Federal Estate Tax
Overview
The federal estate tax is a tax on the transfer of property upon death. It is imposed by the Internal Revenue Service (IRS) on the estate of a deceased person before assets are distributed to beneficiaries. The federal estate tax applies to all U.S. citizens and residents, regardless of which state they live in.
In addition to the federal estate tax, 13 jurisdictions impose their own state-level estate tax. Estates in those states may owe both federal and state estate tax. See our state estate tax hub for details on each state.
2026 Federal Estate Tax Exemption
For 2026, the federal estate tax exemption is approximately $13.99 million per individual. This means that estates valued at or below this amount are not subject to the federal estate tax. Married couples can effectively shield up to approximately $27.98 million through portability of the unused exemption.
The current elevated exemption is a result of the Tax Cuts and Jobs Act of 2017 (TCJA), which roughly doubled the exemption from its previous level. The exemption is adjusted annually for inflation. The TCJA's elevated exemption was originally scheduled to sunset after 2025, potentially reverting to approximately $7 million (adjusted for inflation). Tax legislation may extend or modify this provision — consult a tax professional for the most current information.
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Federal Estate Tax Rates
The federal estate tax uses a graduated rate structure with rates ranging from 18% to 40%. The top rate of 40% applies to taxable amounts exceeding $1 million above the exemption. In practice, because of the high exemption amount, most estates that owe federal estate tax are subject to rates at or near the top rate.
| Taxable Amount | Tax Rate |
|---|---|
| $0 – $10,000 | 18% |
| $10,001 – $20,000 | 20% |
| $20,001 – $40,000 | 22% |
| $40,001 – $60,000 | 24% |
| $60,001 – $80,000 | 26% |
| $80,001 – $100,000 | 28% |
| $100,001 – $150,000 | 30% |
| $150,001 – $250,000 | 32% |
| $250,001 – $500,000 | 34% |
| $500,001 – $750,000 | 37% |
| $750,001 – $1,000,000 | 39% |
| Over $1,000,000 | 40% |
Source: IRS.gov
IRS Form 706
The federal estate tax return is filed on IRS Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return). Form 706 must be filed if the gross estate, plus adjusted taxable gifts, exceeds the filing threshold (which is equal to the exemption amount).
The form is due 9 months after the date of death. An automatic 6-month extension of time to file may be obtained by filing Form 4768, but the extension does not extend the time to pay any tax due.
Even if no tax is owed, Form 706 may need to be filed to elect portability of the unused exemption to a surviving spouse. For forms and instructions, visit the IRS Form 706 page.
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Portability
The federal estate tax allows portability of the deceased spousal unused exclusion (DSUE) amount. This means that when the first spouse dies, any unused portion of their estate tax exemption can be transferred to the surviving spouse by filing Form 706, even if no tax is owed.
Portability is available only at the federal level. Most states that impose their own estate tax do not offer portability of the state exemption. This makes proper estate planning particularly important for residents of states with their own estate tax.
States with Their Own Estate Tax
In addition to the federal estate tax, the following 13 jurisdictions impose their own estate tax:
Official Resources
This information is provided for educational purposes only and should not be considered legal or tax advice. Consult a qualified tax professional for guidance specific to your situation.