Alabama Estate Taxes

Alabama's estate tax law is designed to absorb the credit allowed by the federal estate tax law (i.e., a "pick-up" tax). It does not provide for an additional estate tax.

If you are a resident of Alabama at the time of your demise, the tax is imposed on the same property in your estate that would be taxable under federal estate tax law. For nonresidents, generally only real property and tangible and intangible property within the state are subject to tax.

Deductions. The following deductions are allowed from a decedent's estate:

• decedent's debts
• expenses of last illness
• funeral expenses
• estate administration expenses
• claims against the estate
• mortgages on Alabama property
• losses incurred during the settlement of the estate arising from fire, theft, shipwreck or other casualties
• executor's commissions
• attorney's fees
• the same Alabama and federal taxes as are deductible in determining the federal tax

Returns. A copy of the federal estate tax return must be filed with the Alabama State Department of Revenue. The same applies for any amended returns that may follow. Any taxes that are due must be paid within nine months after the decedent's death.

Generation-skipping transfer tax. Alabama imposes a generation-skipping transfer tax that is equal to the federal credit. The tax applies as long as the federal government enforces a generation-skipping transfer tax against any Alabama generation-skipping transfer.