Federal Estate Tax Calculator

OBBBA (signed July 2025) made the higher exemption permanent and raised it to approximately $15 million per person for 2026 (indexed to inflation); the TCJA sunset that would have cut it to ~$7 million never took effect. Married couples can effectively double that to ~$30 million with proper portability planning. Estates above the exemption pay 40% federal tax on the excess.

Portability lets a surviving spouse "inherit" the unused portion of a deceased spouse's estate-tax exemption (called the Deceased Spousal Unused Exclusion, or DSUE). It must be elected by filing Form 706 within 9 months of death (15 months with extension) - even when no tax is due. Skipping the filing forfeits the DSUE permanently, which can cost the family millions later.

Form 706 (U.S. Estate Tax Return) is required when the gross estate plus adjusted taxable gifts exceeds the basic exclusion amount (~$15M in 2026). It is also filed to elect portability even if no tax is due. The form is due 9 months after death; a 6-month extension is available. Penalties for late filing apply to any unpaid tax.

Transfers to a US citizen spouse pass estate-tax-free under the unlimited marital deduction. Transfers to a non-citizen spouse do NOT qualify - those use a separate $194,000 annual exclusion (2026) or require a Qualified Domestic Trust (QDOT). Planning gets significantly more complex when one spouse is non-citizen.

Yes. Currently 12 states plus the District of Columbia levy their own estate tax, with lower exemptions (as low as $1 million in Oregon; Massachusetts raised its threshold to $2 million) and rates up to 35%. They are CT, HI, IL, MA, MD, ME, MN, NY, OR, RI, VT, WA, and DC.

Partly. Lifetime gifts above the annual exclusion ($19,000 per recipient in 2026) use up your unified exemption, but gifts within the annual exclusion do permanently remove value from your estate. Separately, the IRC §2035 three-year rule does not pull back ordinary gifts - it mainly re-includes life insurance transfers (and certain retained powers) made within the 3 years before death, adding them back to the taxable estate. These are two distinct rules: do not confuse the general removal of gifts with the 3-year clawback on life insurance.

IRAs and retirement plans are included in the decedent's taxable estate. However, if the beneficiary is the surviving spouse, the unlimited marital deduction applies and there is no estate tax at that point. The tax is deferred until the surviving spouse's death.