2018 Changes to Federal, Maryland and D.C. Estate Tax Laws

The Tax Cuts and Jobs Act markedly altered prior law relating to the taxation of corporations and individuals. This includes changes to the gift, estate, and generations-skipping tax (GST) provisions. Under the federal law, unmarried individuals may exempt up to $11.2 million from federal gift and estate tax. Married couples may exclude double this amount, as long as the surviving spouse files a timely estate tax return electing portability. The marginal tax rate for estates that exceed the threshold exclusion amounts remains at 40%.

In Maryland, the estate tax exemption increases to $4 million in 2018. The marks a massive jump from the $1 million exclusion allowed in 2017. After 2019, Maryland’s exclusion thresholds will mirror the federal limits. Until 2019, the portability election for spouses is not available. In 2007, Virginia repealed its estate tax and continues to have neither a gift nor the estate tax. The District of Columbia’s (DC) estate tax exemption now matches the federal exemptions except for the portability election for spouses. Like Virginia and Maryland, DC has no gift tax.

See 2018 Changes to Federal, Maryland and D.C. Estate Tax Laws, Whiteford, Taylor, & Preston, LLP, January 9, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.