Florida Has No Estate Tax. The IRS Still Does.

Florida's tax advantages are real. No state income tax. No state estate tax. No inheritance tax. For retirees in Sarasota, Venice and Lakewood Ranch, that is part of the appeal.

But I regularly meet families who heard "Florida has no estate tax" and concluded there is no estate tax. That is not the same sentence. The federal estate tax applies to Floridians exactly as it applies to everyone else.

Why Florida has no estate tax

Florida's constitution, in Article VII, section 5, restricts the state's estate tax to the amount allowable as a credit against the federal estate tax for state death taxes. Florida's estate tax statute, chapter 198 of the Florida Statutes, was built as a "pick-up" tax that simply captured that federal credit.

Federal law phased out the state death tax credit, and for deaths after 2004 it was replaced by a deduction for state death taxes under IRC 2058. With no federal credit to pick up, Florida's estate tax became zero. It remains zero unless the federal credit returns, and Florida voters would have to change the constitution to do anything else.

Florida also has no inheritance tax. Heirs do not pay Florida tax on what they receive.

The federal estate tax in 2026

The federal estate tax applies to the taxable estate of every U.S. citizen or resident who dies, wherever they lived. For 2026:

• The basic exclusion amount is $15,000,000 per person, under Rev. Proc. 2025-32, as set by the One Big Beautiful Bill Act. It is indexed for inflation after 2026.
• A married couple can effectively shelter up to twice that by using the first spouse's unused exclusion through portability.
• Amounts above the available exclusion are taxed at graduated rates reaching a top rate of 40 percent under IRC 2001(c).

A Form 706 is required under IRC 6018(a) when the gross estate plus adjusted taxable gifts exceeds the basic exclusion amount. Note the word "gross." The test looks at total assets before deductions. A $16,000,000 estate that leaves everything to a surviving spouse owes no tax because of the marital deduction, but it still has to file.

What counts in the gross estate

Families routinely underestimate the gross estate. It includes:

• The Florida homestead and any other real estate, at fair market value.
• Retirement accounts, including IRAs and 401(k)s.
• Life insurance the decedent owned, even though the proceeds go to named beneficiaries.
• Assets in a revocable living trust.
• The decedent's share of jointly held property.
• Business interests, partnership interests and LLC interests.

Lifetime taxable gifts are added back as adjusted taxable gifts. A couple who gave away millions during life may be closer to the threshold than their balance sheet suggests. The guide to when a Form 709 is required explains how those gifts are tracked.

Sarasota real estate deserves its own sentence. Gulf-front property values have climbed for years. An estate that was comfortably under the threshold a decade ago may not be today. And values for estate tax purposes are market values, not county assessed values. See estate valuation disputes.

Deductions that reduce the tax

The two big ones:

• The marital deduction under IRC 2056 for property passing to a surviving spouse who is a U.S. citizen. Property passing to a non-citizen spouse generally requires a qualified domestic trust under IRC 2056(d) to qualify.
• The charitable deduction under IRC 2055 for property passing to qualifying charities.

Debts, mortgages, funeral expenses and administration expenses are deductible too, and state death taxes paid to another state are deductible under IRC 2058.

The snowbird problem

Here is the trap. Florida has no estate tax, but some other states do, and several have exemption amounts far below the federal figure. A state that imposes an estate tax can generally tax real estate and tangible property physically located in that state, even if the owner was a Florida domiciliary.

So a Sarasota retiree who kept a summer house in a state with an estate tax may owe that state's tax on the house. If the state can make a case that the decedent was never really a Floridian, it may try to tax far more.

Domicile is a facts-and-circumstances question. Florida Statutes 222.17 provides for a sworn declaration of domicile filed with the clerk of the circuit court. That helps. So does a Florida driver's license, voter registration, the homestead exemption, and where you actually spend your time and keep your important things. The guide to snowbird tax problems covers residency issues more broadly.

Florida paperwork that still exists

For years, Florida probate and title practice relied on two Department of Revenue affidavits: Form DR-312, Affidavit of No Florida Estate Tax Due, and Form DR-313, Affidavit of No Florida Estate Tax Due When Federal Return is Required. According to the Florida Department of Revenue, beginning July 1, 2023, personal representatives of estates do not have to file either form. The Department explains that Florida's estate tax does not apply to people who died after December 31, 2004, because of the federal change described above.

So if a title company or lender asks for a DR-312 on a recent estate, point them to the Department's guidance. Older estates may still have one in the chain of title, which is simply a record of how things were done at the time.

The federal side is not a formality. If the estate is taxable, the special federal estate tax lien attaches to the gross estate at death without any public filing.

Who files and who pays

IRC 2002 makes the executor responsible for paying the estate tax. If there is no court-appointed executor, the Code treats any person in actual or constructive possession of the decedent's property as the executor for estate tax purposes under IRC 2203. For a Florida family that used a revocable trust to avoid probate, that is usually the successor trustee.

The tax comes out of the estate, but the executor's handling of it carries personal risk. Distributing before the estate tax is paid can expose the executor under the federal priority statute, and beneficiaries who received non-probate property can be personally liable under IRC 6324(a)(2). See executor personal liability.

Non-citizen spouses

Southwest Florida has plenty of couples where one spouse is not a U.S. citizen. The unlimited marital deduction does not apply to property passing outright to a non-citizen spouse. Without a qualified domestic trust under IRC 2056(d), a large estate can owe tax at the first death even though everything went to the spouse. During life, gifts to a non-citizen spouse get a higher annual exclusion instead of the unlimited marital deduction: $194,000 for 2026 under Rev. Proc. 2025-32.

Deadlines and payment

A required Form 706 is due nine months after death, with an automatic six-month extension available on Form 4768. Tax is due at nine months regardless. See Form 706 deadlines and extensions. Estates heavy in real estate or a family business may qualify to defer payment under section 6166.

The takeaway

Florida's tax climate helps you during life. At death, the federal government is still waiting, with a 40 percent top rate. Most Florida estates will never owe federal estate tax under a $15,000,000 exclusion. The ones that do usually knew they were close and planned, or did not know and found out the expensive way.

And to be clear about the paperwork: there is no Florida estate tax return and no Florida inheritance tax return to file. For a Sarasota estate, the only death-tax return that can be required is the federal Form 706, along with any return a state where the decedent owned property may require.

If you are an executor trying to figure out whether a Florida estate owes federal estate tax, call (813) 229-7100. Let's talk.