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.
- "Forbes"; Where Not to Die in 2011 -- June Update; Ashlea Ebeling
- Internal Revenue Service. "Deceased Taxpayers – Filing the Estate Income Tax Return, Form 1041." Accessed Jan. 30, 2020.
- JRC Insurance Group. "States with an inheritance tax." Accessed Jan. 17, 2020.
- Internal Revenue Service. "Instructions for Form 706 (08/2019)." Accessed Jan. 17, 2020.
- Iowa Department of Revenue. "Iowa Inheritance Tax Rates." Accessed Jan. 17, 2020.
- Maryland Office of the Register of Wills. "Administration of Estates in Maryland," Pages 1-2. Accessed Jan. 17, 2020.
- Kentucky Department of Revenue. "A Guide to Kentucky Inheritance and Estate Taxes," Page 1. Accessed Jan. 17, 2020.
- Maryland Office of the Register of Wills. "Administration of Estates in Maryland," Page 1. Accessed Jan. 17, 2020.
- Hawbaker Law Office. "Nebraska Inheritance Tax," Pages 1, 3. Accessed Jan. 17, 2020.
- New Jersey Department of Treasury. "Inheritance and Estate Tax Definitions." Accessed Jan. 30, 2020.
- New Jersey Department of Treasury. "Inheritance Tax Beneficiary Classes." Accessed Jan. 17, 2020.
- New Jersey Department of Treasury. "Inheritance and Estate Tax Branch." Accessed Jan. 17, 2020.
- Pennsylvania Department of Revenue. "Inheritance Tax." Accessed Jan. 17, 2020.
- Bucks County Register of Wills. "Pennsylvania Inheritance Tax." Accessed Jan. 17, 2020.
- Internal Revenue Service. "Frequently Asked Questions on Estate Taxes." Accessed Jan. 17, 2020.
- Internal Revenue Service. "Estate Tax." Accessed Jan. 17, 2020.
- Office of the Law Revision Counsel of the United States House of Representatives. "26 USC 2056: Bequests, etc., to surviving spouse." Accessed Jan. 17, 2020.
- Urban-Brookings Tax Policy Center. "How do state estate and inheritance taxes work?" Accessed Jan. 17, 2020.
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.