§2058 State Death Taxes

Summary

You can lower the federal estate tax by subtracting state estate, inheritance, legacy, or succession taxes that were actually paid to any State or the District of Columbia on property in the estate. Do not count any state taxes that were paid for a different person’s estate. The deduction only counts if the taxes were paid and the deduction was claimed before the later of two times: four years after the estate tax return was filed, or certain other deadlines. Those other deadlines are: 60 days after a Tax Court decision becomes final if a Tax Court petition was filed; the end of any granted extension for paying the tax; or, if a timely refund claim was filed, the latest of (a) 60 days after the government mailed a denial notice, (b) 60 days after a final court decision in a timely lawsuit, or (c) two years after a filed waiver-of-disallowance notice. If you file a refund claim within these times, a refund based on the deduction can be paid, but it will not include interest.