Important: This article is general educational information, not tax or legal advice. Tax law changes, and state rules differ from federal rules. Confirm current figures with the IRS or a licensed CPA or attorney.
Quick answer: For people who die in 2026, the federal estate tax exemption is $15 million per person, or $30 million for a married couple that elects portability. Only the value above the exemption is taxed, at a top rate of 40%. Most estates owe no federal estate tax.
What Is the Federal Estate Tax Exemption?
The exemption (the IRS calls it the «basic exclusion amount») is the amount of wealth a person can pass on at death, or give away during life, before federal transfer tax applies. The estate tax and the gift tax share one unified exemption, so taxable gifts you make during life use up part of the amount available at death (Taxstra; 26 U.S.C. §2010).
2026 Estate Tax Numbers at a Glance
| Item | 2026 amount |
|---|---|
| Exemption per person | $15,000,000 |
| Exemption for a married couple (with portability) | $30,000,000 |
| Top federal rate | 40% on value above the exemption |
| 2025 exemption (for comparison) | $13,990,000 |
| Annual gift tax exclusion | $19,000 per recipient |
The One Big Beautiful Bill Act set the $15 million figure in law and removed the scheduled drop in the exemption that had been expected after 2025. Inflation indexing starts in 2027 (Farrell Fritz; Taxstra; Bowditch & Dewey).
How the Tax Is Calculated
- Add up the gross estate. This is everything the person owned or controlled at death, valued at fair market value: real estate, bank and brokerage accounts, retirement accounts, business interests, assets in a revocable trust, and life insurance the person owned.
- Subtract deductions. Debts, funeral and administration costs, property passing to a U.S. citizen spouse (unlimited marital deduction), and charitable gifts reduce the taxable estate.
- Add certain lifetime gifts. Taxable gifts made during life are counted against the exemption.
- Apply the exemption. Only the amount above $15 million is taxable.
Illustrative example: A single person dies in 2026 with a taxable estate of $16.5 million and no prior taxable gifts. The amount above the exemption is $1.5 million, and at 40% the federal estate tax would be about $600,000. The statute lists graduated rates starting at 18%, but those brackets top out within the first $1 million of taxable transfers, so after the exemption nearly every taxable dollar is taxed at 40% (Taxstra). This example is simplified and not a substitute for a professional calculation.
What Counts Toward the $15 Million?
- Life insurance: if the person owned the policy, the full death benefit is generally included, not just the cash value (26 U.S.C. §2042).
- Retirement accounts: IRAs and 401(k)s are included at their value at death.
- Revocable living trusts: they avoid probate, but they do not avoid estate tax.
- Real estate and businesses: valued at fair market value, often requiring an appraisal.
Portability for Married Couples
When the first spouse dies, any unused exemption can pass to the surviving spouse. This «portability» election is made on a timely filed Form 706, even if no tax is due. A late election may be possible for some estates within five years of death under IRS Rev. Proc. 2022-32 (IRS). Learn more in Form 706: Who Must File and When.
State Estate Taxes Can Be Lower
Twelve states and the District of Columbia have their own estate tax, and some thresholds start at $1 million, far below the federal level. An estate can owe no federal tax and still owe state tax. See states with an estate tax in 2026.
Frequently Asked Questions
What is the federal estate tax exemption for 2026?
$15 million per person and $30 million for a married couple using portability.
Will I owe estate tax if my estate is under $15 million?
Not federal estate tax. You could still face state estate or inheritance taxes depending on where you lived or owned property.
Does the exemption apply to gifts too?
Yes. The estate and gift tax exemption is unified. Read Gift Tax vs. Inheritance.
Is the exemption indexed for inflation?
Indexing is scheduled to begin in 2027, according to current law.
Related Guides
- Inheritance Tax vs. Estate Tax: What’s the Difference?
- Form 706: Who Must File and When
- Step-Up in Basis: How It Saves Heirs Money
Sources
- IRS: Tax inflation adjustments for tax year 2026
- IRS: Instructions for Form 706
- IRS: Rev. Proc. 2022-32 (late portability election)
- 26 U.S.C. §2010: Unified credit against estate tax
- Additional references consulted (not linked): 26 U.S.C. §2042, Bowditch & Dewey, Farrell Fritz, and Taxstra, 2025 to 2026 publications on the federal estate tax.
How We Prepared This Article
We start with primary sources, such as the IRS and the Internal Revenue Code, and then compare figures with reputable secondary publications. Dollar amounts, deadlines, and state rules are reviewed at least twice a year and whenever the law changes. This website is an educational publisher, not a law firm or CPA firm.
When to Get Professional Help
Talk to a licensed estate attorney or CPA if your estate may approach the exemption, if you are a surviving spouse deciding on portability, or if you are an executor facing a filing deadline.
Keep Reading
- What Is Probate? How It Works Step by Step
- Revocable vs. Irrevocable Trust
- What Does an Executor Do? Duties and Pay
Last reviewed: October 4, 2026
Next review due: April 4, 2027
Disclaimer: This content is for general information only and is not tax or legal advice. Federal and state laws change. Consult a licensed CPA or attorney about your situation.