State Estate Tax for Green Card Holders: The 2026 Guide to 12 States That Still Tax You

Quick answer: State estate tax for green card holders runs on a completely separate track from the federal one and it doesn’t care that your federal exemption is $15 million in 2026. Twelve states plus DC still run their own estate tax, with exemptions as low as $1 million in Oregon and $2 million in Massachusetts.

Whether you owe depends on a state specific domicile test that has nothing to do with your immigration status, your federal domicile, or even your state income tax residency it’s a third, independent test. Washington’s top rate just swung from 35% to 20% depending on the exact date of death. New York erases its entire exemption if you cross one threshold by even a dollar. This guide breaks every state down, with the traps specific to green card holders and long term visa holders.

State estate tax for green card holders is the trap almost nobody plans for, because almost everything written about U.S. estate tax stops at the federal level. If you’ve read our guide to federal estate tax for green card holders, you already know the headline number: a $15,000,000 exemption for U.S. domiciliaries in 2026, versus roughly $60,000 for a nonresident alien. What almost nothing tells you is that winning the federal domicile argument proving you’re not a U.S. domiciliary, the way our earlier worked example did doesn’t touch your exposure to a state estate tax. States run their own rules, on their own thresholds, using their own definition of “resident.”

Why Your Federal Exemption Doesn’t Save You Here

Federal estate tax domicile is a subjective intent test Treasury Regulation §20.0-1 defines it as the place you’ve made your permanent home, with no present intention of leaving. That’s a different test from federal income tax residency under IRC §7701(b), which is largely mechanical (green card test or the Substantial Presence Test’s day count). A green card holder can, in theory, be a U.S. income tax resident every year they hold the card while still arguing they never became U.S. domiciled for estate tax purposes that’s the whole premise behind the domicile planning strategies discussed in our federal guide.

States don’t care about either of those federal tests. Each state that imposes an estate tax has written its own statutory definition of “resident” or “domiciliary,” and none of them reference immigration status, visa category, or federal estate tax domicile at all. That means three independent tests can produce three different answers for the same person in the same year:

• Federal income tax residency (mechanical, IRC §7701(b))
• Federal estate tax domicile (subjective intent, Treas. Reg. §20.0-1)
• State estate tax domicile (subjective intent, defined separately by each state)

Washington’s statute (RCW 83.100.020(12)) defines a “resident” as a decedent domiciled in the state at death, decided through a multi factor analysis location of family, business ties, voter registration, driver’s license with no bright line day count and no reference to visa or citizenship status. New York (Tax Law §952(a)) works the same way: domicile is a common law “true, fixed, and permanent home” test, applied identically to citizens, green card holders, and visa holders alike. In other words: a reader can successfully argue no federal domicile the exact scenario in our federal guide’s Nepali H-1B example and still owe estate tax to Massachusetts or New York, because that state has independently decided they never left.

Which States Still Have an Estate Tax in 2026

Twelve states plus the District of Columbia impose their own estate tax, separate from the federal one. Thresholds run far below the federal $15,000,000 exemption in Oregon’s case, fifteen times lower.

*Washington’s top rate depends on the exact date of death in 2026 see below.

States With an Inheritance Tax Instead

Five states skip the estate tax and tax the heir instead, at a rate that depends entirely on how closely they were related to the decedent.

Pennsylvania is the outlier worth flagging: unlike every other inheritance tax state, it does not exempt children or other lineal descendants. They pay 4.5% on the full value they inherit, with no dollar exemption at all a distinctive feature that gets glossed over in a lot of generic coverage of this topic.

Iowa’s inheritance tax was fully repealed for deaths after January 1, 2025, and no longer applies to 2026 decedents.

Maryland: The Only State With Both

Maryland is the single state in the country that layers an estate tax on top of an inheritance tax. Its estate tax exemption is $5,000,000, fixed since 2019 and not indexed for inflation, with a 16% top rate. Separately, its inheritance tax takes 10% flat from any beneficiary who isn’t a spouse, child, parent, grandparent, or sibling. Maryland prevents true double taxation between the two: inheritance tax actually paid by the estate generates a dollar-for dollar credit against the Maryland estate tax owed. Maryland is also one of only two states alongside Hawaii that allows spousal portability, letting a married couple shield up to $10,000,000 combined.

For a green card holder settled in the Baltimore DC corridor, this means an estate worth $5–15 million sits in a genuine blind spot: no federal estate tax exposure at all, but real Maryland exposure that a federal only estate plan will completely miss.

