North Carolina Repeals the Estate Tax

North Carolina recently saw sweeping changes to the tax laws. The North Carolina legislature repealed the State’s estate tax making it retroactive to July 1, 2013. ┬áThe timing is key for wealthy families with deaths in the family since the beginning of the year. Those that had deaths in the family in 2013 expecting to pay a North Carolina Estate Tax received great news and substantial savings with this retroactive change.

The lack of an estate tax will be beneficial to North Carolina, encouraging people to stay put or move to North Carolina from other less tax friendly states. Many who had been considering moving their domicile to South Carolina, Florida or other states without state estate taxes are now reconsidering. Many wealthy residents were being run off because of income taxes and estate taxes. A federal estate tax is still due for individuals with estates over $5,250,000.00 and couples (who have done proper planning) with estates that exceed $10,500,000.00. The tax reform package includes a massive income tax cut too, dropping the old top rate of 7.75% to a flat 5.8% in 2014 and 5.75% in 2015. North Carolina has become very attractive for current residents and for people who are looking to move or retire here. If you have questions about how the tax changes may affect your estate or estate planning, contact out office.