Estate and Gift Tax 2026: $15M Exemption, Calculator
Federal Estate and Gift Tax 2026: The $15 Million Exemption, Rates, Portability and a Calculator
The 2026 exclusion, the 40% rate, the annual gift exclusion, portability, state estate and inheritance taxes, basis step-up, and a federal estate tax estimator.
For people who die in 2026, the federal estate tax applies only to the part of an estate above a $15,000,000 basic exclusion per person, according to the IRS, and the top rate is 40%. The annual gift tax exclusion for 2026 is $19,000 per recipient. A surviving spouse can, through a timely filed Form 706, claim a deceased spouse's unused exclusion (portability). Separately, 12 states and Washington, D.C. levy their own estate taxes, often with much lower thresholds, and five states have an inheritance tax. The calculator below estimates the federal tax from your own numbers.
Searches for estate tax tend to jump when exemption amounts change, and the 2026 change was a large one: the IRS lists the basic exclusion for deaths in 2026 at $15 million per person, up from $13.99 million in 2025. This guide explains how the federal estate and gift tax fits together, what the 2026 figures are, how portability and state taxes work, and gives you a calculator for a rough federal estimate. It is a map of the rules, not a plan for your family.
1. How the Federal Estate Tax Works
The IRS describes the estate tax as a tax on your right to transfer property at your death. It looks at the "gross estate," which the IRS defines as everything you own or have certain interests in at death, valued at fair market value rather than what you paid. Certain deductions are subtracted, including property passing to a surviving spouse, charities, debts and expenses. Taxable gifts made during life are added back, and the total is reduced by the unified credit that corresponds to the basic exclusion amount.
In practice that means the tax is owed only on the amount by which the taxable estate plus adjusted lifetime taxable gifts exceeds the exclusion. The IRS adds that all property in the gross estate that passes to a surviving spouse is eligible for the marital deduction, with some qualifications on how it passes.
2. The 2026 Numbers
| Item | 2026 figure | Source note |
|---|---|---|
| Basic exclusion amount (deaths in 2026) | $15,000,000 per person | IRS "What's new: estate and gift tax"; 2025 was $13,990,000 |
| Top estate and gift tax rate | 40% | IRS notes the top bracket has been 40% since 2013 |
| Annual gift tax exclusion | $19,000 per recipient | IRS; unchanged from 2025 |
| Estate tax return | Form 706, due nine months after death | Six-month extension available with Form 4768 |
| Marital deduction | Unlimited for qualifying property | Passing outright to a spouse is eligible |
The IRS explains that the 2026 amount comes from the law signed on July 4, 2025 (Public Law 119-21, the "Working Families Tax Cuts" bill, also called the One Big Beautiful Bill Act), which set the basic exclusion at $15 million for 2026. The sources we reviewed did not give a 2027 figure, so we make no claim about it here. We will update this page when the IRS publishes one.
3. Estate Tax Calculator
Enter your estimate of the gross estate and any deductions. Include lifetime taxable gifts (gifts above the annual exclusion that used part of your exclusion) and, if you are a surviving spouse, any unused amount from a deceased spouse that was properly elected. Use 0 where an item does not apply.
🧮 Federal Estate Tax Estimator
| Gross estate (no deductions) | Federal tax | Average rate |
|---|
With the default $20 million estate and no deductions, the estimate is $2,000,000: 40% of the $5 million above the $15 million exclusion. If the same estate passes entirely to a surviving spouse, the marital deduction can remove it from the first estate's taxable base, which is why the calculator lets you enter that amount.
4. Gift Tax and the Annual Exclusion
Gifts and estates share one system. You can give up to $19,000 per recipient in 2026 without it counting against your lifetime exclusion or requiring a gift tax return. Larger gifts generally require Form 709 and reduce the exclusion left for your estate, but they typically do not trigger tax until the lifetime total passes the basic exclusion. Direct payments of someone's tuition or medical bills to the provider, and gifts between spouses who are U.S. citizens, have their own rules. Confirm filing dates and conditions in the Form 709 instructions.
5. Portability for Married Couples
The IRS states that estates of decedents survived by a spouse may elect to pass any unused exclusion to the surviving spouse. The election is made by filing a timely Form 706, and a return is required to make it even if the estate is below the filing threshold. The IRS adds that a late election may be possible within five years of death under Revenue Procedure 2022-32 when the estate was not otherwise required to file. Portability does not carry over a state exemption, and it does not apply to the generation-skipping tax.
6. State Estate and Inheritance Taxes
Federal numbers are only part of the picture. According to a 2026 summary from Creative Planning, twelve states and the District of Columbia have a state estate tax, and several start well below the federal level:
| Jurisdiction | 2026 exemption | Jurisdiction | 2026 exemption |
|---|---|---|---|
| Oregon | $1,000,000 | Hawaii | $5,490,000 |
| Massachusetts | $2,000,000 | Maine | $7,160,000 |
| Minnesota | $3,000,000 | New York | $7,350,000 |
| Washington | About $3,000,000 (changed July 1, 2026) | Connecticut | $13,600,000 |
| Illinois | $4,000,000 | Rhode Island | $1,838,000 |
| Maryland | $5,000,000 | Vermont | $5,000,000 |
| District of Columbia | $4,988,400 |
These figures come from a secondary source and legislatures change them, so check your state's revenue department. Some states also tax the heirs rather than the estate (see section 8).
