If you have any questions about estate tax or estate tax in Washington State, Idaho, or any other estate planning matter, please contact our qualified estate planning attorneys at 509-328-2150. SmartAsset provides another deep dive into Washington State estate taxes. To determine the taxable estate in Washington, take the gross estate and subtract all eligible expenses and deductions. Eligible expenses and deductions include items such as the deceased`s funeral expenses, the cost of administering the estate, all debts of the deceased (mortgages, liens, unpaid bills), bequests to a spouse, donations to charity, deduction of farms (if eligible), deduction of eligible interest on the family business (if eligible) and the applicable exclusion amount. The threshold for estate tax in Washington is $2.193 million as of 2021. Thus, if a person`s estate is less than $2.193 million, it will not be taxed by Washington State after the person`s death. If the estate is greater than $2.193 million, the first $2.193 million is not subject to estate tax, but the tax is applied to the value of the estate above that threshold. Table W – Washington Estate Tax Calculation (for dates of death 1. January 2014 and beyond) Washington State Department of Revenue Attn Treasury Management Estate Tax 6500 Linderson Way SW Ste 227 Tumwater WA 98501-6561 Extensions, estate tax returns and estate tax correspondence are sent to: The Washington Estate and Transfer Act defines the „applicable exclusion amount” as used with respect to our state`s estate tax in RCW 83,100,020 (1) as follows: For more information, see Allocation of inheritance tax for out-of-state property.

An inheritance tax is the tax levied on a person`s estate before it is distributed after death. Strategic estate planning can help avoid or limit the payment of these estate taxes. Sometimes, however, inheritance tax can be unavoidable when it comes to a large estate at both the state and federal levels. If you are appointed as the personal representative of an estate, you are now an official and responsible for the proper administration of the estate`s assets. It is recommended to seek advice from a lawyer for all matters relating to the estate. *The taxable estate is greater than the exemption of $2.193 million. ** The rate threshold is when the marginal inheritance tax rate comes into effect. In general, direct gifts made before the date of death are not taxable for Washington estate tax purposes. Here`s an example: Let`s say your entire estate is worth $7 million.

With the $2.193 million exemption, your taxable estate is equal to $4.807 million. Find out where this total is in the table below. Property taxes are $550,000, think about that number. The bottom of the threshold is $4 million, which you subtract from $4.807 million and receive $807,000. This number multiplied by the marginal rate of 18% is equivalent to $145,260. This amount ($145,260) plus property taxes ($550,000) equals $695,260, which is your total estate tax burden in Washington. In 2016, the Washington State exclusion amount for estate tax payments is $2,079,000. This means that an estate with an overall valuation below this amount may not have to pay tax at all. However, it is important to note that estates worth $2,000,000 or more must still file estate tax files, even if the estate does not owe money. In a parliamentary election in November 1981, voters abolished an inheritance tax and enacted an inheritance tax. The transition from inheritance tax to inheritance tax entered into force on 1 January 1982. As a result of this change, Washington no longer has an inheritance tax exemption.

(ii) Two million dollars for the estates of deceased persons who died on or after January 1, 2006 and before January 1, 2014; Note: Returns filed on or after July 23, 2017 do not require the filing of an estate tax return, unless the gross estate is equal to or greater than the applicable exclusion amount. Washington is a mixed bag when it comes to taxes. For starters, Washington has no federal income tax, which means Social Security, retirement income, pensions, and other sources of income are not taxed. This makes it one of the most pensioner-friendly states. If you`re new to Evergreen State, you can use our Washington Paycheck Calculator to see how this lack of state income tax can affect your take-home pay. * Tax base – line 7 of Part 2 of the inheritance tax return. Inheritance tax is a tax levied on the estate of a recently deceased person before their money or property is passed on to their heirs. It is sometimes referred to as a „death tax” and only applies to estates of a specified value, which varies by state. It should not be confused with the inheritance tax that some states apply to money after its inheritance. Your estate planning lawyer can advise you on the different options available to you to minimize your tax burden. Many are likely to cross this threshold on their own with a home, retirement savings and life insurance benefits. Add rental properties or a successful business and you might be looking for a significant tax bill.

Keep in mind that many of these pension plans have deferred taxes for all of these years, so your beneficiaries owe income tax on all amounts in addition to estate tax, resulting in double taxation of these assets. The amount of inheritance tax exclusion is expected to increase in line with the Consumer Price Index, which is defined in subsection (b) above as the Consumer Price Index for the Seattle-Tacoma-Bremerton area, as calculated by the United States Bureau of Labor Statistics. The problem is that starting in 2018, the U.S. Bureau of Labor Statistics eliminated the consumer price index for the Seattle-Tacoma-Bremerton region and instead switched to calculating the consumer price index for the Seattle-Tacoma-Bellevue region. The result is that the exclusion amount applicable to taxable estates in Washington will be frozen at $2.193 million until Washington lawmakers update RCW 83,100. In conjunction with the Consumer Price Index, which is defined in subsection (b) as the Seattle-Tacoma-Bremerton Consumer Price Index calculated by the U.S. Bureau of Labor Statistics, this amount of inheritance tax exclusion is expected to continue to increase in parallel. Washington State estate tax applies to the value of an individual`s estate if it exceeds the exclusion amount set out in RCW 83,100. The value of agricultural property (land, inventory, products, equipment, etc.) can be deducted from the taxable amount of an estate, provided that the value of the farm property is at least half of the total adjusted value of the estate and meets other legal requirements. The business interruption is unlimited and is in addition to the applicable exclusion amount.

The executor of a deceased person is required to file an inheritance tax return if the gross estate reaches the filing threshold for the date of death.