Answer (2026): The federal estate and gift tax exemption for 2026 is $15 million per person ($30 million for married couples). The One Big Beautiful Bill Act, signed July 4, 2025, made this threshold permanent. The TCJA sunset to ~$7 million never happened. The annual gift tax exclusion stays at $19,000 per recipient.
Context: If you have a growing estate, hold trusts drafted under older exemption assumptions, or live in a state with its own estate tax, these numbers directly affect your planning.
Action: Map your federal and state exposure, then explore Estate Planning features to organize documents and coordinate with your attorney.
Psychographic target: Primary = complexity-overloaded operator. Secondary = trust-first verifier. Primary objection to close = "I already know the exemption went up."
Last reviewed: March 9, 2026.
- The federal estate and gift tax exemption is $15 million per person for 2026, permanently.
- The annual gift tax exclusion is $19,000 per recipient ($38,000 for married couples splitting gifts).
- Twelve states plus DC have estate taxes with thresholds as low as $1 million (Oregon).
- The generation-skipping transfer (GST) tax exemption is also $15 million per person.
- The top federal estate tax rate remains 40% on amounts exceeding the exemption.
- Estate tax exemption (basic exclusion amount): The amount you can pass to heirs at death before federal estate tax applies. For 2026: $15 million per person.
- Gift tax exemption (lifetime): The cumulative amount you can give away during your lifetime before gift tax kicks in. Unified with the estate exemption at $15 million.
- Annual gift tax exclusion: A separate per-recipient, per-year amount you can give without filing a return or touching your lifetime exemption. For 2026: $19,000.
The estate and gift tax system in the United States works on a unified framework. You get one lifetime exemption, currently $15 million, that covers both gifts you make while alive and assets you leave at death. Think of it as a single bucket: every dollar of taxable gifts reduces what is available to shelter your estate.
The federal government taxes wealth transfers above this threshold at rates up to 40%. Below the threshold, transfers pass tax-free. This is why the exemption amount matters so much. It draws the line between a taxable estate and a non-taxable one.
For 2026, the IRS set the basic exclusion amount at $15 million per individual. A married couple with proper planning can shield up to $30 million from federal estate and gift tax.
Here are all the federal estate and gift tax figures for 2026, sourced from the IRS:
| Item | 2025 | 2026 | Change |
|---|
| Lifetime estate/gift exemption (per person) | $13,990,000 | $15,000,000 | +$1,010,000 |
| Lifetime exemption (married couple) | $27,980,000 | $30,000,000 | +$2,020,000 |
| Annual gift exclusion (per recipient) | $19,000 | $19,000 | No change |
| Annual gift exclusion (married couple, split) | $38,000 | $38,000 | No change |
| Gift to non-citizen spouse (annual) | $190,000 | $194,000 | +$4,000 |
| GST tax exemption (per person) | $13,990,000 | $15,000,000 | +$1,010,000 |
| Top federal estate/gift tax rate | 40% | 40% | No change |
The lifetime exemption and GST exemption moved together. Both jumped to $15 million per person. The annual gift exclusion held steady at $19,000.
This is the context most articles skip, and it matters for understanding where we are.
The Tax Cuts and Jobs Act of 2017 (TCJA) roughly doubled the estate tax exemption from about $5.5 million per person to over $11 million. But the doubling was temporary, set to expire (or "sunset") at the end of 2025. Without congressional action, the exemption would have dropped to approximately $7 million per person in 2026.
That sunset dominated estate planning conversations from 2022 through mid-2025. Families made irrevocable gifts, funded SLATs (spousal lifetime access trusts), created GRATs, and restructured trusts, all to "use it before they lost it."
Then the One Big Beautiful Bill Act was signed on July 4, 2025. It did three things:
- Set the exemption at $15 million per person, higher than the inflation-adjusted TCJA amount of $13.99 million.
- Eliminated the sunset provision. The $15 million threshold has no expiration date.
- Indexed for inflation starting in 2027, using 2025 as the base year for future adjustments.
The practical result: the exemption went up, not down. Households that scrambled to make large gifts before a sunset that did not happen now need to reassess whether those transfers still fit their broader plan.
Tax law is only as permanent as the current Congress. The estate tax exemption has changed multiple times in the past 25 years:
- 2001: $675,000
- 2009: $3.5 million
- 2010: Estate tax repealed for one year
- 2011: $5 million (restored)
- 2018: $11.18 million (TCJA doubling)
- 2025: $13.99 million (inflation-adjusted)
- 2026: $15 million (OBBBA permanent increase)
A future administration could lower the exemption. "Permanent" means there is no built-in expiration, but it does not mean immune to legislative change.
This is one of the most common points of confusion, and getting it wrong can mean filing returns you did not need to file, or worse, not filing when you should have.
