Maryland inheritance and estate tax
Maryland inheritance tax and estate tax: who pays, when it is due, and how to appeal.
Maryland has two death taxes. The inheritance tax is generally 10% of what passes to anyone outside the exempt family list, and the register of wills in each county determines and collects it. For a Maryland resident, or a nonresident with real estate or tangible property in Maryland, the estate tax return is required when the federal gross estate, plus adjusted taxable gifts and any property from a predeceased spouse's Maryland QTIP election, reaches $5,000,000, and the return and the tax are due to the Comptroller of Maryland 9 months after the date of death; an extension of time to file does not extend the time to pay. A register's inheritance tax determination, and a final assessment of Maryland estate tax, can be appealed to the Maryland Tax Court within 30 days after the notice is mailed.
Mr. Powell of the Law Office of Alexander Powell, PLLC handles Maryland inheritance tax and estate tax disputes for personal representatives and beneficiaries, and for the estates lawyers who represent them. He is admitted in Maryland and the District of Columbia and works from 1629 K Street NW, Suite 300 in Washington, DC.
Tax-General sections 7-201 to 7-225, 7-302 to 7-309, 13-510, 13-601, and 13-701 were checked on mgaleg.maryland.gov, the Register of Wills 2025 estate administration booklet on registers.maryland.gov, and the 2026 Form MET 1 on marylandcomptroller.gov on November 8, 2026. The notice in hand controls. This page is not legal advice.
The inheritance tax
Ten percent, outside the family list.
Maryland imposes an inheritance tax on the privilege of receiving property that passes from a decedent and has a taxable situs in the State. Under Tax-General section 7-204, the rate is 10% of the clear value of the property, which the statute defines as fair market value minus expenses. Section 7-203(b) exempts property that passes to the decedent's grandparents, parents, spouse, children and their descendants, the spouses of those children and descendants, and brothers and sisters, so the 10% tax generally falls on property that passes to anyone else.
Who pays Maryland inheritance tax?
The person who distributes the property, before it is distributed. Under Tax-General section 7-216(a), the inheritance tax on property that passes from a decedent shall be paid, before it is distributed, by the person who distributes the property, and that person is liable for the inheritance tax on the property distributed until the tax is paid. Under section 7-216(b), the recipient pays if the person who distributes the property does not, or if the property passes from the decedent to the recipient without distribution.
Which relatives are exempt from Maryland inheritance tax?
Section 7-203(b) exempts property that passes to a grandparent, a parent, a spouse, a child of the decedent or a lineal descendant of a child, a spouse of a child or of a lineal descendant of a child, the surviving spouse of a deceased child or descendant, if married to that child or descendant at death and not remarried, a brother or sister, and a corporation, partnership, or LLC owned only by those relatives. A child includes a stepchild or former stepchild, and a parent includes a stepparent or former stepparent. Section 7-203(l)(3) also exempts a domestic partner whose partnership is registered under section 2-214 of the Estates and Trusts Article.
Do nieces and nephews pay Maryland inheritance tax?
Generally yes, at 10%. Nieces, nephews, cousins, aunts, uncles, and friends are not on the exempt list in section 7-203(b), so property that passes to them is taxed at 10% unless another exemption applies, such as life insurance payable to them as named beneficiaries, or property that totals $1,000 or less for that person. Section 7-203(m) exempts real property subject to a perpetual conservation easement for farming purposes that passes to a niece or nephew, and the tax is recaptured if the property ceases to be used for farming purposes.
What else is exempt from Maryland inheritance tax?
Section 7-203 also exempts the proceeds of a life insurance policy payable to any beneficiary other than the estate of the insured, property that passes from a decedent to any 1 person if the total value of the property does not exceed $1,000, probate property distributed from an estate that qualifies for administration as a small estate, and income, including gains and losses, accrued on probate assets after the date of death. Gifts to qualifying charities are exempt under section 7-203(e). The Register of Wills says inheritance tax may be collected on non-probate property regardless of the type of estate proceeding, so jointly held and other non-probate property in a small estate can still be taxed.
Official source: Md. Code, Tax-General section 7-203
Official source: Md. Code, Tax-General section 7-204
Official source: Md. Code, Tax-General section 7-216
Official source: Register of Wills, Guide to Estate Administration (2025)
How the tax is set
From the Information Report to the register's bill.
