EGTRRA and state death tax credit

One of the things in EGTRRA

formatting link
a phase-out the federal estate tax credit for state death taxes, going to zero after 2004. What I'm not sure about, is whether it comes back again in 2011 if no new laws are passed. In other words, does *everything* in EGTRRA expire at the end of this year, or were some provisions permanent?

As I understand it, many states, including California, tied their death tax the to amount of the federal credit, and as a result have had no death taxes for the last half dozen years. While not changing the overall tax liability, a re-emergence of the state death tax credit would mean more filing of state death tax returns.

-Mark Bole

Reply to
Mark Bole
Loading thread data ...

Here's the actual wording of the sunset provision:

SEC. 901. SUNSET OF PROVISIONS OF ACT.

(a) IN GENERAL- All provisions of, and amendments made by, this Act shall not apply-- (1) to taxable, plan, or limitation years beginning after December 31,

2010, or (2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010. (b) APPLICATION OF CERTAIN LAWS- The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.

So... as of 1/1/2011 all of the changes (including the reductions to the credit, the repeal of the credit and the substitution of a deduction) go poof! Any state that left the "pick-up tax" on its books without any changes will once again have an estate tax.

Here's a chart of which states have an estate tax (not a pick-up tax):

formatting link
Here's a chart of which states don't have an estate tax today:
formatting link
I don't know which of the states without an estate tax still have the pick-up tax on the books.

Reply to
Alan

Found this chart at McGuireWoods LLP, that appears to tell you who still has the pick-up tax:

formatting link

Reply to
Alan

[...]

Thank you, Alan. Very helpful! I was looking for the word "expire", not "sunset", when I searched the text of the law. Oh well.

-Mark Bole

Reply to
Mark Bole

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.