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Estate Taxes by State - Understanding North Carolina Estate Taxes

how much is north carolina state tax

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North Carolina is another state that has decoupled its estate tax laws from the federal estate tax laws. What this means for North Carolina residents and nonresidents who own real estate or tangible personal property located in North Carolina is the following:

  • While North Carolina has decoupled from the federal estate tax laws, it exempts the same amount of the estate from taxation as the federal law allows. This means that the first $3,500,000 of an estate is exempt from North Carolina estate taxes in 2009 .
  • A North Carolina Estate Tax Return, Form A-101, is required to be filed if a federal estate tax return, IRS Form 706, is required to be filed.
  • Form A-101

    must be filed with the North Carolina Department of Revenue at the same time IRS Form 706 is due, which is nine months from the decedent's date of death.

  • For decedents dying on or after January 1, 2005, the North Carolina estate tax is equal to the state death tax credit that was allowable under section 2011 of the Internal Revenue Code as it existed prior to 2002. This makes the tax rate a progressive one that maxes out at 16% for the amount above $10,040,000.

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  • An inheritance and estate tax waiver, Form A-105, needs to be obtained from the Department of Revenue before ownership of a decedent's real property can be transferred to the estate beneficiaries.

Category: Taxes

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