal income tax | 1040 | April 15 of following year | 6 months via Form 4868 |
| Final Ohio income tax | Ohio IT 1040 | April 15 of following year | Ohio follows federal extension |
| Estate income tax (federal) | 1041 | April 15 of following year | 5.5 months via Form 7004 |
| Ohio state estate tax | None | N/A | Repealed January 1, 2013 |
| Fiduciary notification | 56 | Promptly upon appointment | N/A |
Medicaid Estate Recovery (MERP) in Ohio
While Ohio has no estate or inheritance tax, Medicaid estate recovery is a real financial issue for some Ohio families.
If the deceased received Ohio Medicaid benefits, the Ohio Department of Medicaid may file a claim against the estate to recover what it paid (Ohio Rev. Code Section 5162.21).
Who is subject to recovery:
- Permanently institutionalized individuals of any age
- Individuals age 55 or older for all Medicaid services correctly paid
Protections. No recovery may be made while any of the following are alive:
- The surviving spouse
- A child under age 21
- A child who is blind or disabled
Assets subject to recovery. Recovery applies to all real and personal property in the estate, including joint tenancy property, survivorship property, life estate interests, and living trust assets. This is broader than many states.
Undue hardship waiver. The Medicaid Director may waive recovery if it would cause undue hardship.
Claims deadline. Medicaid claims are subject to the same 6-month creditor claims period under Ohio Rev. Code Section 2117.06.
If the deceased received Medicaid benefits, consult an elder law attorney before distributing any estate assets.
Gift Tax Exclusion
The federal gift tax annual exclusion for 2026 is $19,000 per recipient. A married couple can jointly give $38,000 per recipient without filing a gift tax return or reducing their lifetime exemption.
Ohio has no state gift tax.
Estate Planning Considerations for Ohio Residents
Because Ohio has no state estate tax, no inheritance tax, and no gift tax, the planning environment for death taxes is straightforward. Key considerations:
Transfer-on-Death Designation Affidavit (TDDA). Ohio allows TOD designations for real property (Ohio Rev. Code Section 5302.22). Filing a TDDA means the property transfers to the named beneficiary at death without probate. The affidavit is revocable during the owner's lifetime.
POD and TOD designations. Use payable-on-death designations on bank accounts (Ohio Rev. Code Section 2131.10) and TOD designations on vehicles (Ohio Rev. Code Section 4505.10) to bypass probate.
Beneficiary designations. Review designations on retirement accounts, life insurance, POD accounts, and TOD registrations. These designations override the will. An outdated beneficiary designation is one of the most common estate planning mistakes.
Trusts. A revocable living trust avoids probate in Ohio but does not reduce federal estate tax. For estates near the $15 million federal threshold, advanced planning with an estate attorney may be worthwhile.
Frequently Asked Questions
Does Ohio have an estate tax? No. Ohio repealed its state estate tax effective January 1, 2013. The repeal is permanent with no sunset provision.
Does Ohio have an inheritance tax? No. Ohio has never had a separate inheritance tax.
Do I need to file an Ohio tax return for the estate? You need to file the decedent's final Ohio income tax return. The estate may also owe Ohio income tax if it generates income during administration. No Ohio estate tax return is needed.
What is the federal estate tax threshold in 2026? $15,000,000 per person. The top rate is 40%. Form 706 is due 9 months after death.
What to Do Next
If you are handling an Ohio estate, here is the order of operations for the tax side:
- File the decedent's final Ohio and federal income tax returns.
- If the estate earns income, obtain an EIN and file Form 1041 and Ohio estate income tax returns.
- If the estate exceeds $15 million, contact an Ohio estate attorney and CPA immediately.
- File Form 706 if you want to preserve the portability (DSUE) election for the surviving spouse.
- If the deceased received Medicaid, understand what the Ohio Department of Medicaid may claim before distributing assets.
For the full sequence of tasks, see the complete guide to what to do when someone dies in Ohio.
Kaira organizes every step for your state -- deadlines, forms, and next actions -- so nothing gets missed. See how it works.
This guide reflects Ohio and federal estate tax law as of April 2026. Tax laws change. For estates near the $15 million federal threshold or with Medicaid recovery concerns, consult an Ohio-licensed estate planning attorney and a CPA.
Sources: Ohio Rev. Code Chapter 5731 (repealed state estate tax); Ohio Rev. Code Section 5162.21 (Medicaid recovery); IRC Section 2010(c)(3) (Federal Estate Tax Exemption); IRC Section 1014 (Step-Up in Basis); IRS Publication 559; odh.ohio.gov; ssa.gov