There is no Georgia estate tax and no Georgia inheritance tax. The state repealed its estate tax effective July 1, 2014, and it has never imposed a tax on beneficiaries who receive an inheritance. Federal estate tax still applies to estates above $15 million per person for deaths in 2026, and the executor still has to close out the decedent’s final income tax returns at both the state and federal level.
Georgia Repealed Its Estate Tax in 2014
Georgia used to collect a “pick-up tax” tied to a federal credit for state-level death taxes. When Congress phased that credit out, the state’s revenue from the tax went to zero, and the legislature formally abolished it.
Under O.C.G.A. ยง 48-12-1, no estate tax is levied by the state and no state estate tax return is required for anyone who died on or after July 1, 2014.1Justia. Georgia Code 48-12-1 – Elimination of Estate Taxes and Returns; Prior Taxable Years Not Applicable It does not matter how large the estate is. Georgia will not tax it.
Georgia Has No Inheritance Tax Either
An estate tax applies to the decedent’s property before it is distributed. An inheritance tax applies to the person receiving the property. Georgia imposes neither, and the Georgia Department of Revenue confirms there is no state inheritance tax regardless of the beneficiary’s relationship to the deceased.2Georgia Department of Revenue. Estate Tax – FAQ A spouse, child, sibling, friend, or unrelated beneficiary all receive their share with no state-level transfer tax.
One boundary to keep in mind: if you inherit from someone who lived in a state that does impose an inheritance tax, that other state may still tax the transfer to you. Georgia will not send a bill, but the decedent’s state might.
Federal Estate Tax Still Applies to Large Estates
No state tax does not mean no tax. The federal government taxes estates whose total value exceeds the basic exclusion amount, which for 2026 is $15,000,000 per individual.3Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax The One Big Beautiful Bill Act set this $15 million baseline as permanent, replacing the temporary increase from the Tax Cuts and Jobs Act. Starting in 2027, the figure adjusts annually for inflation.
The gross estate covers everything the decedent had an ownership interest in at death: real property, bank and investment accounts, retirement accounts, life insurance proceeds, business interests, and personal property. If the combined value crosses $15 million, the executor must file IRS Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. It is due nine months after the date of death. An automatic six-month extension is available if the executor files Form 4768 before the original deadline.4Internal Revenue Service. Frequently Asked Questions on Estate Taxes
The federal estate tax rate starts at 18 percent on the first $10,000 above the exemption and climbs to 40 percent on amounts more than $1 million above the exemption.5Office of the Law Revision Counsel. 26 USC 2001 – Imposition and Rate of Tax Missing the filing deadline triggers a failure-to-file penalty of 5 percent of the unpaid tax for each month the return is late, up to 25 percent.6Internal Revenue Service. Failure to File Penalty On an estate with any meaningful tax liability, that climbs quickly.
Portability of a Spouse’s Unused Exemption
When the first spouse dies without using the full $15 million exemption, the surviving spouse can claim the leftover amount. This is called portability of the deceased spousal unused exclusion, or DSUE. If one spouse dies with a $5 million estate, the surviving spouse can add the unused $10 million to their own $15 million exemption, potentially sheltering up to $25 million at their later death.
Portability is not automatic. The executor of the first spouse’s estate has to file Form 706 and make the election, even if the estate is otherwise too small to require a return. For estates below the filing threshold where the only reason to file is the portability election, Rev. Proc. 2022-32 gives executors up to five years from the date of death to file.4Internal Revenue Service. Frequently Asked Questions on Estate Taxes The return must include a notation at the top stating it is filed pursuant to Rev. Proc. 2022-32.7Internal Revenue Service. Revenue Procedure 2022-32 Skip the filing and the surviving spouse permanently loses whatever exemption the first spouse did not use.
Lifetime Gifts Reduce the Federal Exemption
The federal estate and gift taxes share one unified exemption. Taxable gifts made during life reduce what is available at death. For 2026, the annual gift tax exclusion is $19,000 per recipient. Gifts up to that amount carry no gift tax consequences and do not touch the lifetime exemption. Married couples can combine their exclusions for $38,000 per recipient.
Gifts above the annual exclusion eat into the $15 million lifetime exemption dollar for dollar. Giving $1,019,000 to one person in a single year means $19,000 falls under the annual exclusion and $1,000,000 reduces the lifetime exemption from $15 million to $14 million. The donor has to file IRS Form 709 for any year in which gifts exceed the annual exclusion, even when no tax is owed. Direct payments to a school for tuition or to a medical provider for treatment are fully exempt and do not count against either the annual exclusion or the lifetime cap.
Stepped-Up Basis for Inherited Property
Georgia does not tax inheritances, but beneficiaries still need to understand how inherited property is taxed when they eventually sell it. Under federal law, inherited assets receive a new basis equal to their fair market value on the date of the decedent’s death.8Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent This stepped-up basis can wipe out decades of built-in capital gains.
An example. A parent bought a home in 1990 for $80,000. It was worth $400,000 on the date of death. The heir’s basis becomes $400,000. Selling right away for $400,000 produces zero capital gains tax. Only appreciation after the date of death is taxable, and at the heir’s capital gains rate. The IRS also treats inherited assets as held long-term regardless of how long the beneficiary actually owns them.
Final Income Tax Returns the Executor Still Has to File
Even without a state estate tax, the decedent’s income tax obligations have to be closed out. There are two separate filings, and confusing them creates penalty exposure on both.
The Decedent’s Final Individual Return
Georgia Form 500 covers the decedent’s income from January 1 through the date of death. The executor or surviving spouse files it using the same filing status and due date as the federal return.9Georgia Department of Revenue. Deceased Taxpayers, Name Change and Other Related Information You’ll need the decedent’s Social Security number, records of wages, dividends, interest, and other income earned before death, and any Georgia withholding documentation. The state figures should match what’s reported on the federal Form 1040.
The Estate’s Fiduciary Return
If the estate itself earns income during administration, that is a separate filing. At the federal level, Form 1041 is required when the estate has gross income of $600 or more during the tax year.10Internal Revenue Service. 2025 Instructions for Form 1041 Georgia Form 501 is the state equivalent. This income usually comes from bank interest, dividends, rent on estate-owned property, or gains from assets sold during administration.
Before filing either return, the estate needs its own Employer Identification Number, separate from the decedent’s Social Security number. You can apply online through the IRS website, by fax, or by mail using Form SS-4.11Internal Revenue Service. File an Estate Tax Income Tax Return The online application is fastest and issues the EIN immediately.