What is a Tax Waiver?

A tax waiver is a document that shows that taxes have been paid or taxes didn’t have to be paid.  When a tax return is filed with the state then the state will issue tax waivers saying that all of the taxes have been paid or they didn’t have to be paid.  In certain situations, however, the executor can prepare a self executed tax waiver that says that certain requirements have been met by the estate and no taxes are due.  These waivers are needed to get money from financial institutions or to get the proceeds from the sale of real estate. For example, if the decedent had a bank account at the time of his passing then the bank is only supposed to release one-half of the funds in the account until a tax waiver is produced.  Another example is the sale of real estate – if you sell real estate but don’t have a tax waiver for the property then the title company is supposed to hold funds back in escrow until a tax waiver issued by the state is produced to them indicating that either all taxes were paid or none were owed.