Estate taxes in Georgia are simple at the state level: Georgia imposes no estate tax and no inheritance tax, no matter how large the estate. Federal estate tax still exists, but it only reaches estates above $15 million per person in 2026. For almost every Georgia family, the tax work after a death is really about income tax returns, not death taxes.
No State Estate or Inheritance Tax
Georgia repealed its estate tax effective July 1, 2014 under O.C.G.A. § 48-12-1. The state requires no estate tax return and collects no estate tax regardless of estate size.1Georgia Department of Revenue. Estate Tax – FAQ
Georgia also has no inheritance tax. The two taxes often get mixed up, but they work differently. An estate tax is calculated on the total value of the deceased person’s assets before anything is distributed. An inheritance tax is paid by each beneficiary on what they personally receive. Georgia imposes neither.1Georgia Department of Revenue. Estate Tax – FAQ
When Federal Estate Tax Still Applies
Federal estate tax reaches Georgia residents with large estates. The One Big Beautiful Bill Act, signed into law on July 4, 2025, set the basic exclusion amount at $15 million per individual for 2026.2Internal Revenue Service. What’s New – Estate and Gift Tax That amount will adjust annually for inflation starting in 2027.3Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
Married couples can effectively double the threshold through portability. When the first spouse dies without using the full $15 million, the surviving spouse can claim the unused amount, potentially sheltering up to $30 million. To preserve that benefit, the executor of the first spouse’s estate must file a timely Form 706 and elect portability, even when the estate itself owes nothing.4Internal Revenue Service. Estate Tax
Amounts above the exclusion are taxed at an effective rate of 40%. Deductions for funeral expenses, debts, charitable bequests, and transfers to a surviving spouse reduce the taxable portion before the rate is applied.
Form 706 Filing Deadline
Form 706 is required if the gross estate plus adjusted lifetime taxable gifts exceeds $15 million, or if the executor is electing portability for a surviving spouse regardless of estate size.5Internal Revenue Service. Frequently Asked Questions on Estate Taxes
The return is due nine months after the date of death. An automatic six-month extension is available by filing Form 4768 before the original deadline. The extension gives extra time to file, but it does not extend the deadline for paying the tax. Interest and penalties accrue on any unpaid balance after the nine-month mark.5Internal Revenue Service. Frequently Asked Questions on Estate Taxes
Lifetime Gifts and the Shared Exemption
The federal gift tax and the estate tax share one unified exemption. Every dollar of taxable gifts made during life reduces the exemption available at death. For 2026, the lifetime exemption is the same $15 million that applies to estates.2Internal Revenue Service. What’s New – Estate and Gift Tax
The annual exclusion sits outside that figure. You can give up to $19,000 per recipient in 2026 without touching your lifetime exemption. Married couples who agree to split gifts can give $38,000 per recipient. Annual exclusion gifts do not require a gift tax return unless you are electing gift-splitting.2Internal Revenue Service. What’s New – Estate and Gift Tax
Gifts above the $19,000 annual exclusion must be reported on Form 709. Filing the return doesn’t mean you owe gift tax. The excess simply counts against your lifetime exemption. Actual gift tax only kicks in once you have used the entire $15 million.6Internal Revenue Service. Frequently Asked Questions on Gift Taxes
If you made large gifts during the higher-exemption years from 2018 through 2025, those gifts will not be clawed back if the exemption later falls. The IRS allows the estate to calculate its credit using the higher of the exemption that applied when the gift was made or the exemption in effect at death.7Internal Revenue Service. Estate and Gift Tax FAQs
Step-Up in Basis for Inherited Assets
Beneficiaries who inherit appreciated property get a federal tax benefit that often matters more than any estate tax question. Under 26 U.S.C. § 1014, the cost basis of inherited property resets to its fair market value on the date of the owner’s death.8Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
Say your parent bought an Atlanta house for $80,000 in 1990 and it was worth $450,000 when they died. Your basis becomes $450,000. If you sell shortly after for $460,000, you owe capital gains tax on $10,000, not on the full appreciation from 1990.
The adjustment runs both ways. If an asset has lost value since purchase, the basis steps down to the lower date-of-death value. Georgia is a common-law property state, so when spouses own an asset jointly, only the deceased spouse’s share receives the adjustment. The surviving spouse keeps the original basis on their half.
When Another State’s Inheritance Tax Can Reach You
Georgia’s lack of an inheritance tax does not always protect its residents from other states. Five states still impose inheritance taxes: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. A Georgia resident who inherits from someone who lived in one of those states may owe tax to that state.
Rates in those states generally depend on the relationship between the deceased and the beneficiary. Surviving spouses are typically exempt. Children and other direct descendants often pay reduced rates or qualify for large exemptions. Siblings, nieces, nephews, and unrelated beneficiaries face the steepest rates, which can reach 16% in some states.
The tax follows the location of the deceased, not the beneficiary. Inheriting from a parent who died in New Jersey means satisfying New Jersey’s requirements before the inheritance is released, and the same logic applies when the deceased owned real property in one of those five states.
Final Income Tax Return for the Decedent
Income tax, not estate tax, is what most Georgia executors actually deal with. The personal representative must file a final Georgia income tax return covering January 1 through the date of death. Georgia taxes individual income at a flat rate of 4.99% for 2026.9Justia Law. Georgia Code 48-7-20 – Individual Tax Rates; Credit for Withholding and Other Payments; Applicability to Estates and Trusts
The return reports all income earned before death: wages, interest, dividends, rental income, and any other taxable amounts. The executor claims the standard or itemized deductions the person would have been entitled to for a full year. A final federal Form 1040 is also required.
Unpaid income tax becomes a debt of the estate and takes priority over distributions. An executor who distributes assets before settling the tax bill can become personally liable for the shortfall. Filing the final returns and paying any balance should be an early task after appointment.
Income Tax on the Estate During Administration
An estate often keeps earning income after death through bank interest, dividends, rent, or gains from asset sales during administration. That income is taxed separately from the decedent’s final return.
At the federal level, the estate must file Form 1041 if it earns more than $600 in gross income during a tax year.10Internal Revenue Service. File an Estate Tax Income Tax Return Georgia has a parallel requirement. Fiduciary income earned by an estate is taxed at the same rate that applies to individuals, and the executor files Georgia Form 501.11Justia Law. Georgia Code 48-7-22 – Taxation of Fiduciaries, Estates, and Trusts
Income distributed to beneficiaries during the year generally shifts the tax to them. The estate deducts the distributed amount, and each beneficiary reports their share on their personal return using a Schedule K-1 from the executor showing the amount and character of the distribution. Estates that retain income pay the tax themselves, and federal trust and estate brackets compress quickly, reaching the top marginal rate at much lower income levels than individual filers face.