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Florida's Estate Tax
Prior to January 1, 2005, Florida's estate tax system was commonly referred to as a "pick up" tax. This was because Florida picked up all, or a portion of, the credit for state death taxes allowed on the federal estate tax return (federal Form 706 or 706NA). Under this system, when the estate's gross value was below the minimum federal estate tax filing threshold, estate tax was not due to Florida.
Gross value:
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The estate's gross value includes all property totally or partially owned such as: real estate, money, life insurance, annuities, stocks, bonds, accounts receivables and notes receivables, equipment, autos, furniture, artwork or jewelry.
Federal estate tax filing threshold:
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These federal filing thresholds are for informational purposes only. Please confirm with federal Form 706 instructions. Also see ยง2010 and 6018(a), Internal Revenue Code. Date of Death Minimum Filing Requirements 2000 and 2001 $675,000 2002 and 2003 $1,000,000 2004 and 2005 $1,500,000 2006 and forward Please go to the IRS website at www.irs.gov to obtain thresholds
Federal changes eliminated Florida's estate tax after December 31, 2004. This happened because the federal credit for state death taxes on the federal estate tax return became a deduction for state estate taxes. Since Florida estate tax was based solely on the federal credit, after December 31, 2004 estate tax was no longer due. However, the personal representative of an estate may still need to complete certain forms to remove the automatic Florida estate tax lien.
Federal changes:
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The Economic Growth and Tax Relief Reconciliation Act of 2001 (Pub. L. No. 107-16) ("Tax Act") amended the Internal Revenue Code to provide that an estate cannot claim a credit for state death taxes for decedents who died after December 31, 2004. Since the amount of Florida estate tax is based upon the amount of federal credit allowable for state death taxes, an estate of a decedent who dies after December 31, 2004 will not owe Florida estate tax.
The Tax Act does not affect the obligation of a personal representative who files IRS Form 706-A or 706-QDT to report to the Department additional tax due from decedents who died prior to January 1, 2005.
Personal representative:
Personal representative means the fiduciary appointed by the court to administer the estate and refers to what has otherwise been known as the executor or administrator.
Estates Required to File a Florida Estate Tax Return:
For estates of decedents who died prior to December 31, 2004 and that are required to file a federal estate tax return (federal Form 706 or 706NA), the personal representative must file a Florida Estate Tax Return (Florida form F-706). If you owe Florida estate tax and need more information about the filing requirements, download the Filing Requirements for Florida Estate Tax document available in PDF format.
Estates Not Required to File a Florida Estate Tax Return:
For estates of decedents who do not owe Florida tax and that are not required to file a federal estate tax return (federal Form 706 or 706NA), the personal representative may need to complete an Affidavit of No Florida Estate Tax Due (Florida form DR-312) to remove Florida's automatic estate tax lien. By recording the Affidavit with the court in every Florida county where the decedent owned real property, the property may be disposed of with clear title concerning Florida's estate tax. The Affidavit may also be used for probate purposes.
Estates Required to File a Federal Estate Tax Return (federal Form 706 or 706NA) and the decedent's date of death is AFTER December 31, 2004:
For estates of decedents who do not owe Florida tax but that are required to file a federal estate tax return (federal Form 706 or 706NA), and the decedent's date of death is after December 31, 2004, the personal representative may need to complete an Affidavit of No Florida Estate Tax Due When Federal Return is Required (Florida form DR-313) to remove Florida's automatic estate tax lien. By recording the Affidavit with the court in every Florida county where the decedent owned real property, the property may be disposed of with clear title concerning Florida's estate tax.