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The federal estate tax exemption in 2026
How much an estate can pass free of federal estate tax, and how the tax is figured above that amount.
Federal estate tax estimate
Estimated federal estate tax
$1,200,000
40% of $3,000,000 above the exclusion
- Exclusion available$15,000,000
- Estate plus lifetime gifts$18,000,000
- Amount above the exclusion$3,000,000
Simplified: assumes no gift tax paid earlier and no state estate tax. A Form 706 is required when the gross estate exceeds the exclusion, and to pass unused exclusion to a spouse.
For people dying in 2026, the federal estate tax basic exclusion is $15,000,000, set by section 70106 of Public Law 119-21 and confirmed by Rev. Proc. 2025-32 ($13,990,000 for 2025 deaths). The amount will be indexed for inflation from 2027 instead of falling by roughly half, as it was scheduled to under the 2017 law. Only the part of a taxable estate, plus lifetime taxable gifts, above the exclusion is taxed, at a top rate of 40%: an estate of $18,000,000 with no prior taxable gifts owes about $1,200,000. Married couples can effectively double the exclusion: the unused exclusion of the first spouse to die passes to the survivor when the executor elects portability on a timely estate tax return, so a couple can shelter up to $30,000,000; a widow with $25,000,000 and her late husband's full unused exclusion would owe $0. Property left to a US citizen spouse or to charity is deducted before the tax. Some states levy their own estate or inheritance taxes with far lower thresholds.
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Exclusion amounts and what they mean
| Year of death | Basic exclusion | With a spouse’s full unused exclusion |
|---|---|---|
| 2025 | $13,990,000 | $27,980,000 |
| 2026 | $15,000,000 | $30,000,000 |
How the tax is figured
The estate tax applies a graduated table to the taxable estate plus adjusted taxable gifts made after 1976, then subtracts a credit equal to the tax on the basic exclusion. Because the exclusion is far above the levels where the lower rates apply, everything above the exclusion ends up taxed at 40%. The calculator uses that shortcut, which is exact when the exclusion is fully available. The taxable estate is the gross estate (everything owned at death, life insurance owned by the deceased, retirement accounts) minus debts, funeral and administration costs, the marital deduction and the charitable deduction.
| Taxable estate | 2025 death | 2026 death |
|---|---|---|
| $10,000,000 | $0 | $0 |
| $14,000,000 | $4,000 | $0 |
| $16,000,000 | $804,000 | $400,000 |
| $20,000,000 | $2,404,000 | $2,000,000 |
| $30,000,000 | $6,404,000 | $6,000,000 |
Who must file Form 706
An estate tax return is required when the gross estate plus adjusted taxable gifts exceeds the basic exclusion for the year of death, whether or not tax is owed after deductions. It is also needed, even for a small estate, when the surviving spouse wants the unused exclusion through portability. The return lists cumulative lifetime taxable gifts, which is why keeping each year's Form 709 matters. State estate taxes are separate and often start far lower.
Gifts, the step-up and the generation-skipping tax
Lifetime gifts and the estate share the exclusion, see the gift tax page. Assets passed at death generally receive a new cost basis equal to their value at death, which erases the built-in capital gain, while gifted assets keep the donor's basis. The generation-skipping transfer tax exemption, for transfers to grandchildren and later generations, also equals $15,000,000 for 2026 under Rev. Proc. 2025-32.
Sources: IRS: What's new, estate and gift tax; IRS Rev. Proc. 2025-32: 2026 inflation-adjusted items and 2025 items modified by Public Law 119-21 (October 9, 2025); Public Law 119-21 (July 4, 2025), Title VII, Subtitle A: sections 70101 to 70120 and 70424 to 70425, read on October 11, 2026.