Information Report
Under Tax-General section 7-224, within 3 months after the grant of letters of administration, the personal representative files with the register a report, under oath, that lists jointly held property and transfers that are taxable as property passing from the decedent. That includes, except for a bona fide sale for full value, a transfer of a material part of the decedent's property in the nature of a final disposition or distribution made within 2 years before death, unless it is shown not to have been made in contemplation of death.
When no estate is opened
Under section 7-225(d), when there is no formal administration, each person who receives property that passes from the decedent without distribution files the inventory within 3 months after the death, with the register where the decedent lived for personal property or where real property is located. The Register of Wills says an Application to Fix Tax on Non-Probate Assets shall be filed within 90 days after the decedent's death in that case.
Inventory and values
Under section 7-225(b), each personal representative files the inventory within 3 months after appointment, and under section 7-207 the value of property for inheritance tax is generally the appraised value stated in that inventory. Under section 7-209(a), a decedent's interest as a joint tenant is generally valued by dividing the value of the entire property by the number of joint tenants, including the decedent.
The register's determination
Under section 7-214(a), the register in the county where the court that administers the estate is located determines the inheritance tax due on property in the estate when the personal representative accounts for its distribution. Under section 7-214(b), when there is no formal administration, the register determines the tax and sends a tax bill to each person responsible for paying it.
Payment, or a payment schedule
Under section 7-218(b), the Comptroller may allow an alternative payment schedule for the inheritance tax, not exceeding a 5-year period, if payment of the tax on the due date would require the sale of a small business or an interest in one that passes from the decedent. Section 7-218(a) limits a small business to a firm that, among other tests, did not employ more than 25 individuals in its most recently completed fiscal year.
Appeal
Under section 13-510(a)(3), a person aggrieved by an inheritance tax determination of a register may appeal to the Maryland Tax Court within 30 days after the date on which the notice is mailed.
Official source: Md. Code, Tax-General section 7-224
Official source: Md. Code, Tax-General section 7-214
Official source: Md. Code, Tax-General section 7-218
Official source: Md. Code, Tax-General section 13-510
The Maryland estate tax.
Under Tax-General section 7-305, the person responsible for filing the federal estate tax return files a Maryland estate tax return with the Comptroller 9 months after the date of the death of a decedent, and the same duty applies when no federal return is required but one would be at the Maryland exclusion amount. Under section 7-306, the tax is paid to the Comptroller no later than 9 months after the date of death, and an extension of time to file the return does not extend the time for remitting the tax.
Under section 7-305(d), an amended Maryland return is required when the Maryland estate tax liability is increased, including by a change in the federal gross estate, federal taxable estate, or federal estate tax, and it is filed within 90 days after the later of the event that caused the increase or the date the filer learned or reasonably should have learned of it. Under section 13-601(d), interest on unpaid Maryland estate tax begins 9 months after the date of the death of a decedent.
Unless the will or other controlling instrument says otherwise, section 7-308 apportions the federal and Maryland estate taxes among the persons interested in the estate in proportion to the value of their interests, and section 7-308(c)(4) lets the court charge the fiduciary with assessed penalties and interest that are due to delay caused by the negligence of the fiduciary. Under section 7-307, the Comptroller may allow an alternative payment schedule for the Maryland estate tax, and a penalty for late payment may not be assessed on tax paid in accordance with that schedule.
Official source: Md. Code, Tax-General section 7-305
Official source: Md. Code, Tax-General section 7-309
Official source: Comptroller of Maryland, Form MET 1 and instructions
When I take on a Maryland inheritance tax or estate tax matter.
I handle Maryland inheritance tax and estate tax disputes when the amount turns on a contested point: the value of real estate or a business interest on the inventory, whether an account the decedent held jointly or a transfer made within 2 years before death is taxed, whether a recipient is on the exempt family list, how the estate tax is apportioned among the people who received property, interest and penalty on a late payment, and an appeal to the Maryland Tax Court within its 30 days.
Personal representatives, beneficiaries, and their estates lawyers can send the date of death, the county, the inventory and Information Report as filed, and the register's notice or the Comptroller's letter, with the date printed on it.