7. Basis Step-Up and Other Details
- Basis step-up. The IRS notes that under section 1014 the basis of property acquired from a decedent is generally its fair market value at the date of death, which often means little or no taxable gain if the heir sells soon after. Gifts made during life usually carry the giver's basis instead.
- Retirement accounts. IRAs and 401(k)s are part of the gross estate and pass by beneficiary designation, not by will. They are also income in respect of a decedent for the heir. See our 401(k) and IRA guide.
- Life insurance. Proceeds can be included in the gross estate if the insured owned the policy. Our life insurance coverage explains policy types.
- Valuation. Real estate, business interests and collectibles need appraisals, and values drive the result.
8. Estate Tax vs Inheritance Tax
An estate tax is charged on the estate before assets are distributed. An inheritance tax is charged to the person who receives the assets, often at rates that depend on the relationship to the deceased. The federal government has no inheritance tax. According to the same Creative Planning summary, five states have one, and spouses and certain close relatives are often exempt or taxed at lower rates:
- Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. The summary lists exemptions that depend on relationship, from small fixed amounts to 0% for some close relatives. Pennsylvania has no blanket exemption but taxes surviving spouses, minor children and some parents at 0%.
- Maryland appears on both lists, with an estate tax and an inheritance tax.
9. What Planning Commonly Involves
People with larger or more complex estates commonly discuss a handful of topics with an attorney. This list describes common topics only and is not a recommendation:
- Wills, trusts and beneficiary designations, covered in our estate planning guide to wills and trusts.
- Use of the annual gift exclusion and larger lifetime gifts.
- Whether a portability election is worth filing for a surviving spouse.
- State exemptions that are lower than the federal one.
- Liquidity: how taxes would be paid within nine months.
For the broader tax picture see our tax planning hub.
10. Checklist and Common Mistakes
- Assuming $15 million is a household figure. It is per person, and portability must be elected.
- Ignoring state rules. A state exemption can be a fraction of the federal one.
- Forgetting non-probate assets. Accounts, policies and jointly owned property can count toward the gross estate.
- Skipping the portability return when a spouse dies below the threshold.
- Assuming the law is frozen. The 2027 and later amounts and future legislation can differ from 2026.
- Treating a calculator as an appraisal. Valuation and deductions drive the answer.
11. Frequently Asked Questions
The IRS lists the basic exclusion amount for deaths in 2026 as $15,000,000 per person, up from $13,990,000 in 2025. Only the part of an estate above the exclusion, after deductions and with lifetime taxable gifts added, is subject to federal estate tax.
The top federal estate and gift tax rate is 40%. Because the exclusion is far above the lowest bracket, the amount over the exclusion is effectively taxed at 40%.
For 2026 the annual gift tax exclusion is $19,000 per recipient. Gifts above that generally require a gift tax return and reduce the lifetime exclusion, but tax is usually not due until the lifetime total exceeds the basic exclusion.
Portability lets a surviving spouse use any unused part of a deceased spouse's exclusion. It is elected on a timely filed Form 706, and the IRS says a return is required to make the election even when the estate is under the filing threshold.
According to a 2026 summary, twelve states and Washington, D.C. have an estate tax (Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington), and five states have an inheritance tax (Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania). Verify current thresholds with the state.
It depends on the asset. Property that receives a basis step-up under section 1014 often has little taxable gain if sold soon after death, while pre-tax retirement accounts generally produce taxable income when withdrawn.
The IRS states that the estate tax return is due nine months after the date of death, and an automatic six-month extension is available by filing Form 4768 by the original due date.
No. The federal government taxes the estate, not the heirs. A handful of states tax the people who inherit.
12. Update Archive
✅ Key Takeaways
- 2026 federal basic exclusion: $15,000,000 per person; top rate 40%; annual gift exclusion $19,000.
- Only the amount above the exclusion is taxed, after deductions and with lifetime taxable gifts added.
- Portability must be elected on a timely Form 706.
- States may tax estates at much lower thresholds, and five have inheritance taxes.
- Basis step-up and beneficiary designations matter for heirs.
- A calculator is an illustration; an estate attorney can apply the rules to your facts.
Official Resources & Further Reading
📎 Sources & References
- Internal Revenue Service, What's new: Estate and gift tax ($15,000,000 for 2026; $19,000 annual exclusion)
- IRS, Frequently asked questions on estate taxes (portability, basis, due date)
- IRS, Estate tax (definition and gross estate)
- Creative Planning, 2026 State Estate and Inheritance Taxes (secondary source for state thresholds)