The federal estate tax exemption for 2026 is $15,000,000 per person and $30,000,000 per married couple, made permanent by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) signed July 4, 2025. The feared 2025 sunset of the Tax Cuts and Jobs Act (TCJA), which would have cut the exemption to roughly $7,000,000, did not happen.
For 2026, the federal estate and gift tax exemption is $15,000,000 per individual, up from $13,990,000 in 2025, and $30,000,000 per married couple using portability. OBBBA made this exemption permanent, effective January 1, 2026, and indexed for inflation beginning in 2027. A 40% top rate applies only to the amount above the exemption. Fewer than 0.2% of estates owe any federal estate tax.
What changed in 2026: the TCJA sunset that never came
The big 2026 change is that the estate tax exemption went up and became permanent instead of being cut in half. TCJA had temporarily doubled the exemption, reaching $13,990,000 per person in 2025, with those provisions set to expire at the end of 2025. OBBBA, signed July 4, 2025, replaced that scheduled drop with a permanent $15,000,000 exemption effective January 1, 2026.
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Many pages still ranking on this topic were written around the old “use it or lose it” narrative, warning that the exemption would fall to about $7,000,000. That framing is now outdated. The sudden reversion is gone, and planning can happen on a stable, long-term horizon with the exemption indexed for inflation starting in 2027.
2026 estate and gift tax numbers at a glance
The 2026 estate tax exemption is $15,000,000 per person, the top rate on the taxable excess is 40%, and the annual gift tax exclusion is $19,000 per recipient. The table below compares the key federal transfer tax figures for 2025 and 2026 so you can see exactly what OBBBA changed and what stayed the same.
| Provision (federal) | 2025 | 2026 |
|---|---|---|
| Estate, gift, and GST exemption per person | $13,990,000 | $15,000,000 |
| Combined exemption, married couple (portability) | $27,980,000 | $30,000,000 |
| Top estate tax rate on the excess | 40% | 40% |
| Annual gift tax exclusion, per recipient | $19,000 | $19,000 |
| Annual gift exclusion, married gift-splitting | $38,000 | $38,000 |
| Status of the exemption | Scheduled to sunset | Permanent, indexed from 2027 |
The lifetime gift exemption and the estate exemption are unified: they share the same $15,000,000 pool. Taxable gifts you make during life reduce the amount left to shelter your estate at death.
How the federal estate tax works and who owes it
The federal estate tax is a transfer tax on the net value of a person’s taxable estate at death, and it applies only to value above the $15,000,000 exemption. The 40% top rate hits the excess, not the whole estate. Because the threshold is so high, the IRS reports that only a small fraction of estates, fewer than 0.2%, owe any federal estate tax.
Here is a concrete worked example. Consider a single individual who dies in 2026 with a $20,000,000 taxable estate. The first $15,000,000 is covered by the exemption, leaving $5,000,000 exposed. At the 40% top rate, that estate would owe roughly $2,000,000 in federal estate tax, before any state estate tax. An estate at or below $15,000,000 (or $30,000,000 for a married couple using portability) has no federal estate tax to pay.
Large IRAs and estate tax: the double-tax trap for heirs
Large pre-tax IRAs and 401(k)s are especially exposed to layered taxation, and many estate tax explainers skip them entirely. Unlike a taxable brokerage account or real estate, a traditional IRA receives no step-up in basis at death. Heirs inherit the built-in income tax liability, and for very large estates that income tax stacks on top of the 40% estate tax.
An heir who inherits a traditional IRA generally must empty it within 10 years and pays ordinary income tax on every dollar withdrawn. If the estate also exceeded $15,000,000, that same IRA was already reduced by estate tax. This is why coordinating retirement accounts with the estate plan matters even when the estate sits below the exemption.
One approach many retirement-focused families consider is Roth conversion planning. Converting a traditional IRA to a Roth shrinks the pre-tax balance that would otherwise be exposed to both income and estate tax, and it moves assets into a Roth that heirs can inherit income-tax-free within the 10-year window. A conversion is uncapped, taxable as ordinary income in the year you convert, and irreversible, so timing and sizing matter. Our guides on how much of your IRA to convert and the Roth conversion break-even walk through the tradeoffs, and larger conversions can also trigger the net investment income tax considerations in adjacent income. Coordinating conversions with your required minimum distributions in 2026 can help manage the income each year.
Anti-clawback protection for gifts made before 2026
Families who made large gifts under the elevated TCJA exemption are protected by the IRS anti-clawback rule, finalized in 2019 (Treasury Decision 9884). That rule confirms gifts made under a higher exemption are not retroactively pulled back into the taxable estate if the exemption later drops. Because the 2026 exemption rose to $15,000,000 rather than falling, clawback is not a current concern, but the protection remains on the books.
