If you’re an Ohio resident trying to figure out whether your estate or an inheritance you’re about to receive will be taxed, you’re asking the right question at the right time. The vocabulary alone (estate tax, inheritance tax, federal exemption) confuses a lot of people, and the rules just shifted again heading into 2026.
The federal estate tax exemption didn’t shrink this year the way many families were warned it would. It grew. For 2026, the exemption sits at $15 million per person, and that higher number is now locked in permanently rather than scheduled to expire.
At Jarvis Law Office, we help Ohio families plan ahead every day, regardless of which way the tax law is moving. Our focus stays the same: keeping assets protected, avoiding probate, and making sure your wishes get carried out without unnecessary cost or delay.
Key Takeaways
- Ohio still has no estate tax and no inheritance tax in 2026.
- The federal estate tax exemption is now $15 million per individual ($30 million for a married couple), and Congress made this permanent instead of letting it drop as originally scheduled.
- Gifting, trusts, and the portability election remain the main tools for reducing federal exposure.
- Inheriting a retirement account can still create an income tax bill, even when no estate tax applies.
What’s the Difference Between Estate Tax and Inheritance Tax?
These two terms get used interchangeably, but they describe different taxes paid by different people.
Estate tax
When someone dies with assets above a certain threshold, the estate may owe tax before any of it reaches the heirs. At the federal level, that threshold is $15 million in 2026. Only estates above that line owe anything.
Inheritance tax
This tax is calculated differently. It’s based on how much a specific beneficiary receives and how closely they were related to the deceased. It’s charged by the state where the deceased person lived (or where certain property sits), not by the federal government.
Does Ohio Have Estate or Inheritance Tax in 2026?
No, on both counts. Ohio has neither an estate tax nor an inheritance tax.
Ohio’s estate tax was repealed back in 2013. Before that, any estate over roughly $338,000 owed the state something. Today, an Ohio estate could be worth $500,000 or $50 million, and Ohio itself won’t tax a dollar of it.
The same is true for inheritance tax. If you inherit from someone who lived in Ohio, the state doesn’t touch it, no matter the amount or your relationship to them.
However, if the person who passed away lived in a state that still charges inheritance tax, you could owe that state something, even though you live in Ohio. Whether that applies depends on:
- Where the deceased person was legally domiciled
- Where specific assets (especially real estate) are physically located
- That state’s own inheritance tax rules
If you’re not sure whether this applies to you, it’s worth a quick check with a probate attorney rather than guessing.
What Changed With the One Big Beautiful Bill Act (OBBBA)?
For the past several years, estate planners had a specific date circled on the calendar: January 1, 2026. That’s when the higher exemption created by the 2017 Tax Cuts and Jobs Act was scheduled to expire, cutting the federal exemption roughly in half, down to somewhere around $7 million per person.
That drop didn’t happen.
Congress passed the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, which made the higher exemption permanent instead of letting it sunset. The IRS has since confirmed the 2026 basic exclusion amount at $15 million per person, up from $13.99 million in 2025.
Starting in 2027, that number will be adjusted annually for inflation rather than facing another cliff.
If you spent the last couple of years rushing to gift assets or restructure your estate before an expected 2026 drop, it’s worth revisiting that plan. The urgency that drove a lot of 2024–2025 planning has eased, though the underlying reasons to plan (probate avoidance, asset protection, family dynamics) haven’t gone anywhere.
How Does the Federal Estate Tax Work in 2026?
The federal estate tax only applies once an estate’s value clears $15 million for an individual in 2026. Anything above that line is taxed, the exemption itself is never touched. For married couples, proper planning can extend that shield to $30 million combined.
The rate on the taxable portion climbs as high as 40%, and it’s progressive rather than flat, similar in structure to income tax.
Assets counted toward the total estate value include:
- Cash and bank accounts
- Real estate
- Investment portfolios
- Business ownership interests
- Life insurance proceeds, if the estate itself is listed as the policy owner
Even with a lower exemption in past years, fewer than 1% of U.S. estates were ever large enough to owe federal estate tax. With the exemption now higher, that share shrinks further, but if your estate is anywhere near the threshold, this is exactly the kind of planning worth doing before it becomes urgent.