The annual gift tax exclusion ($19,000 per recipient in 2026) is a separate, stand-alone amount. You can give $19,000 to as many people as you want, every year, without filing a gift tax return and without touching your $15 million lifetime exemption. If you are married and both spouses agree to split gifts, the limit is $38,000 per recipient.
The lifetime gift and estate tax exemption ($15 million) only gets used when you exceed the annual exclusion for a specific recipient. If you give someone $100,000 in a single year, the first $19,000 is covered by the annual exclusion. The remaining $81,000 counts against your $15 million lifetime exemption. You will need to file IRS Form 709 to report it, but you will not owe tax unless your cumulative lifetime gifts exceed $15 million.
Key distinction: Annual exclusion gifts are "free." They cost nothing against your lifetime limit. Lifetime gifts above the annual exclusion reduce what is left to shelter your estate at death.
If your spouse is not a U.S. citizen, the unlimited marital deduction does not apply to gifts. Instead, there is a separate annual exclusion: $194,000 for 2026 (up from $190,000 in 2025). Gifts above this amount count against the lifetime exemption.
The GST tax is a second layer of federal transfer tax that applies when you transfer assets to someone two or more generations below you, typically grandchildren. Without the GST exemption, a grandparent leaving $20 million directly to grandchildren could face both estate tax and GST tax on the same transfer.
For 2026, the GST exemption is $15 million per person, matching the estate tax exemption. The GST tax rate is 40% on transfers that exceed the exemption.
Two critical differences from the estate tax exemption:
- No portability. Unlike the estate tax exemption, you cannot transfer your unused GST exemption to a surviving spouse. Each spouse must use their own $15 million independently.
- Allocation matters. GST exemption must be allocated to specific trusts or transfers, either on Form 709 (for lifetime transfers) or Form 706 (at death). Incorrect allocation can result in unexpected tax exposure decades later.
If you have dynasty trusts, generation-skipping trusts, or direct transfers to grandchildren, confirm your GST allocations are current and correctly applied.
The federal exemption is $15 million. But twelve states and the District of Columbia impose their own estate taxes with thresholds far lower. If you live in one of these states (or own real estate there), state estate tax may be your primary concern, not the federal tax.
| State | Exemption | Top Rate | Notes |
|---|
| Oregon | $1,000,000 | 16% | Lowest threshold in the country |
| Rhode Island | ~$1,838,000 | 16% | Indexed for inflation |
| Massachusetts | $2,000,000 | 16% | Not indexed |
| Washington | ~$3,076,000 | 20% | Highest top rate alongside Hawaii |
| Minnesota | $3,000,000 | 16% | Not indexed |
| Illinois | $4,000,000 | 16% | Flat threshold |
| District of Columbia | ~$4,988,000 | 16% | Indexed |
| Maryland | $5,000,000 | 16% | Also imposes inheritance tax |
| Vermont | $5,000,000 | 16% | Flat threshold |
| Hawaii | ~$5,490,000 | 20% | Set by 2019 legislation |
| Maine | ~$7,000,000 | 12% | Indexed |
| New York | $7,350,000 | 16% | Cliff: estates over 105% of exemption lose the entire exclusion |
| Connecticut | $15,000,000 | 12% | Only state matching the federal exemption |
New York's cliff rule deserves special attention. If your taxable estate exceeds 105% of the New York exemption ($7,717,500 in 2026), the entire exemption disappears and your full estate is taxable from the first dollar. A $7.4 million estate pays zero New York estate tax. A $7.8 million estate could owe tax on the full $7.8 million.
Six states impose inheritance taxes, which tax the recipient rather than the estate: Iowa (phasing out), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state that imposes both an estate tax and an inheritance tax. Inheritance tax rates typically vary based on the beneficiary's relationship to the deceased. Close relatives pay lower rates or are exempt entirely.
The permanent $15 million exemption changes the planning calculus. Strategies that made sense under "use it or lose it" pressure may need adjustment now that the exemption is stable (and larger).
Credit shelter trusts (bypass trusts) were designed when the exemption was $5 million or less. At $15 million per person, with portability allowing a surviving spouse to inherit the unused exemption, many bypass trust provisions add complexity without tax benefit. Worse, assets in a bypass trust miss the second step-up in basis at the surviving spouse's death, potentially creating capital gains tax exposure.
Ask your attorney: Should the bypass trust be restructured, converted to a disclaimer trust, or replaced with portability?
Portability, the ability to use a deceased spouse's unused exemption, is what makes the $30 million combined exemption work. But it requires filing IRS Form 706 for the deceased spouse, even if no estate tax is owed.
If a spouse died and Form 706 was not filed, the surviving spouse's exemption is $15 million, not $30 million. Revenue Procedure 2022-32 extended the portability election deadline to five years after the decedent's death. Confirm with your estate attorney or CPA whether the filing was made.