A separate rule, Revenue Procedure 2022-32, gives the estate of a deceased spouse up to five years after death to make a late portability election on Form 706. That extended window helps surviving spouses who did not file promptly still capture the deceased spouse’s unused exemption.
Portability, the annual gift exclusion, and married couples
Married couples can combine their exemptions to shelter up to $30,000,000 in 2026 through portability, and can also give $19,000 per recipient each year outside the exemption. Portability lets a surviving spouse add the deceased spouse’s unused exemption to their own. To claim it, the executor must file an estate tax return (Form 706) within nine months of death (extensions are available), even when no tax is owed.
The annual gift tax exclusion is a separate tool that does not touch the lifetime exemption. Each person can give $19,000 per recipient in 2026 ($38,000 for a married couple using gift-splitting) to any number of people without filing a gift tax return. Over 10 or 20 years, systematic annual gifts can move meaningful value out of a taxable estate while the lifetime exemption stays intact.
States with their own estate tax in 2026
Twelve states plus the District of Columbia levy their own estate tax in 2026, and their thresholds are far lower than the $15,000,000 federal exemption, some as low as $1,000,000. A family with no federal estate tax exposure can still owe state estate tax. The table below lists the states with their own estate tax and approximate 2026 exemption thresholds.
| State | Approx. 2026 exemption | Top state rate |
|---|---|---|
| Oregon | $1,000,000 | 16% |
| Rhode Island | about $1,800,000 | 16% |
| Massachusetts | $2,000,000 | 16% |
| Washington | about $3,000,000 | up to 20% (35% before July 1, 2026) |
| Minnesota | $3,000,000 | 16% |
| Illinois | $4,000,000 | 16% |
| District of Columbia | about $4,900,000 | 16% |
| Maryland | $5,000,000 | 16% |
| Vermont | $5,000,000 | 16% |
| Hawaii | $5,490,000 | 20% |
| Maine | about $7,000,000 | 12% |
| New York | about $7,160,000 | 16% |
| Connecticut | $15,000,000 (matches federal) | 12% |
Thresholds for the inflation-indexed states are approximate 2026 estimates, so families may want to confirm the current figure with the state’s department of revenue. Washington changed its rules for 2026: its exclusion rose to about $3,000,000, and for deaths on or after July 1, 2026, its top rate falls from 35% to 20%, so the rate that applies depends on the date of death. Maryland is the only state that imposes both an estate tax and a separate inheritance tax. Five states (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) impose an inheritance tax paid by certain heirs, which is different from an estate tax. Iowa fully repealed its inheritance tax for deaths on or after January 1, 2025, so it no longer applies.
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Frequently asked questions
What is the estate tax exemption for 2026?
The estate tax exemption for 2026 is $15,000,000 per individual and $30,000,000 per married couple using portability. This is the amount you can transfer at death (or by lifetime gift, since the exemption is unified) before the 40% federal estate tax applies. OBBBA set this figure permanently, effective January 1, 2026, up from $13,990,000 in 2025, indexed for inflation starting in 2027.
Will the estate tax exemption change in 2026?
Yes, it rose to $15,000,000 per person in 2026 from $13,990,000 in 2025, and OBBBA made that level permanent. The change most people feared, a drop to roughly $7,000,000 when TCJA was set to sunset, did not happen. Going forward, the only scheduled change is annual inflation indexing beginning in 2027, not another cut, unless a future Congress amends the law.
How much can you inherit without paying taxes in 2026?
Heirs generally pay no federal income tax simply for receiving an inheritance, and the estate itself owes no federal estate tax unless it exceeds $15,000,000 ($30,000,000 for a married couple). Two exceptions apply: inherited traditional IRAs and 401(k)s are taxed as ordinary income when withdrawn, and five states impose an inheritance tax on certain heirs regardless of estate size.
What is the gift tax exclusion for 2026?
The annual gift tax exclusion for 2026 is $19,000 per recipient, or $38,000 per recipient for a married couple using gift-splitting. You can give that amount to any number of people each year without filing a gift tax return or using any of your $15,000,000 lifetime exemption. Gifts above the annual exclusion reduce your lifetime exemption rather than triggering an immediate tax.
Do I have to pay federal estate tax in 2026?
Only if your taxable estate exceeds $15,000,000 as an individual, or $30,000,000 as a married couple using portability. Below those thresholds there is no federal estate tax. Above them, the 40% top rate applies to the excess: a $20,000,000 single estate, for example, would owe roughly $2,000,000 federally. State estate taxes can apply at much lower thresholds in 13 jurisdictions.
What is portability and how does it work for married couples?
Portability lets a surviving spouse add the deceased spouse’s unused exemption to their own, so a couple can shelter up to $30,000,000 in 2026. To claim it, the executor must file an estate tax return (Form 706) within nine months of death, even if no tax is due (extensions are available, and Revenue Procedure 2022-32 allows a late election up to five years out).
