Inheritance Tax in the USA: A Guide for Permanent Residents

Those who obtain permanent residency in the United States gain access to a universe of opportunities, but also assume tax responsibilities that go beyond income tax. One of the most important is the estate tax, the federal inheritance tax, which is levied on the total estate of a deceased person before distribution to heirs. For Green Card holders, the rules are particularly broad, as they cover assets anywhere in the world.

In 2026, significant legislative changes altered the landscape of estate planning in the US. The One, Big, Beautiful Bill Act made the elevated estate tax exemption permanent, eliminating the uncertainty that loomed over a possible drastic reduction of the exemption threshold. Understanding these rules is essential to protect family wealth and ensure an efficient transfer to the next generation.

This guide presents the essential concepts of the American inheritance tax for permanent residents. It does not constitute legal or tax advice, and estate planning should always be conducted with attorneys and accountants specialized in the United States.

What Is the Federal Estate Tax

The estate tax is a federal tax levied on the total estate of a deceased person before assets are distributed to heirs. A key point is that this tax is paid by the estate (the set of assets left behind), not directly by those who receive the inheritance. The maximum federal rate is 40%, applied to the value that exceeds the exemption threshold.

Worldwide Assets Rule

For Green Card holders, who are considered domiciled in the US for tax purposes, the estate tax applies to worldwide assets. This means that real estate in Brazil, bank accounts in Europe, and investments anywhere in the world are included in the calculation base, in addition to assets located in the United States. This rule distinguishes permanent residents from non-residents, who are taxed only on assets located within US territory.

Federal Exemption in 2026

The federal estate tax exemption for 2026 is $15 million per individual, according to the IRS’s annual adjustment. For couples, this amount can be combined through exemption portability, allowing up to $30 million to be transferred to heirs without incurring federal estate tax. The One, Big, Beautiful Bill Act made this elevated exemption permanent, with annual inflation adjustments.

In practice, the vast majority of permanent residents will not be affected by the federal estate tax, given the high exemption threshold. However, for estates that approach or exceed this limit, professional estate planning is absolutely essential to minimize the tax burden.

State Inheritance Taxes

In addition to the federal tax, several US states have their own inheritance tax rules, with significantly lower exemptions. In 2026, the main states with estate tax and their approximate exemptions are:

Some states also apply the inheritance tax, a tax paid directly by heirs after receiving the inheritance. Nebraska, for example, taxes inheritances for adult children that exceed $100,000. The practical result is that, even if exempt from the federal tax, the resident may have significant tax obligations in the state where they reside.

Non-Citizen Spouses and the QDOT

A critical aspect for couples where only one spouse is a US citizen: the unlimited marital deduction does not automatically apply to spouses who are not US citizens. Without this deduction, transfers to the surviving non-citizen spouse may be fully taxed.

The legal solution is the QDOT (Qualified Domestic Trust), a special type of trust that allows the deceased’s estate to defer payment of the estate tax on assets transferred to the non-citizen spouse. To be valid, the QDOT requires that at least one of the trustees be a US citizen, and for estates above $2 million, one of the trustees must be a US bank or provide security to the IRS equivalent to 65% of the value of the assets.

The annual exemption for gifts to a non-citizen spouse is $194,000 in 2026, higher than the general limit of $19,000, but much lower than the unlimited marital deduction available to citizen spouses. This planning requires specialized legal guidance.

Gift Tax and Lifetime Gifts

The US estate tax system is closely linked to the gift tax. The estate tax and gift tax exemption is unified: the $15 million represents the combined total of lifetime and post-mortem transfers. The annual exclusion for gifts is $19,000 per beneficiary in 2026, an amount that does not consume the lifetime exemption.

Strategic lifetime gifts can be a powerful estate planning tool. By using the annual exclusion of $19,000 per beneficiary per year, it is possible to transfer significant wealth over time without impacting the lifetime exemption. Couples can combine their exclusions, gifting up to $38,000 per beneficiary per year.

Temporary Visas: Different Rule

Holders of non-immigrant visas (H-1B, L-1, F-1, among others) who are not considered domiciled in the US follow different rules. The estate tax exemption for non-residents on assets located in the United States is only $60,000, a value drastically lower than the $15 million available to permanent residents.

This makes estate planning especially urgent for professionals on temporary visas who own significant assets in the US, such as real estate, investment accounts, or business interests. Hiring an estate planning attorney is highly recommended in these situations.

Frequently Asked Questions

Estate Tax vs. Inheritance Tax

The estate tax is paid by the estate before assets are distributed to heirs. The inheritance tax is paid by heirs after receiving the inheritance. The federal government only levies the estate tax. The inheritance tax exists only in a few US states, such as Nebraska, Iowa, Kentucky, Maryland, New Jersey, and Pennsylvania.

Temporary Visas and Estate Tax

Holders of temporary visas who are not domiciled in the US have an exemption of only $60,000 on assets in US territory, with no access to the $15 million exemption for permanent residents. This difference makes estate planning even more critical during their stay in the country.

Can the Exemption Change?

With the approval of the One, Big, Beautiful Bill Act, the elevated estate tax exemption was made permanent, with annual inflation adjustments. Still, future legislative changes by Congress are always possible, which reinforces the importance of periodically reviewing estate planning with specialized professionals in the US.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.