Is There a Michigan Estate Tax?
There is no estate tax in Michigan. Michigan is one of 38 states that have no estate tax. No matter the size of your estate, you won’t owe money to the Wolverine State. You might owe taxes to the federal government through the federal estate tax, depending on the size of your estate.
Even though there is no Michigan estate tax, you might still owe the federal estate tax. The exemption for that tax is $11.70 million in 2021 and $12.06 million in 2022. This tax is portable for married couples, meaning that with the right legal moves a married couple can protect up to $24.12 million when both spouses have died.
What Is The Estate Tax?
The estate tax is applied to the estate of a recently deceased person after they die but before the money is passed on to their heirs. It is sometimes referred to as the “death tax.”
The estate tax is not to be confused with the inheritance tax. That tax is applied to a person’s heirs after they have already received their inheritance.
Does Michigan Have an Inheritance Tax and Gift Tax?
Like the majority of states, Michigan does not have an inheritance tax. If you stand to inherit money in Michigan, you should still make sure to check the laws in the state where the person you are inheriting from lives. In Pennsylvania, for example, the inheritance tax can apply to heirs who live out of state if the descendant lives in the state.
Michigan also has no gift tax. The federal gift tax exemption is $15,000 per recipient per year in 2021 and $16,000 in 2022
TIPS:
- Estate planning, in Michigan or elsewhere, takes time and knowledge. If you need some help, you should consider reaching out to ATS Advisors. We are professionals in this matter and are here to help!