Washington’s Estate Tax Rollercoaster

Washington has had four different estate tax regimes since mid 2025, and which one applies to a given estate depends on the exact date of death:

• Before July 1, 2025: $2,193,000 exemption (frozen since 2018), rates 10%–20%.
• July 1 Dec. 31, 2025: Exemption raised to $3,000,000 and the top rate jumped to 35% the highest state estate tax rate in the country under SB 5813.
• Jan. 1 Jun. 30, 2026: Exemption indexed up to $3,076,000; the 35% top rate still applies.
• On or after July 1, 2026: Under ESB 6347, signed by Gov. Bob Ferguson on March 24, 2026, the top rate drops back to 20%, and the exemption resets to a flat $3,000,000. Because the bill re-references a discontinued regional CPI index for future adjustments, that $3,000,000 figure is effectively frozen going forward the same mechanism that kept the old exemption stuck at $2,193,000 for years after 2018.

The practical effect: for a $10 million Washington estate, the difference between dying on June 30, 2026, and dying on July 1, 2026, is roughly $210,000 in state estate tax purely a function of timing, not planning.

New York’s 105% Cliff

New York’s 2026 basic exclusion amount is $7,350,000, up from $7,160,000 in 2025. Below that figure, no New York estate tax is owed at all. Between $7,350,000 and 105% of that amount ($7,717,500), New York taxes only the portion above $7,350,000 ordinary, marginal treatment. Cross $7,717,500, though, and the exemption disappears entirely: New York taxes the whole estate from the first dollar, not just the amount above the threshold. There’s no portability to soften this for a surviving spouse. For an estate hovering near that 105% line, careful planning directing the excess to a spouse or charity is the difference between owing nothing and owing tax on the entire estate.

Massachusetts: Cliff Gone, But Watch Your Property Back Home

Massachusetts eliminated its old “cliff” where crossing the threshold by even a dollar taxed the entire estate through H.4104 in 2023, retroactive to deaths on or after January 1, 2023. The exemption is now $2,000,000, and instead of a cliff, the state applies a flat $99,600 credit against the computed tax, so only the amount above $2,000,000 is effectively taxed. A second, separate fix followed in September 2024, and it’s the one that actually matters for this audience. In Dassori v. Commissioner of Revenue (Middlesex Probate and Family Court, 2016), a Massachusetts resident estate successfully argued that an apartment in Paris, held through a French entity, shouldn’t be swept into the Massachusetts taxable estate.

For years afterward, practitioners relied on that case informally, while the actual statute still technically required including out of state property. In September 2024, Massachusetts amended G.L. c. 65C §2A to formally exclude real and tangible personal property located outside Massachusetts anywhere, including abroad from a Massachusetts resident’s taxable estate, retroactive to January 1, 2023.

For a green card holder domiciled in Massachusetts who still owns a home or land back in their country of origin, this is genuinely good news that most coverage of the 2023 reform never mentions: that property no longer counts toward the Massachusetts estate tax calculation at all.

Two Worked Examples

Massachusetts, with property back home. A green card holder domiciled in Massachusetts dies owning $1,900,000 in Massachusetts based assets home, retirement accounts, brokerage plus a $1,000,000 property in their home country. Before the 2024 fix, the full $2,900,000 risked being treated as part of the Massachusetts taxable estate, well past the $2,000,000 exemption. After the fix, the foreign property is excluded. The Massachusetts taxable estate is $1,900,000 under the $2,000,000 exemption, meaning no Massachusetts estate tax return is even required.

Washington, timing alone. A Seattle area green card holder’s estate is worth $10,000,000. If they die on June 30, 2026, the estate falls under the 35% top rate regime. If they die the next day, July 1, 2026, the 20% top rate applies instead. The difference in Washington estate tax between those two dates is roughly $210,000 nothing about the estate itself changed.

How This Interacts With Your Federal Return

Before 2005, federal law gave a dollar for dollar credit against federal estate tax for state death taxes actually paid, under former IRC §2011. The Economic Growth and Tax Relief Reconciliation Act of 2001 phased that credit out between 2002 and 2004 and replaced it entirely, for deaths in 2005 and later, with an itemized deduction under IRC §2058.

The difference matters: a credit offset federal tax dollar for dollar, while a deduction only reduces the taxable estate before the federal rate is applied worth at most 40 cents on the dollar at the top federal bracket. That single change is why many states either let their estate tax quietly disappear after 2005, or decoupled from the federal code entirely and built their own standalone exemption schedules which is why the 12 states above now look nothing alike.

What Most State Estate Tax Guides Get Wrong

• They miss Washington’s 2026 rollback entirely. A rate change signed into law in March 2026 hasn’t made it into most existing content yet.
• They can’t agree on Maryland. Some guides describe it as inheritance tax only; it isn’t Maryland runs both an estate tax and an inheritance tax, with a credit between them.
• They still describe a Massachusetts “cliff.” That was repealed for deaths starting January 1, 2023.
• They never mention the 2024 Massachusetts fix for out of state property a direct, practical win for anyone who still owns property in their home country.
• They treat “resident” as one test. None address the fact that federal income tax residency, federal estate tax domicile, and state estate tax domicile are three separate, independently determined tests that can point in three different directions for the same person.

