Florida has no estate tax and no inheritance tax. Article VII, Section 5(a) of the Florida Constitution limits any such tax on residents to the credit allowed against federal tax, and the Department of Revenue says a federal change eliminated Florida estate tax for deaths after December 31, 2004. Federal estate tax can still apply to very large estates.
One of the first questions families ask after a death, or when planning ahead, is whether Florida will tax the estate. The short answer is no. Florida has no state estate tax and no inheritance tax. But that is not the whole story, because federal estate tax still exists and some inherited assets carry income tax. This guide explains why Florida does not tax estates and what taxes heirs may still face.
Why doesn't Florida have an estate tax?
The reason starts in the Florida Constitution. Article VII, Section 5(a) provides that no tax upon estates or inheritances of natural persons who are residents or citizens of the state may be levied beyond the amount that can be credited or deducted against similar taxes imposed by the United States or another state.
For decades, federal law gave estates a credit for state death taxes. Florida's estate tax statute was built around that credit. Under section 198.02 of the Florida Statutes, the tax on a resident's estate is measured by the federal credit for state death taxes, reduced by death taxes paid to other states. In effect, Florida collected a share of the federal tax rather than adding a separate tax on top.
Then federal law changed. According to the Florida Department of Revenue, a federal change eliminated Florida's estate tax for people who died after December 31, 2004. With no federal credit to measure it by, the Florida tax produces nothing, and the Constitution prevents the Legislature from imposing a separate one on residents.
Is there an inheritance tax in Florida?
No. The same constitutional provision limits taxes on inheritances, and Florida does not impose one. An heir who receives property from a Florida resident does not pay a Florida tax simply because they inherited it. Heirs who live in another state should check their own state's rules, since a few states do tax inheritances.
Do personal representatives still file Florida estate tax forms?
Generally not anymore. The Department of Revenue states that, starting July 1, 2023, personal representatives do not have to file Form DR-312 (Affidavit of No Florida Estate Tax Due) or Form DR-313. Those forms were once used to show that no Florida estate tax was owed and to clear the state's lien on property. If you are handling an estate and an older checklist mentions them, ask your attorney whether anything is still needed.
When does federal estate tax apply?
Federal estate tax applies only to estates above a federal exemption amount, which is set by Congress and has changed many times. We do not quote the figure here because it changes and because what counts toward it depends on your circumstances. Most Florida estates fall well below it. If your estate, including life insurance, retirement accounts and real estate, may be large, it is worth raising at your consultation so your plan can account for it.
Federal gift tax works alongside the estate tax. Large lifetime gifts can use up part of the same exemption. The Florida Bar notes that transfers into an irrevocable trust are often treated as gifts, which is one reason our post on revocable vs irrevocable trusts recommends tax advice before funding one.
What other taxes do families ask about?
- Income tax on inherited retirement accounts. Withdrawals from an inherited traditional IRA or 401(k) are generally taxable income to the beneficiary under federal law, and federal rules control how quickly the account must be emptied. Roth accounts are treated differently. A tax professional can explain the rules for your account.
- Income earned after death. Income the estate or a trust earns after the death, such as interest or rent, may require federal fiduciary income tax returns.
- The final income tax return. The person who died may still owe a final federal income tax return for the year of death.
- Property taxes. County property taxes continue. A homestead exemption ends when the owner no longer qualifies, and new owners must apply for their own. Our post on the Florida homestead exemption explains how it works.
- Documentary stamp tax. Some deeds carry Florida documentary stamp tax. The Department of Revenue concluded in TAA 20B4-004 that it was not due on the lady bird deed it reviewed.
Does moving to Florida help with estate taxes?
For people coming from a state with its own estate or inheritance tax, becoming a Florida resident can matter. Residency depends on facts such as where you live, vote, hold a driver license and file a homestead declaration. If you still own real estate in your former state, that state may be able to tax it. A move is a good time to review your whole plan, including your will and any trust, under Florida law.
What tax records should a personal representative gather?
Even with no Florida estate tax, a personal representative or trustee has tax housekeeping to do. It usually helps to gather the person's last few years of income tax returns, year end statements for every account, beneficiary designation confirmations, deeds and closing statements for real estate, and records of any large lifetime gifts. Those documents answer the questions that come up most: whether a federal estate tax return is needed, what income the estate earned after death, and what the tax basis of inherited property is. Coordinating early with the estate's accountant avoids missed deadlines on the federal side.
How estate planning still helps without a state tax
- Avoiding probate. Tax is not the only cost of settling an estate. A trust or other tools can reduce court involvement; see how to avoid probate in Florida.
- Planning for incapacity. A durable power of attorney and health care documents matter regardless of taxes.
- Protecting your home. Florida homestead law affects who can inherit your home.
- Federal planning for large estates. If federal estate tax may apply, we coordinate with your tax advisor.
Families in Hillsborough County and across our service areas can schedule a free consultation. Our Florida estate planning page shows the documents most plans include.
David Cannady is the founding partner of Cannady & Associates. A former Florida prosecutor, he was admitted to The Florida Bar in 2014 and earned his J.D. at Florida State University College of Law.
This article is general information about Florida law, not legal advice for your situation. Laws change; talk to a lawyer about your facts.
