How Much Is the Federal Estate Tax?
In 2026 the federal estate tax applies only to estates above $15 million per person, or $30 million for a married couple using portability. The top rate on the amount above the exemption is 40%. The 2025 budget law made the higher exemption permanent and indexed for inflation. Gifts up to $19,000 per recipient per year do not use any exemption, and twelve states plus DC have their own estate taxes.
Very few estates owe federal estate tax, but those that do can owe a lot. Here are the 2026 numbers.
The 2026 figures
| Item | 2026 amount |
|---|---|
| Basic exclusion (estate and lifetime gift) | $15,000,000 per person |
| Married couple with portability | $30,000,000 |
| Top estate tax rate | 40% |
| Annual gift exclusion | $19,000 per recipient |
| Annual exclusion for gifts to a non-citizen spouse | $194,000 |
Figures reported by Morgan Lewis based on IRS announcements; the 2025 budget law set the $15 million exemption permanently with inflation indexing.
How it works
- Add up the gross estate: everything owned at death, including real estate, investments, retirement accounts, business interests and life insurance owned by the deceased.
- Subtract deductions: debts, expenses, charitable gifts, and everything left to a US citizen spouse (the unlimited marital deduction).
- Add taxable lifetime gifts above the annual exclusion.
- Apply the unified credit for the exclusion amount (26 U.S.C. 2010). Tax is due only on the excess.
Portability for married couples
When the first spouse dies, the executor can elect to transfer the unused exemption to the surviving spouse by filing an estate tax return, even if no tax is owed. Missing that election can waste millions in exemption (IRS).
Filing
An estate tax return (Form 706) is generally due nine months after death, with an extension available. It is required when the gross estate plus taxable gifts exceeds the filing threshold, and is needed to elect portability.
State estate taxes
As of 2026, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington, plus DC, have estate taxes, many with exemptions far below the federal amount, some as low as about $1 million to $2 million (Creative Planning). Some states also have inheritance taxes; see taxes on an inheritance.
Planning tools
Lifetime gifting, irrevocable trusts, charitable trusts, life insurance trusts and business succession planning can reduce estate taxes. These require professional advice.
Talk to an estate planning lawyer and a tax advisor if your estate may approach federal or state thresholds.
Sources
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This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Laws differ by state and change over time; talk to a licensed attorney in your state about your situation.