An estate tax, commonly referred to as a death tax, is a topic that may come up when you discuss your estate plans with friends, family or advisers. While many people are aware of the federal estate tax, some people may wonder if Missouri possesses its own estate tax. Currently, the state does not levy an estate tax, although if federal government tax policy changes, this might change as well.
The Missouri Department of Revenue explains the situation that stands in Missouri. The Internal Revenue Service (IRS) at one point used to allow for estate tax credits from the states. However, this changed due to the Economic Growth and Tax Relief Reconciliation Act (EGTRRA). Passed by Congress in 2001, this law reduced the tax credit taken against the federal estate tax over the next few years until 2005, when the tax credit reached zero.
Missouri once levied its own estate tax, but when the state estate tax credit completely expired in January 1, 2005, the state stopped taxing estates of deceased residents. This development has allowed estate executors to forgo filing an estate tax return on their estates since then. However, this does not mean Missouri executors might not have to pay an estate tax at some point in the future.
Whether Missouri imposes an estate tax depends on whether the IRS re-institutes the state death tax credit. If this should occur, Missouri executors would have to file a state estate tax return. For this reason, it is important to remain aware of changes in tax law which may complicate how you or someone you know processes an estate.