Retirees looking for a state that would allow them to bequeath their estates to loved ones have another reason to put Georgia on their list. The Peach State is one of 33 in the country with no estate or inheritance taxes.
An inheritance tax is a levy, or a state tax, that a person pays on property or money received from the estate of a deceased person. The rates can vary based on the size of the inheritance or the recipient’s relationship to the deceased. This is different than an estate tax, which is a specific amount taken out of a deceased person’s estate once they’ve died.
States that have inheritance taxes include Iowa, Nebraska, Kentucky, Pennsylvania and New Jersey. Washington, Oregon, Minnesota, Illinois, New York, Vermont, Massachusetts, Connecticut and Maine, meanwhile, have estate taxes. Maryland levies both estate and inheritance taxes.
According to NerdWallet, one way you can avoid an inheritance tax is by giving away assets before death. To avoid estate taxes, SmartAsset reported giving gifts to family and making charitable donations as options.
But if you plan to retire in Georgia, you can skip these steps.
Kiplinger considers Georgia a tax-friendly state for retirees, not only because it has no inheritance or estate taxes. Georgia also has a moderate average combined sales tax rate of 7.35%, and prescription drugs and motor vehicles are generally exempt from state taxes here, though some local taxes may apply.
Kiplinger also notes that “taxpayers 65 and older can exclude up to $65,000 of retirement income (up to $35,000 for taxpayers age 62 to 64),” while for homeowners ages 62 and up who earn $10,000 or less, “up to $10,000 of their property’s assessed value is exempt from school taxes.”
When people consider retiring in Georgia, they think about the beauty of the state’s varied locales, from its coastal beaches and serene mountains to vibrant, bustling cultural cities like Atlanta. They consider the diverse range of communities and activities available.
But knowing that Georgia may also be a bit friendlier on a retirement budget and that estates can be handed over to loved ones without estate or inheritance taxes are an important part of that consideration, too.
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