Maryland Senate Approves Raising Estate Tax Exemption
We are happy to share the news that the Maryland Senate passed a measure, already passed by the House of Delegates, gradually raising the amount exempt from the state's estate tax to match the federal estate tax exemption. Governor Martin O'Malley's signature is expected shortly.
Maryland is one of 19 states plus the District of Columbia that impose state death taxes. In the last four years, Indiana, Kansas, North Carolina, Ohio and Oklahoma have all repealed their state death taxes, and Tennessee's is on its way out by January 1, 2016.
Right now, Maryland estates worth more than $1 million are taxed at a rate of up to 16%. Under the new law, that amount would rise to $1.5 million next year and $2 million in 2016 before the rate kicks in. The exemption would rise to $3 million in 2017 and $4 million in 2018 before being coupled with the federal exemption in 2019. The federal exemption, which is indexed to inflation, is projected to be $5.9 million in 2019.
Supporters of increasing the exemption for the estate tax say the change is needed to prevent wealthy residents from leaving Maryland. A variety of Maryland taxes have been raised in recent years, including the income tax on people in higher tax brackets.
This change is very beneficial to the families served by WMS and should have a very positive long term impact on residents in the State of Maryland. Our advisors will be discussing the effects of these changes with our clients who are Maryland residents in upcoming meetings. Should you have any questions regarding how this change will impact your own personal situation please don't hesitate to contact us.