Frequently Asked Questions

Does Having a Green Card Automatically Trigger State Estate Tax for Green Card Holders?

No, Having a green card does not automatically trigger state estate tax for green card holders.State estate tax is based on whether you are considered domiciled in that specific state at the time of your death not on your immigration status. Each state uses its own definition of “resident” or “domicile,” which generally looks at factors like:

• Where your permanent home is located
• Where your family lives
• Driver’s license, voter registration, and banking ties
• Overall intent to remain in the state

A green card is strong evidence of intent to stay in the United States, but it does not automatically make you domiciled in any particular state for estate tax purposes. Many green card holders successfully maintain domicile in a no estate tax state (such as Florida, Nevada, or Texas) while living and working in the U.S.However, if a state determines you were domiciled there when you passed away, its estate tax rules will apply regardless of your green card or federal estate tax domicile status.

Does having a green card mean I automatically owe state estate tax?

No, A state estate tax applies based on that state’s own domicile test generally physical presence plus intent to remain not your immigration status. A green card is strong evidence of intent to remain in the U.S., but it isn’t automatically decisive for any individual state’s estate tax.

Do all states have a state estate tax?

No, Only 12 states plus the District of Columbia impose an estate tax as of 2026: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and DC. Five more states Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania impose an inheritance tax instead, which taxes the heir rather than the estate.

Which state has the lowest state estate tax exemption in 2026?

Oregon, at $1,000,000, unchanged since 2012. Massachusetts is next at $2,000,000. Both are far below the federal exemption of $15,000,000.

Is Washington’s estate tax rate 35% or 20% in 2026?

Both, depending on date of death. Estates of decedents who died between July 1, 2025, and June 30, 2026, face a 35% top rate. For deaths on or after July 1, 2026, under ESB 6347, the top rate drops to 20% and the exemption resets to a flat $3,000,000.

Does Maryland tax both my estate and my heirs?

Yes, Maryland is the only state that runs both an estate tax ($5,000,000 exemption, 16% top rate) and an inheritance tax (10% flat on non exempt beneficiaries). Inheritance tax paid credits against the estate tax owed, so the two don’t simply stack on top of each other.

Does property I still own in my home country count toward my state estate tax?

It depends on the state, Massachusetts now formally excludes real and tangible personal property located outside the state including abroad from a Massachusetts resident’s taxable estate, following a 2024 statutory fix. Other states’ treatment of foreign property varies and should be checked individually before assuming the same rule applies.

Related Reading

• Federal Estate Tax for Green Card Holders
• Gift Tax for Green Card Holders
• Taxes for Green Card Holders: The Master Guide
• Taxes for Green Card Holders Living Abroad
• State Income Tax for Immigrants (a different test than state estate tax domicile don’t conflate the two)
• Exit Tax for Green Card Holders

Sources

• IRC §2010(c) federal basic exclusion amount: law.cornell.edu/uscode/text/26/2010
• IRC §2058 state death tax deduction: law.cornell.edu/uscode/text/26/2058
• Treas. Reg. §20.0-1 federal estate tax domicile definition
• Rev. Proc. 2025-32 2026 inflation adjustments: irs.gov/pub/irs drop/rp 25 32.pdf
• Washington ESB 6347 official bill history: app.leg.wa.gov/billsummary
• N.Y. Tax Law §952(a); RCW 83.100.020(12); M.G.L. c. 65C §1(i) and §2A
• Dassori v. Commissioner of Revenue, Middlesex Probate and Family Court, Docket No. MI14E0042QC (June 30, 2016)

Disclaimer:

This article is provided for general informational and educational purposes only. It does not constitute tax, legal, financial, or professional advice of any kind.Tax laws, estate tax regulations, and domicile rules are complex and frequently change.

The information contained in this article reflects general rules and interpretations as of 2026 and may not be applicable to your individual circumstances, particularly as they relate to immigration status, cross border assets, or international tax treaties.

honestmoneyadvice.com and its authors, contributors, and publishers expressly disclaim all liability for any errors, omissions, or inaccuracies in this content. We are not responsible for any loss, damage, or consequence (whether direct, indirect, incidental, or consequential) that may arise from the use of, or reliance upon, any information presented in this article.

This content is not a substitute for personalized advice. Readers, especially green card holders, non U.S. citizens and individuals with assets in the United States or Europe, should consult with a qualified tax advisor, estate planning attorney, or certified public accountant licensed in the relevant jurisdiction(s) before making any decisions regarding estate planning, taxation, or domicile matters. No attorney client or advisor client relationship is formed by reading this article.