Does Mississippi Have an Estate Tax?
While Mississippi repealed its estate tax, estates may still be subject to federal tax rules and have other important tax filing requirements to consider.
An estate tax is a tax imposed on the transfer of a person’s assets to their heirs and beneficiaries after their death. It is calculated based on the net value of the estate, which considers the fair market value of all assets like cash, real estate, and stocks, from which certain debts and administrative expenses are subtracted. This tax is paid directly from the estate’s funds before any assets are distributed.
Mississippi’s Estate and Inheritance Tax Status
Mississippi does not impose a state-level estate tax. This tax was officially eliminated for individuals who died on or after January 1, 2005. The repeal was the result of a phase-out process that aligned with changes in federal tax law, specifically the Economic Growth and Tax Relief Reconciliation Act of 2001, which gradually eliminated the federal credit for state death taxes.
In addition to having no estate tax, Mississippi also does not have an inheritance tax. An estate tax is levied on the total value of the decedent’s estate, and the payment is the responsibility of the estate itself. An inheritance tax, conversely, is paid by the individuals who receive the assets, known as beneficiaries or heirs.
The Federal Estate Tax for Mississippi Residents
While Mississippi does not have its own estate tax, its residents are still subject to the federal estate tax. This tax applies only to estates that exceed a high-value threshold set by the Internal Revenue Service (IRS). For 2025, the federal estate tax exemption is $13,990,000 per individual, and an estate’s value must surpass this amount before any federal tax is owed.
For those that do pay federal estate tax, the tax is calculated only on the value of the estate that exceeds the exemption amount, with a top tax rate of 40%. The executor of the estate is responsible for filing the federal estate tax return, IRS Form 706, if the gross estate’s value exceeds the filing threshold.
Other Potential Estate Related Taxes
Even without a state or federal estate tax liability, an estate may have other tax filing obligations. The executor must file a final individual income tax return for the decedent, using IRS Form 1040. This return reports all income the individual earned from the beginning of the year until their date of death and is due by April 15 of the year following the person’s death.
The estate itself may be required to file its own income tax return, known as a fiduciary return, using IRS Form 1041, U.S. Income Tax Return for Estates and Trusts. This filing is necessary if the estate generates more than $600 in gross income during its tax year. This can occur if assets held by the estate, such as investment accounts or rental properties, continue to produce income after the owner’s death but before the assets are distributed.