Federal Estate Tax in West Virginia

Most West Virginia families will never owe any estate tax. West Virginia levies no state estate tax and no inheritance tax, so the only estate-level tax that can reach a West Virginia estate is the federal one. And the federal estate tax touches almost no one: the exclusion runs high enough that nearly every estate passes to heirs free of any estate tax.

Still, if an estate is large, or if a surviving spouse could benefit from a filing decision, the federal rules matter. This guide walks through the federal estate tax as it applies to West Virginia families, including the current exclusion, the portability election, what counts in the estate, and how the estate tax differs from the step-up in basis.

West Virginia Has No State Estate or Inheritance Tax

Start with the good news for West Virginia families: the state collects no estate tax and no inheritance tax.

West Virginia's estate tax is a "pick-up" tax. W. Va. Code Section 11-11-3 imposes a West Virginia estate tax only when a federal estate tax is payable, and only in the amount of the maximum federal credit for state death taxes attributable to property in the state. Congress phased out that federal credit, and it fell to zero for deaths after December 31, 2004, so the West Virginia pick-up tax now computes to nothing. The statute stays on the books, but it collects no estate tax on a current death.

West Virginia also charges no inheritance tax, which is a separate tax some states levy on the people who receive an inheritance based on their relationship to the person who died. West Virginia has neither kind of state death tax. So for a West Virginia estate, the analysis is short: the state takes nothing at the estate level, and only the federal estate tax can apply.

One point sets West Virginia apart from its neighbor Virginia. West Virginia charges no probate tax on the value of the estate. The costs of opening an estate are per-document recording and probate fees paid to the Clerk of the County Commission, a small fee to publish the notice of administration, and the newspaper's legal-advertisement charge. None of those turn on the federal exclusion, and none of them is an estate or inheritance tax.

One caution: if you inherit property located in another state, or from someone who lived in a state that does levy an estate or inheritance tax, that state's rules can still apply to the property within its borders. Living in West Virginia does not shield out-of-state property from another state's death tax.

The Federal Estate Tax Exclusion

The federal estate tax applies only to estates whose value tops the exclusion amount, the exemption threshold set by federal law.

For deaths in 2026, the federal estate tax exclusion is $15 million per person. That means:

One person can pass up to $15 million free of federal estate tax.
A married couple can shield up to $30 million using portability (covered below).
Only the amount above the exclusion is taxed.
The top federal estate tax rate is 40 percent.

The exclusion is indexed for inflation, so it rises in future years. Because the tax reaches only the amount over $15 million, the effective rate on an entire estate always lands below 40 percent, and for almost every West Virginia estate it is zero.

A Note on the 2026 Law

Many older estate planning documents warned that the exclusion would roughly cut in half at the start of 2026 under a sunset provision in the 2017 tax law. That sunset did not take effect. Under current federal law the exclusion is $15 million per person for 2026, indexed in later years. If your plan includes trusts or gifting programs built around a lower exclusion, review it with your attorney, because the strategy may no longer be needed and could even work against you given the step-up in basis rules.

What Counts in the Gross Estate

The "gross estate" for federal purposes is broader than what passes through probate or is named in a will. Under Internal Revenue Code Sections 2031 through 2046, it generally includes:

Real estate, bank and brokerage accounts, stocks, and bonds
Life insurance proceeds on a policy the decedent owned or controlled (ownership, not who the beneficiary is, drives inclusion)
Retirement accounts such as IRAs, 401(k)s, and 403(b)s
Business interests and closely held company stock
The decedent's share of jointly owned property
Assets in a revocable living trust
Certain gifts made within three years of death, particularly transfers of life insurance
Powers of appointment the decedent held

Someone with a paid-off West Virginia home, a large IRA, and a life insurance policy can have a gross estate far bigger than their probate estate, because most of those assets pass outside probate but still count for the estate tax. The gross estate is then reduced by debts, funeral and administration expenses, and the deductions below to reach the taxable estate.

Deductions That Shrink the Taxable Estate

Two deductions erase estate tax for most families, even wealthy ones:

Unlimited marital deduction. Property left outright to a surviving spouse who is a U.S. citizen passes free of federal estate tax with no dollar limit. This is why most married couples owe nothing when the first spouse dies. The tax is deferred, not erased, and can apply when the second spouse dies.

Unlimited charitable deduction. Property left to a qualified charity is fully deductible from the estate, dollar for dollar.

Debts, funeral costs, and estate administration expenses also reduce the taxable estate.

Portability: The Filing That Can Save a Spouse Millions

When the first spouse in a marriage dies, their unused federal exclusion does not vanish on its own. Under the portability election, the surviving spouse can claim the deceased spouse's unused exclusion, called the deceased spousal unused exclusion, or DSUE, and add it to their own.

Example. A husband dies in 2026 with a $4 million estate and uses $4 million of his $15 million exclusion. His remaining $11 million can transfer to his wife. She then holds her own $15 million exclusion plus his $11 million, a combined $26 million shielded from estate tax.

Here is the trap: portability is not automatic. The executor must file IRS Form 706, the United States Estate Tax Return, to make the election. The return is due nine months after death, with a six-month extension available. Portability requires the filing even when the estate owes no tax and sits far below the exclusion.

Many families skip Form 706 because "we do not owe anything." That choice can cost the surviving spouse a great deal if the couple's combined estate later grows past one exclusion. Filing only to preserve portability is a modest step an attorney can handle.

