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Criminal, Family and Probate Law


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Does Alabama have an estate tax?

On Behalf of | Apr 5, 2022 | Probate

You may have heard the phrase once or twice before: There are only two certainties in life, and those are death and taxes. Unfortunately, in many states, the two go hand-in-hand — when an individual dies, the estate becomes subject to certain taxes at the state or federal level.

Two taxes are more common at death than others. Those include inheritance taxes and estate taxes. As an Alabama resident, you may wonder if you should plan for one or both. SmartAsset explains the state’s death taxes so that you can prepare your estate accordingly.

Inheritance and estate taxes in Alabama

Alabama is one of many states that have done away with estate and inheritance taxes. Whether a loved one’s estate is currently going through probate or you are in the midst of estate planning, you can rest assured that no portion of the estate’s assets will go to the IRS.

Other financial considerations

While it is good news that Alabama does not charge any death taxes, you must still meet specific filing requirements. SmartAsset explains the top three filing requirements you must make after a loved one passes away:

  • File the deceased individual’s state and federal tax returns by the regular filing deadline the following year.
  • File a federal trust/estate tax return by April 15 of the year following the death.
  • File a federal estate tax return within nine months of your loved one’s death.

You may request a six-month extension for the final requirement if you do so before the nine-month period expires. You only need to file a federal estate tax return if the value of the deceased’s taxable estate exceeds $12.06 million, or $24.12 million for couples.

Whether you are planning your own estate or going through the probate process following a loved one’s death, it is important to understand the financial implications associated with death. With sufficient knowledge, you can plan your estate or proceed with probate with confidence.