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Frequently Asked Questions about Estate and Inheritance Tax

8 - What if Maryland inheritance and estate taxes are both due? Isn't that double taxation?

The inheritance tax paid to the Register of Wills is subtracted from the gross Maryland estate tax liability and the difference is the Maryland estate tax due. If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due.

However, the Maryland estate tax is owed and due until the inheritance tax is actually paid. If the amount of inheritance tax paid to the Register of Wills on or before the due date of the Maryland estate tax return is less than the gross Maryland estate tax liability, interest and/or penalty will be assessed on the outstanding liability. Interest will continue to accrue until the inheritance tax paid equals or exceeds the outstanding estate tax liability. See Comptroller of the Treasury v. Jameson, 332 Md. 723, 633 A.2d 93 (1993). For example, Estate owes $150,000 of estate tax, due by the nine (9) month statutory due date of January 1, 2014. Estate made two $75,000 payments of inheritance tax, one on December 1, 2013, and one on February 1, 2014. Because only $75,000 was paid by the estate tax due date, interest will be due on the remaining $75,000 from January 1, 2014 through February 1, 2014 when the amount of inheritance tax paid to the Register of Wills equaled the Maryland estate tax liability.

Links for Estate-Inheritance-Fiduciary Tax FAQs
Taxpayer Assistance
Frequently Asked Questions
Individual Tax FAQs
Estate-Inheritance-Fiduciary Tax FAQs
  q1 - What is the Maryland estate tax? What is the tax rate?
  q2 - Who is responsible for filing the Maryland estate tax return?
  q3 - What are the requirements for filing a Maryland estate tax return?
  q4 - How do I file the Maryland estate tax return? And when?
  q5 - Can I get an extension to file the Maryland return or pay the Maryland estate tax?
  q6 - What legislative changes affect the Maryland estate tax?
  q7 - What about the inheritance tax?
  q8 - What if Maryland inheritance and estate taxes are both due? Isn't that double taxation?
  q9 - Are there interest or penalty charges for late payment of the tax?
  q10 - Can I get a refund if I overpay?
  q11 - What are fiduciaries and must they file fiduciary tax returns?
  q12 - How are personal representatives affected by state income tax?
  q13 - If I open and close the estate in the same year, am I required to file a Maryland income tax fiduciary return?
  q14 - What Maryland forms are needed to meet these fiduciary filing requirements?
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