Also, many people mistakenly refer to the federal estate tax as inheritance tax, but they are not synonymous. Estate tax is typically paid by the estate after the death of the individual, and inheritance tax could be imposed on some beneficiaries, depending on state law. Familiarizing yourself with the ins and outs of inheritance tax and estate taxation will allow families to plan for financial obligations. Do you have to pay taxes on inheritance, the answer is yes, but depends on a number of factors.