Beginning for dates of death occuring on or after January 1, 2003, Massachusetts decoupled its estate tax laws from the federal laws. What this means for Massachusetts residents and nonresidents who own real estate or tangible personal property located in Massachusetts is the following:
- For deaths occurring on or after January 1, 2006, if the decedent's gross estate exceeds $1,000,000, then a Massachusetts estate tax return, Form M-706, must be filed within nine months of the date of death and any tax due must be paid at the same time.
- Form M-706 must be filed even if no Massachusetts estate tax will be due as a result of applicable deductions and exemptions.
- The July 1999 version of the federal estate tax return, IRS Form 706, must also be prepared and filed with Form M-706. This is in addition to IRS Form 706 for the year of death if one is required to be filed.
- An extension of time to file Form M-706 may be requested, however, even if an extension is granted it won't delay the time for payment of any tax due.
- If the value of the gross estate requires the filing of Form M-706, then a Certificate Releasing Massachusetts Estate Tax Lien, Form M-792, is necessary for real estate owned jointly or a tenants by the entirety, real estate held in trust, and other real estate that isn't part of the probate estate but is includible in the gross estate.
- The tax rate is a progressive one that maxes out at 16%.
This information is courtesy of the Massachusetts Department of Revenue.
The bottom line - if you're a Massachusetts resident and your estate is passing to someone other than your spouse and the value is $1,000,000 or more, or if you're a nonresident who owns real estate and/or tangible personal property located in Massachusetts and your estate is valued at $1,000,000 or more, then your estate may owe a Massachusetts estate tax. Up next, Minnesota estate taxes.
- Understanding Death, Estate and Inheritance Taxes
- State Estate Tax Chart
- Understanding the State Estate Tax Exemption Trap
- When is a Federal Estate Tax Return Required to Be Filed?
- How to Calculate Your Federal Estate Tax Liability
- How to Reduce or Even Eliminate Your Estate Tax Bill
- Estate Planning in Massachusetts by McLaughlin & Quinn, LLC