What About Spousal Portability and IRS Form 706?
One planning tool that gets overlooked, especially by Ohio families who assume “no state estate tax” means “nothing to file,” is portability.
If a married person dies without using their full $15 million exemption, the unused portion doesn’t have to disappear. Through an election called the Deceased Spousal Unused Exclusion (DSUE), a surviving spouse can add that leftover exemption to their own, effectively protecting up to $30 million combined.
However, Portability isn’t automatic. The executor generally has to file federal Form 706 within nine months of death (with an extension available), even if the estate is well under the filing threshold and owes nothing.
If you skip that filing, then the unused exemption is typically lost for good. This is a step families sometimes miss precisely because Ohio itself doesn’t require any estate tax paperwork, so it’s easy to assume nothing needs to be filed at all.
What Steps Can I Take to Avoid Estate Taxes and Leave More to My Family?
Here are the main tools:
- Use the annual gift exclusion. You can give up to $19,000 per recipient per year (the 2026 limit, unchanged from 2025) without touching your lifetime exemption or filing a gift tax return. Given consistently over years, this can meaningfully shrink a taxable estate.
- Set up a trust. Trusts can move assets outside your probate estate and, depending on the type, outside your taxable estate as well. Options range from revocable living trusts to irrevocable and special-purpose trusts.
- Coordinate exemptions if you’re married. With portability properly elected, a married couple’s combined shield reaches $30 million in 2026.
- Make charitable gifts. Donations to qualified charities reduce your taxable estate while supporting causes you care about.
- Revisit your plan periodically. The 2026 exemption increase is a good reminder that tax law doesn’t stand still. Review your estate plan every few years or after a major life event, rather than assuming an old plan still fits today’s rules.
Do I Have to Pay Taxes If I Inherit an IRA, 401(k), or Home?
Inheriting assets rarely triggers estate tax for the recipient, but it can absolutely trigger income tax, depending on what you receive.
Retirement accounts (IRAs, 401(k)s).
These accounts are typically tax-deferred, meaning the money hasn’t been taxed yet. Under the SECURE Act rules, most non-spouse beneficiaries must withdraw the full balance within 10 years of inheriting it, and those withdrawals count as taxable income. Spouses generally have more flexible options.
Inherited homes and real estate.
Heirs usually receive a step-up in basis, the property’s value resets to its fair market value on the date of death. Sell soon after inheriting, and you may owe little to no capital gains tax.
Cash and other assets.
In most cases, receiving cash or property doesn’t create a tax bill on its own, unless it comes from a state that still charges inheritance tax.
Do Other States’ Estate or Inheritance Taxes Affect Ohio Residents?
Ohio residents are shielded from state-level death taxes on assets held here, but it’s worth knowing what’s happening elsewhere, especially if you own out-of-state property or expect to inherit from someone who lived elsewhere.
As of 2026, a handful of states still charge a state-level inheritance tax, including Pennsylvania, Kentucky, Nebraska, Maryland, and New Jersey. Rates and exemptions vary significantly by relationship.
Separately, roughly a dozen states plus Washington, D.C. still impose their own estate tax, with exemption thresholds well below the federal $15 million level, meaning an estate that owes nothing to the IRS could still owe tax to one of those states.
If you own a vacation home, farmland, or other real estate outside Ohio, or if a parent or relative lives in one of these states, it’s worth confirming the specific rules rather than assuming Ohio’s tax-free treatment travels with you.
Want to Keep More in Your Family’s Hands, and Out of Probate?
If you’re ready to protect what you’ve built, avoid unnecessary taxes, and keep things simple for the people you leave behind, Jarvis Law Office is here to help. Our team focuses on strategic estate planning and probate avoidance, using practical tools like trust-based asset transfers and straightforward, cost-effective planning solutions.
Reach out to us directly through our contact page to schedule a conversation. Let’s make sure everything you’ve worked for stays exactly where you intend it to go.
