No, in almost every case spouses do not pay inheritance tax. Federal law lets a deceased person leave any amount of property to a surviving spouse without owing estate tax, and each of the few states that still impose an inheritance tax exempts surviving spouses entirely. The main exceptions involve surviving spouses who are not U.S. citizens, and a paperwork step that can save the surviving spouse’s own heirs millions later.
The Federal Rule: An Unlimited Marital Deduction
Federal law lets a decedent transfer an unlimited amount of property to a surviving spouse free of federal estate tax.1Office of the Law Revision Counsel. 26 USC 2056 – Bequests to Surviving Spouse There is no cap. An estate worth tens of millions of dollars can shift entirely to a surviving spouse without a cent going to the IRS at the first death. The idea behind the rule is that a married couple functions as one economic unit, so the tax is simply deferred until the survivor eventually dies.
The deduction covers property that passes by will, through a trust, by joint tenancy with right of survivorship, through life insurance proceeds, and by most other transfer methods.1Office of the Law Revision Counsel. 26 USC 2056 – Bequests to Surviving Spouse The rule limits certain “terminable interests” where the spouse’s ownership would end and the property would pass to someone else, but common estate plans generally fit inside the exceptions.
State Inheritance Tax: Spouses Are Exempt
A handful of states still impose an inheritance tax, which is a tax on the person receiving property rather than on the estate. Only five states currently maintain one. In every one of them, surviving spouses are exempt. Rates for other beneficiaries can run from 1% to 16% depending on the state and the relationship to the decedent, but the rate for a surviving spouse is zero across the board.
Some of those states still ask for a return that formally claims the exemption, even though no payment is due. If you inherit property in a state that levies an inheritance tax, check with the state revenue department for the specific form and deadline.
When You Still Need to File Something
Owing no tax is not the same as filing nothing. Even when the marital deduction wipes out any tax, filing Form 706 can protect the surviving spouse’s future estate.
Each person has a separate federal estate tax exemption. For decedents dying in 2026, that basic exclusion amount is $15,000,000 per person. Because the marital deduction eliminated the tax on what you inherited, your late spouse’s $15 million exemption typically sits unused. Filing Form 706 lets the estate elect to transfer that unused amount, called the deceased spousal unused exclusion (DSUE), to you.2Internal Revenue Service. Frequently Asked Questions on Estate Taxes Combined with your own exemption, you could eventually shelter up to $30 million from estate tax when you pass.
Portability is not automatic. You have to elect it on Form 706, even if the estate owes nothing.2Internal Revenue Service. Frequently Asked Questions on Estate Taxes The regular deadline is nine months from the date of death, extendable by six months on Form 4768.3Internal Revenue Service. Instructions for Form 706 An executor who was not otherwise required to file can still elect portability up to five years after the decedent’s death.4Internal Revenue Service. Instructions for Form 706 Miss that window and the unused exemption is gone for good, which can cost the surviving spouse’s heirs millions later.
Filing is separately required, regardless of portability, when the gross estate plus lifetime taxable gifts exceeds $15,000,000 for a 2026 decedent.2Internal Revenue Service. Frequently Asked Questions on Estate Taxes
The Big Exception: Non-Citizen Surviving Spouses
The unlimited marital deduction does not apply if the surviving spouse is not a U.S. citizen.1Office of the Law Revision Counsel. 26 USC 2056 – Bequests to Surviving Spouse Without it, the estate would owe federal estate tax on anything above the $15 million basic exclusion, potentially at a 40% rate. Congress limits the deduction here so that assets do not leave U.S. tax jurisdiction before the government can collect. Green card status does not fix this; citizenship is what the statute requires.
The Qualified Domestic Trust (QDOT)
The way to preserve the marital deduction for a non-citizen spouse is a Qualified Domestic Trust, or QDOT.5Office of the Law Revision Counsel. 26 USC 2056 – Bequests to Surviving Spouse Assets go into the trust, the surviving spouse receives income from it during their lifetime, and estate tax is deferred until principal is distributed or the spouse dies. At least one trustee must be a U.S. citizen or a domestic corporation, and that trustee must have the right to withhold estate tax from any non-income distributions.6Office of the Law Revision Counsel. 26 USC 2056A – Qualified Domestic Trust
Timing is unforgiving. Assets must be transferred to the QDOT, or irrevocably assigned to it in writing, by the time the estate tax return is filed.7eCFR. 26 CFR 20.2056A-4 – Procedures for Conforming Marital Trusts and Nontrust Marital Transfers to QDOT Requirements Miss that and the marital deduction is permanently lost.
Step-Up in Basis: A Separate Tax Break
Beyond avoiding estate tax, inheriting from a spouse resets the income-tax basis of the property to its fair market value on the date of death.8Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If your spouse bought stock for $50,000 and it was worth $200,000 at death, your basis is $200,000. Sell it right away and there is no capital gains tax.
For jointly owned property, how much basis resets depends on state law. In separate-property states, only the decedent’s half of a jointly held asset gets the step-up. Your half keeps its original cost basis. In community-property states, both halves of community property receive the step-up, which can wipe out the capital gains built up over decades of marriage on a single asset.9Internal Revenue Service. Publication 555 – Community Property
The Short Version
If you are a U.S. citizen and your spouse leaves you property, you almost certainly owe no inheritance tax and no federal estate tax, no matter the size of the estate. Check whether your state levies an inheritance tax and, if so, whether it wants a return to formalize your exemption. Talk with the executor about filing Form 706 to lock in portability of your late spouse’s unused exemption, even though nothing is owed today. And if either spouse is not a U.S. citizen, get advice on a QDOT well before the estate tax return deadline, because that door closes fast.