State-only QTIP election
A state-only qualified terminable interest property (QTIP) election concerns how qualifying property is treated for a state estate tax return. For owners of businesses, real estate and private investments, the rules differ by state and address filing, return attachments and inclusion of QTIP property in a surviving spouse's estate.
How it works
Connecticut requires a state QTIP election on Form CT-706/709, even when the Connecticut taxable estate is at or below the exemption amount. Form CT-706 NT does not make the election.
New York allows a QTIP marital deduction election on a pro-forma federal estate tax return attached to the New York State estate tax return. The state election is irrevocable, and the QTIP property is included in the surviving spouse's estate.
Minnesota recognizes a federal QTIP election only when made on a federally filed estate tax return. Minnesota also allows a separate state-only QTIP election for qualifying property.
Where it shows up for owners of businesses, real estate and private investments
A QTIP election may concern qualifying property included with a state estate tax return. In New York, the return attachment is a pro-forma federal estate tax return.
Points that are easy to confuse
A federal QTIP election and a state-only QTIP election are distinct in Minnesota. Connecticut's required state election uses Form CT-706/709, while New York's state election is irrevocable and includes QTIP property in the surviving spouse's estate.
Thresholds and rates change. Check the state's own current figures.
Common questions
What does New York's state QTIP election mean for the surviving spouse's estate?
New York guidance describes the state QTIP election as irrevocable and includes the QTIP property in the surviving spouse's estate.