Maryland tax notices, liens, and Maryland Tax Court appeals on other Maryland taxes are covered on Maryland tax attorney and Comptroller of Maryland collections.
Questions
Common questions.
When is Maryland inheritance tax due?
Generally when the register determines the amount due. Under section 7-217(a), in an estate administered subject to the jurisdiction of a court, the tax is paid when the register determines the amount due, at the time that the personal representative accounts for the distribution of property of the estate; under section 7-217(b), in modified administration it is paid when the personal representative files the final report. The Register of Wills says inheritance tax on non-probate property is due when the Register of Wills assesses and bills for the amount based on the taxable property reported on the Information Report or the Application to Fix Inheritance Tax.
What happens if Maryland inheritance tax is paid late?
Interest runs, and a penalty of up to 10% is assessed. Under Tax-General section 13-601(c), interest on unpaid inheritance tax begins 30 days after the date on which the tax is determined or, if there is no formal administration of the estate and the tax is not paid within 30 days after the tax bill is mailed, on the original due date. Under section 13-701, the tax collector shall assess a penalty not exceeding 10% of the unpaid tax, and for inheritance tax the penalty may be assessed at or after the time allowed for the assessment of interest.
Can a Maryland inheritance tax determination be appealed?
Yes, to the Maryland Tax Court, within 30 days. Under Tax-General section 13-510(a), within 30 days after the date on which a notice is mailed, a person aggrieved by the action in the notice may appeal to the Tax Court from an inheritance tax determination by a register or by an orphans' court other than a circuit court sitting as an orphans' court, and from a denial of an alternative payment schedule for inheritance tax or Maryland estate tax. Section 13-510(c) treats the appeal as filed on time if a written petition is mailed to the Maryland Tax Court with a postmark date within the time allowed.
Does Maryland have an estate tax as well as an inheritance tax?
Yes. Section 7-302 imposes a tax on the transfer of the Maryland estate of a decedent who was a Maryland resident at death, or a nonresident whose estate includes real property permanently located in Maryland or tangible personal property with a taxable situs here. Under section 7-309(b)(3), the exclusion amount is $5,000,000 for a decedent dying on or after January 1, 2019, plus any deceased spousal unused exclusion amount. The Comptroller's Form MET 1 instructions say a Maryland estate tax return must be filed where the federal gross estate plus adjusted taxable gifts, plus property for which a Maryland QTIP election was previously made, equals or exceeds $5,000,000.
What is the Maryland estate tax rate?
Up to 16% of the taxable estate above $5,000,000. Section 7-309(b)(3)(iii) provides that the federal credit used to determine the Maryland estate tax may not exceed 16% of the amount by which the decedent's taxable estate exceeds $5,000,000, plus any deceased spousal unused exclusion amount, and Form MET 1 computes that figure on its line 9. Line 13 takes the gross Maryland estate tax liability as the lesser of that figure and the credit computations on lines 10 and 12, and line 15 subtracts Maryland inheritance tax paid, from line 14a, to reach the net Maryland estate tax.
Official source: Md. Code, Tax-General section 7-217
Official source: Md. Code, Tax-General section 13-601
Official source: Md. Code, Tax-General section 13-701
Official source: Md. Code, Tax-General section 7-302
Official source: Comptroller of Maryland, Form MET 1 and instructions
Related pages
Related Maryland tax resources.
- Maryland tax attorneyComptroller of Maryland disputes, notices, and Maryland Tax Court appeals.
- Comptroller of Maryland collectionsMaryland tax liens, levies, license holds, and payment plans.
- District of Columbia estate taxThe District zero bracket amount, OTR estate tax assessments, penalties, and the OAH protest.
- Federal tax lienRelease, withdrawal, discharge, and subordination.
- IRS AppealsReview of a federal tax dispute by the IRS Independent Office of Appeals.
- Practice areasFederal, District of Columbia, and Maryland tax controversy matters.
Send the date of death, the county, and any notice.
Say who received the property, how each person is related to the decedent, and whether an estate is open and in which county. Send only a high-level summary.
Requesting a consultation does not make Mr. Powell your lawyer, provide legal advice, or protect a deadline.
Law Office of Alexander Powell, PLLC. 1629 K Street NW, Suite 300, Washington, DC 20006.