What is Maryland's inheritance tax rate?

Maryland charges a flat 10% inheritance tax on the clear value of property passing to a taxable beneficiary. Unlike the estate tax, it has no graduated schedule, so the rate is the same 10% regardless of the size of the bequest.

Which heirs are exempt?

Spouses, children and other lineal descendants, parents, grandparents and other lineal ancestors, siblings, and the spouse of a child are all exempt from Maryland inheritance tax. Property passing to any of these relatives is fully tax-free.

Who actually pays the 10%?

The tax falls on collateral and unrelated heirs — nieces, nephews, cousins, friends, and anyone not in the exempt lineal or sibling classes. A niece inheriting $50,000 owes 10% on the clear value above the small-bequest exemption.

Is there a small-bequest exemption?

Yes. Bequests of $1,000 or less to an individual are exempt, and the tool applies a $1,000 reduction to the taxable value. Life insurance proceeds paid to a named beneficiary are also fully exempt regardless of relationship.

How does this interact with the estate tax?

Maryland has both taxes, but they are coordinated. Inheritance tax paid on an estate's assets is credited against the Maryland estate tax, so the same property is not taxed twice. Use the Maryland Estate Tax calculator for the estate-level figure.

Maryland Inheritance Tax Calculator

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Maryland’s inheritance tax turns on one question: who is receiving the property. Close relatives — spouses, children, parents, siblings, and other lineal kin — inherit completely tax-free, while collateral and unrelated heirs pay a flat 10% of the clear value. This calculator applies the relationship rules and the small-bequest exemption to show what each heir actually owes.

How it works

The relationship determines whether any tax applies at all; if it does, the rate is a flat 10%:

exempt heir       → no inheritance tax (spouse, child, parent, sibling, etc.)
life insurance    → exempt to a named beneficiary
taxable heir      → taxable value = bequest − $1,000 small-bequest exemption
inheritance tax   = 10% × taxable value
net to heir       = bequest − tax

There is no graduated schedule and no large lifetime exemption — the test is purely the class of beneficiary, which is why naming an unrelated friend instead of a sibling can change the tax from zero to thousands.

Notes and planning

Because the tax is relationship-based, estate planning often routes gifts through exempt relatives or uses exempt vehicles like life insurance. Remember the coordination with the estate tax: any inheritance tax paid credits against Maryland’s estate tax on the same assets, so they don’t stack. This is a planning estimate based on the published 10% rate and exemptions — confirm the classes and current rules with the Maryland Register of Wills; it is not legal or tax advice.