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Estate Tax - FAQ
Does Georgia have an estate tax?
As of July 1st, 2014, O.C.G.A. § 48-12-1 was added to read as follows:
§ 48-12-1. Elimination of estate taxes and returns; prior taxable years not applicable
(a) On and after July 1, 2014, there shall be no estate taxes levied by the state and no estate tax returns shall be required by the state.
(b) Tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by the enactment of this Code section and shall continue to be governed by the provisions of general law as it existed immediately prior to July 1, 2014.
(c) This Code section shall not abate any prosecution, punishment, penalty, administrative proceeding or remedy, or civil action related to any violation of law committed prior to July 1, 2014.
Please note even though the law was repealed on January 1, 2014, the previous estate tax only applies for estates of decedents with a date of death before January 1, 2005 as explained below. As such the following questions only relate to such estates.
Georgia's estate tax for estates of decedents with a date of death before January 1, 2005 is based on federal estate tax law. Georgia has no inheritance tax, but some people refer to estate tax as inheritance tax. The tax is paid by the estate before any assets are distributed to heirs. It is not paid by the person inheriting the assets. Georgia's estate tax is based on the amount allowable as a credit for state death taxes on the federal estate tax return (Form 706). Use the tax table in the federal instructions to compute the credit. The amount paid to Georgia is a direct credit against the federal estate tax. Visit the IRS website.
The Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”) of 2001 (H.R. 1836) modified the estate tax.
For individuals dying in 2002, the state death tax credit is reduced by 25% from the pre-2001 EGTRRA amount; for individuals dying in 2003, the credit is reduced by 50% from the pre-2001 EGTRRA amount; for individuals dying in 2004, the credit is reduced by 75% from the pre-2001 EGTRRA amount; and for individuals dying in 2005 and after the state death tax credit was repealed and replaced with a deduction.
Therefore, for estates of decedents with a date of death after December 31, 2004, Georgia estate tax does not apply to any estate with a date of death that occurred in a year for which the Internal Revenue Code does not allow a credit for state death taxes.
Georgia does not have an estate tax form. You must file a copy of the federal return with payment for the Georgia tax. The due date is the same as the federal due date, 9 months after the date of death. If no Federal estate tax return is required to be filed, no Georgia filing is required.
Where do I send the return and anything else related to Georgia estate tax?
Georgia Department of Revenue
P O Box 740320
Atlanta, GA 30374-0320
Street address for courier delivery:
Georgia Department of Revenue
Estate Tax Section
1800 Century Center Blvd. N.E.
Atlanta, GA 30345-3205
The IRS’ instructions say to attach proof of payment of the state tax. Do you give proof of payment?
Yes. We issue a certificate of payment for any estate tax payment received. A copy goes to the executor and a copy to the IRS.
I'm sending a request for an extension of time to file with the IRS (form 4768). What do I do for Georgia?
If there is estimated tax due, attach payment (made payable to Georgia Dept of Revenue) to a copy of the federal extension request, marked "state copy" or "Georgia copy," and send it to us. If no tax is due, you can wait and attach a copy of the approved federal extension to the Georgia copy of the return when you file it. We honor the federal extension of time to file. Please do not use income tax forms IT-560, IT-560C or 500-ES.
I am filing an amended/supplemental return with the IRS. What do I do for Georgia?
File with Georgia a copy of what you are filing with the IRS. If you are claiming a refund of overpaid tax, we will hold your claim in abeyance until the IRS makes a determination. When the IRS issues a report showing the change in the allowable state death tax credit, send us a copy of their report, and we will process the appropriate refund with interest. If the amended return reflects an increase in the allowable state death tax credit, send a copy, along with payment of the additional Georgia tax and interest.
What is the interest rate?
Interest accruing for months beginning before July 1, 2016 accrues at the rate of 12 percent annually. Interest that accrues for months beginning on or after July 1, 2016 accrues at an annual rate equal to the Federal Reserve prime rate plus 3 percent. The interest rate will be reviewed and may be adjusted in January of each subsequent calendar year based on the Federal Reserve Rate.
The IRS has completed an exam of the estate return, and the allowable state death tax credit is different, or we have come to an agreement with the IRS, or the Tax Court has issued a decision, and there is a change in the credit. What do I do?
Send a copy of the document that was received from the IRS or the Tax Court, and follow the amended return procedure listed above.
The estate of a nonresident decedent has property in Georgia. How do I compute the Georgia tax?
The gross value of the property taxable to Georgia is divided by the total federal gross estate. The resulting percentage is multiplied by the total allowable state death tax credit to arrive at the Georgia tax. Show your computation of the Georgia tax in a cover letter or worksheet.
The estate of a Georgia resident decedent has property in other states, and must pay estate/inheritance taxes to those states. How do I compute the Georgia tax?
The gross value of the property taxable in the other states is divided by the total federal gross estate. The resulting percentage is multiplied by the total allowable state death tax credit to arrive at the GA tax reduction.
Assuming the same facts as in the two previous questions and the GA property is eligible for the marital deduction on the federal return, or the GA property has a mortgage which is deductible on the federal return. Does Georgia allow these deductions?
The estate receives indirect benefit of these deductions for state purposes since they do affect the allowable state death tax credit. However, no deductions can be used when prorating the state death tax credit to arrive at the Georgia tax.
IRC Section 6161 provides for an extension of time to pay the federal tax. (In some cases, the extension can be up to 10 years). Does Georgia have such an extension of time to pay?
Yes. Georgia can grant an extension of time to pay under the same terms and conditions as the IRS grants under IRC section 6161 for payment of the federal tax. Submit a copy of your federal extension request. If the estate makes a partial payment of the federal estate tax, a like percentage of the Georgia tax should be paid at the same time. Interest on Georgia tax accrues as specified in the above question and answer, from the original due date through the date of payment, regardless of extensions.
Because a large portion of this estate is in a family farm or closely held business, we qualify, and are electing to pay that portion of the federal estate tax in installments under IRC section 6166. Does Georgia have this provision?
No. Georgia's law does not provide for installment payments, or for any exception to the monthly interest rate. The estate can apply for an extension of time to pay, under the regular terms of IRC section 6161. The Department will accept any partial payments the estate makes.
I made an estimated tax payment with an extension request 6 months ago. Now the state death tax credit on the return is less. How do I claim a refund?
When you file the Georgia copy of the estate tax return, attach a letter requesting the refund.
We have received a closing letter and discharge of personal liability from IRS. Does Georgia issue something similar?
No. If the closing letter shows the same figures as what was filed with Georgia, and if the Georgia liability has been paid, no further action is necessary for Georgia estate tax.
I am trying to transfer stock from the name of a decedent into my name, and the brokerage says I need to obtain a tax waiver if required by the state.
Georgia has no inheritance/estate tax waiver requirements.
I have inherited money/property. What do I need to do for Georgia taxes?
Georgia has no inheritance tax. Check with the IRS to see if anything needs to be included in income. Georgia's estate tax is based on federal estate tax law, and if any estate tax is due, it should be paid by the estate representative before the assets are distributed.