Is There an Estate Tax in Florida? What You Should Know

Estate tax, sometimes referred to as the “death tax,” is a levy imposed on the total value of a person’s assets at the time of their passing. This tax applies before assets are distributed to heirs. Many wonder if states, like Florida, impose their own version of this tax, in addition to federal obligations.

Florida’s Estate Tax Stance

Florida does not impose a state-level estate tax. The state’s estate tax was effectively eliminated for deaths occurring after December 31, 2004. Historically, Florida had a “pick-up” estate tax, tied directly to a credit allowed against the federal estate tax. When federal law changed, converting this credit into a deduction, Florida’s state estate tax became obsolete. Although the state’s estate tax statutes technically remain in law, they do not apply as long as federal law does not allow for a state death tax credit.

Federal Estate Tax Overview for Florida Residents

While Florida does not have its own estate tax, the federal estate tax can still apply to its residents’ estates. This tax is levied on the transfer of property at death, specifically on the value of a deceased individual’s “gross estate.”

A gross estate includes all property the decedent owned at death, such as cash, real estate, stocks, bonds, business interests, and life insurance proceeds. Certain deductions are allowed from this gross estate, including debts, funeral expenses, administrative costs, and property passing to a surviving spouse or qualified charities. The remaining value forms the “taxable estate.”

Federal Estate Tax Exemption and Portability Rules

The federal estate tax does not apply to all estates, as there is a significant exemption amount. For individuals passing away in 2025, the federal estate tax exemption is $13.99 million. This means an estate must exceed this amount to be subject to federal estate tax. Married couples can effectively combine their exemptions, allowing for a total exclusion of $27.98 million in 2025.

A valuable provision for married couples is “portability,” which allows a surviving spouse to utilize any unused federal estate tax exemption of their deceased spouse. To elect portability, the executor of the deceased spouse’s estate must file a federal estate tax return (IRS Form 706). This return must be filed within nine months of the decedent’s death, though a six-month extension is available.

Understanding Estate Planning for Federal Estate Tax Purposes

Estate planning for federal estate tax purposes involves strategies to manage the value of one’s taxable estate. Asset valuation is a fundamental component, as all assets must be accurately assessed at their fair market value as of the date of death. This valuation directly impacts whether an estate exceeds the federal exemption amount.

The unlimited marital deduction is a key element, allowing individuals to transfer an unlimited amount of assets to a surviving spouse, free of federal estate or gift tax. This deduction can significantly reduce or eliminate estate tax liability at the first spouse’s death. Charitable deductions also provide a means to reduce the taxable estate, as gifts made to qualified charitable organizations are generally exempt from estate tax. Gifting strategies, within annual and lifetime exclusion limits, can also be employed to reduce the size of a taxable estate over time. The annual gift tax exclusion for 2025 is $19,000 per recipient.