On May 15, Governor O’Malley signed a bill into law that incrementally increases Maryland’s estate tax exemption amount over the next five years. By 2019, the bill’s scheduled increases will raise the amount exempt from Maryland’s estate tax to equal the then federal amount, re-coupling Maryland and Federal estate tax exemption amounts.
Maryland’s estate tax exemption equivalent is the amount of money that a deceased Maryland taxpayer can leave to his or her heir(s) (not including a spouse) without paying Maryland’s estate tax. Currently, the amount exempt from Maryland’s estate tax is $1,000,000.
Under the new law, the amount exempt from Maryland’s estate tax will rise according to the schedule below:
- 2014 – $1,000,000 (the current amount)
- 2015 – $1,500,000
- 2016 – $2,000,000
- 2017 – $3,000,000
- 2018 – $4,000,000
- 2019 – $5,340,000* (equal to the projected 2019 Federal estate tax exemption amount)
Maryland’s new estate tax exemption law may affect your current or future estate plans. As with all estate planning, it is important to have the complex legal issues created by Maryland’s new estate tax exemption law handled with care by legal counsel.
*The Federal exempt amount in 2014 is $5,340,000. With inflation adjustments it is likely to exceed this amount by 2019.