Irrevocable gifts made between 2023 and mid-2025 cannot be undone. But the rationale behind them shifted. If the gift was designed to "lock in" the exemption before a drop that did not happen, evaluate whether:
- The transfer created income tax costs (loss of step-up in basis) that now outweigh the estate tax benefit.
- Remaining lifetime exemption is sufficient without further gifting.
- The anti-clawback rule (Treasury Regulation 20.2010-1(c)) protects those gifts if the exemption ever decreases in the future.
If your estate exceeds your state's threshold, even if it falls well below $15 million, state estate tax planning is your primary focus. Strategies include:
- Establishing domicile in a state without an estate tax.
- Using credit shelter trusts specifically to offset state estate tax (even if unnecessary federally).
- Reviewing real property ownership in estate-tax states. Some states tax real estate situated within their borders regardless of your domicile.
With the exemption stable at $15 million, there is less urgency to make large irrevocable transfers. Annual exclusion gifts ($19,000 per recipient, $38,000 for married couples) offer a steady, low-risk approach to wealth transfer that does not reduce your lifetime exemption at all.
For larger families, annual exclusion gifts add up. A married couple with three children and six grandchildren can transfer $342,000 per year ($38,000 times 9 recipients) without filing a single gift tax return.
At $15 million, the GST exemption supports larger dynasty trust funding and direct transfers to grandchildren. If you have existing GST-exempt trusts, they may have room for additional allocations. New trusts can hold more assets free from estate tax across multiple generations.
Remember: GST exemption is not portable. Each spouse must allocate independently.
| Form | Purpose | When to file |
|---|
| Form 706 | Estate tax return | Within 9 months of death (6-month extension available). Also required to elect portability. |
| Form 709 | Gift tax return | By April 15 of the year after the gift. Required when gifts to a single recipient exceed $19,000, or when electing gift splitting. |
| Form 8971 | Information about beneficiaries acquiring property from a decedent | Filed alongside Form 706 for estates required to file. |
Filing Form 709 does not necessarily mean you owe tax. Most filers simply report the gift against their lifetime exemption. But the form creates a record the IRS uses to track cumulative usage, and skipping it when required is a compliance issue that can surface years later.
Estate planning produces a stack of documents: trusts, wills, beneficiary forms, gift tax returns, powers of attorney, property deeds. The challenge is rarely creating these documents. It is tracking them, keeping them current, and getting them to the right professional at the right time.
X1 provides the coordination layer:
- Document Vault stores estate documents with version history and sharing controls, so your attorney, CPA, and financial advisor work from the same source of truth.
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- Advisor Packets bundle relevant documents and financial context into shareable packages for professional handoff, so your estate attorney gets what they need before the meeting, not during it.
- Family Office Blueprint captures your family's values, governance preferences, and decision framework, the qualitative inputs that shape how the numbers should work.
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You can give $19,000 per recipient per year (the annual exclusion) without filing a gift tax return or reducing your lifetime exemption. Beyond that, you can use your $15 million lifetime exemption for larger gifts. No tax is owed until cumulative taxable gifts exceed $15 million. A married couple can collectively give up to $38,000 per recipient annually and shield up to $30 million in lifetime gifts.
You will owe zero federal estate tax. However, if you live in a state with its own estate tax (Oregon, Massachusetts, New York, etc.), you may still owe state estate tax if your estate exceeds that state's threshold, which can be as low as $1 million.
It has no sunset provision, unlike the TCJA doubling that was set to expire. In statutory terms, it is permanent. In practical terms, a future Congress could change it. The exemption has been modified repeatedly since 2001. Build your plan to work at $15 million but stay flexible if the number moves.
Only if a gift to a single recipient exceeds $19,000 in a calendar year, or if you and your spouse want to elect gift splitting. Gifts below the annual exclusion do not need to be reported.
Estate tax is paid by the estate before assets are distributed. Inheritance tax is paid by the person receiving the inheritance. The federal government imposes only estate tax. Six states impose inheritance taxes: Iowa (phasing out), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Yes, through portability. If your spouse dies and does not use their full $15 million exemption, the unused portion transfers to you, but only if IRS Form 706 is filed for the deceased spouse. Without the filing, the unused exemption is lost. Portability does not apply to the GST exemption.
Review estate documents for sunset-contingent language. Confirm portability election (Form 706) for any deceased spouse. Map state estate tax exposure. Evaluate whether existing trust structures still make sense at the $15 million level. Coordinate annual exclusion gifts. Meet with your estate attorney to discuss whether the permanent exemption changes your gifting timeline.
Map your federal and state exposure, then explore Estate Planning features to organize your documents and coordinate next steps through your Family Office Blueprint.
This guide is for informational and planning purposes only. It does not constitute tax, legal, or investment advice. Estate and gift tax rules are complex and vary by state. All planning decisions should be reviewed with qualified professionals, including an estate planning attorney, CPA, and financial advisor. Federal and state tax laws are subject to change.
