Inheritance Tax Waiver Requirements in Alabama

by Jane Meggitt; Updated September 26, 2017

Since the Alabama inheritance tax was abolished, there is no longer a need for an inheritance tax waiver. However, if the decedent died before Jan. 1, 2005, heirs and beneficiaries still must file the Alabama inheritance tax waiver. The estates of decedents dying after Jan. 1, 2011 are subject to federal estate tax if over $5 million.

Inheritance and Estate Taxes

Although the funds come from the same source, the decedent's assets in his estate, an inheritance tax and an estate tax are not the interchangeable. The inheritance tax must be paid by any heirs or beneficiaries after receiving the money from the estate. The estate tax must be paid before the assets are disbursed to named heirs and beneficiaries in the will or those inheriting from an intestate decedent whose estate passed through the laws of intestate succession.

Elimination of the Inheritance Tax Waiver

The federal government passed legislation in 2001 eliminating the federal estate and gift tax until 2009. Although the reinstatement was to re-occur by 2011, as of June 2011, the inheritance tax was not reinstated in Alabama. According to the Alabama Department of Revenue, the state's filing requirement is based on estate tax credit allowed under federal law. No inheritance waivers were necessary past Sept. 30, 2005, for decedents passing as of Jan. 1, 2005. Such waivers had to be filed within nine months of the decedent's death.

States with Estate or Inheritance Taxes

Although Alabama has not re-introduced the inheritance or estate tax, many states which abolished the taxes after the 2001 federal legislation have re-introduced them to bring in additional revenue. Several other states never abolished the inheritance tax after 2001. While most states impose either an estate or inheritance tax, New Jersey and Maryland impose both types of taxes.

Federal Estate Taxes

The estate of anyone dying in 2010 was not subject to federal estate tax. The estates of those passing as the New Year dawned and afterward owe federal tax on amounts over $5 million. While the heirs of Alabama decedents do not have to pay state inheritance tax, they may inherit less of a very large estate due to the federal tax. The federal tax limit does not apply to the surviving spouse of the decedent, who may inherit an unlimited amount.

About the Author

Jane Meggitt has been a writer for more than 20 years. In addition to reporting for a major newspaper chain, she has been published in "Horse News," "Suburban Classic," "Hoof Beats," "Equine Journal" and other publications. She has a Bachelor of Arts in English from New York University and an Associate of Arts from the American Academy of Dramatics Arts, New York City.