Money Is there a federal inheritance tax? Here’s how much inherited money is taxed state-by-state. February 20, 2023February 21, 2023Medora Lee, USA TODAYComments Off on Is there a federal inheritance tax? Here’s how much inherited money is taxed state-by-state. Inheritance taxes are rare and can surprise you after a loved one dies. Here's what to know about how they work, who pays them, and how to avoid them.