When Form 706 Must Be Filed

File Form 706 when any of these apply:

The gross estate plus adjusted taxable gifts tops the exclusion (tax may be owed).
You want to elect portability to preserve the deceased spouse's unused exclusion.
The estate has generation-skipping transfers to allocate.

The return is due nine months after the date of death. Form 4768 grants an automatic six-month filing extension, but any tax owed is still due at the nine-month mark, since the extension covers filing, not payment. Form 706 is one of the more detailed federal returns, so estates that must file it usually benefit from a CPA or estate attorney to document valuations, claim deductions, and elect portability correctly.

Gifts During Life and the Annual Exclusion

The federal gift tax and estate tax work together: lifetime gifts and transfers at death share the same lifetime exclusion.

Annual gift exclusion. For 2026, you can give up to $19,000 per recipient per year without touching your lifetime exclusion or filing a gift tax return. A married couple can give $38,000 per recipient, and there is no limit on the number of recipients.

Gifts that never count. Some transfers sit entirely outside the gift tax: amounts paid directly to a medical provider for someone's care, amounts paid directly to a school for someone's tuition, gifts to a spouse, and gifts to qualified charities.

Larger gifts. A gift above the annual exclusion uses part of your lifetime exclusion and calls for IRS Form 709. Filing the return does not mean you owe tax; it records the gift against your lifetime amount. Because the interplay among gift tax, estate tax, and capital gains can get complicated, get advice before making large lifetime gifts.

Estate Tax Is Not the Step-Up in Basis

Two very different taxes get confused here, so keep them apart.

The federal estate tax is a transfer tax on the value of the estate at death. It applies only above the $15 million exclusion, so it reaches almost no one.

The step-up in basis is an income-tax rule that applies to nearly every inherited asset regardless of estate size. Under Internal Revenue Code Section 1014, an inherited asset's cost basis resets to its fair market value on the date of death. That lowers the capital gains tax the heir owes when they later sell. West Virginia is a common-law (separate-property) state, so only the decedent's share of jointly owned property steps up. See the West Virginia step-up in basis guide for how the basis reset works and how West Virginia taxes any gain.

For almost every West Virginia family, the step-up is the tax rule that actually matters, not the estate tax. If you sell an inherited home, our guide on selling inherited property in West Virginia walks through how the stepped-up basis limits the gain.

Practical Takeaways for West Virginia Families

Most West Virginia estates need no estate tax planning at all. The exclusion runs high, and West Virginia adds no state layer. The practical moves are usually these:

Confirm you are under the exclusion. Add up everything, including life insurance you own and retirement accounts, not just probate assets. If the total sits well below $15 million, no federal estate tax applies.
Preserve portability for a married couple. If one spouse dies, consider filing Form 706 to lock in the unused exclusion, even when no tax is due. It is a low-cost safeguard.
Lean on the step-up. Holding appreciated assets until death gives heirs a stepped-up basis. Gifting those same assets during life hands the recipient your old basis and wastes the step-up.
Get help only if the estate is genuinely large or complicated. Business interests, farms, out-of-state property, blended families, or an estate near the exclusion are the cases where an attorney and CPA earn their fee.

Once you know no estate tax is owed, read the West Virginia probate guide to see how the estate settles, and for ways to keep assets out of probate, see how to avoid probate in West Virginia.

Frequently Asked Questions

Does West Virginia have an estate tax or inheritance tax?

No. West Virginia has no state estate tax and no inheritance tax. Its estate tax under W. Va. Code Section 11-11-3 equals the federal credit for state death taxes, which Congress repealed, so the pick-up tax now computes to zero. Only the federal estate tax can reach a West Virginia estate, and it applies only above the federal exclusion.

How much can I leave without owing federal estate tax?

For deaths in 2026, the federal estate tax exclusion is $15 million per person. A married couple can shield up to $30 million using portability. Only the amount above the exclusion is taxed, at rates up to 40 percent.

Do I need to file a federal estate tax return in West Virginia?

You must file IRS Form 706 if the gross estate plus lifetime taxable gifts tops the exclusion, or if you want to elect portability for a surviving spouse. It is due nine months after death, with a six-month extension available.

What is portability and why does it matter?

Portability lets a surviving spouse add the deceased spouse's unused exclusion (the DSUE) to their own. It is not automatic. The executor must file Form 706 on time, even when no tax is due, or the unused exclusion is lost.

Does West Virginia charge a probate tax?

No. Unlike neighboring Virginia, West Virginia charges no probate tax on the value of the estate. The costs of opening an estate are recording and probate fees paid to the Clerk of the County Commission and the charge to publish the notice of administration, none of which is an estate or inheritance tax.

Sources:

Title: W. Va. Code Section 11-11-3, Imposition of tax. Publisher: West Virginia Legislature, West Virginia Code. Publication Date: Not listed. URL: https://code.wvlegislature.gov/11-11-3/
Title: Estate Tax. Publisher: Internal Revenue Service. Publication Date: Not listed. URL: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
Title: IRS Releases Tax Inflation Adjustments for Tax Year 2026. Publisher: Internal Revenue Service. Publication Date: 2025. URL: https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
Title: About Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Publisher: Internal Revenue Service. Publication Date: Not listed. URL: https://www.irs.gov/forms-pubs/about-form-706
Title: Frequently Asked Questions on Estate Taxes. Publisher: Internal Revenue Service. Publication Date: Not listed. URL: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-estate-taxes

It is not legal advice.