Federal inheritance tax is collected by the Internal Revenue Service and deposited with the U.S. Treasury, according to the IRS. In addition to federal taxes, seven states imposed inheritance taxes in 2015, which pay into their respective treasuries. The laws governing such taxes vary by jurisdictio
To claim an inheritance, contact the executor of the will or the judge in charge of the case. They make sure that you receive your money and any other paperwork you need, such as a deed or title if you are inheriting property.
TurboTax reports that as of tax year 2013, only eight states require beneficiaries to pay an inheritance tax: Iowa, Pennsylvania, Kentucky, Nebraska, Maryland, Indiana, Tennessee and New Jersey. For tax purposes, unless the inheritance, such as property or stocks, generates an income, the inheritanc
Inherited money from a trust may or may not be subject to income tax, depending on the source of the funds. Property or money held by the decedent at the time of death is an inheritance and would not be subject to income tax, according to IRS Publication 559.
The requirement to pay taxes on inherited money depends on the amount that's inherited and on the beneficiary's state of residence. The federal government doesn't charge beneficiaries an inheritance tax, although some states levy a tax, according to TurboTax.
Account holders who are 59 1/2 years and older or those experiencing a unique circumstance such as financial hardship may receive distributions from a 401(k) plan without penalty or with limited penalties, according to the Internal Revenue Service. Other account owners may withdraw distributions but
Call the telephone number listed on the notice issued by the Internal Revenue Service to determine if a balance is owed, explains the IRS. As of 2015, contact the IRS at 800-829-1040 if a notice is unavailable. Alternatively, an account transcript is available online for no charge at IRS.gov.
The IRS Tax Help Line for individual taxpayers, available at 1-800-829-1040, provides information about prior-year tax returns and any account balances due to the IRS. This line is designed for taxpayers who submitted a Form 1040 return.
The IRS does not currently have laws or rules regarding inheritance tax as of 2015, Nolo explains. Only six states impose an inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.
As of 2012, an inheritance is not considered income unless the amount received is greater than $5 million. The IRS states that inheritances do not have to be claimed as income, and there is no estate tax for the recipient. The estate of the deceased may be subject to both the estate tax and federal