Estate Tax Calculator
Calculate federal and state estate taxes, exemptions, and strategies to minimize estate tax liability.
The deceased spouse's unused exclusion (DSUE) can be added to the surviving spouse's exemption, potentially doubling it to $27.22 million.
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About This Calculator
The Estate Tax Calculator helps you estimate the federal and state taxes that may be owed on an estate after death, along with strategies to minimize this liability. Estate taxes, sometimes called "death taxes," are levied on the transfer of property from a deceased person to their heirs. Understanding how estate taxes work is crucial for anyone with significant assets, as proper planning can save families hundreds of thousands or even millions of dollars in taxes. The federal estate tax exemption for 2026 is $13.61 million per individual ($27.22 million for married couples using portability), meaning most Americans will never owe federal estate tax. However, twelve states and the District of Columbia impose their own estate taxes with much lower exemption thresholds, and six states have separate inheritance taxes. This calculator accounts for both federal and state-level taxes, the unlimited marital deduction, portability elections, charitable bequests, and various deductions to give you a comprehensive picture of potential estate tax liability. Whether you are engaged in estate planning, helping settle an estate, or simply curious about how these taxes work, enter your estate details below to calculate your potential tax obligation and discover strategies to protect your family's wealth.
How to Use the Estate Tax Calculator
- 1Enter the value of all estate assets including real estate (primary home, vacation properties, investment properties), investments (stocks, bonds, mutual funds, brokerage accounts), business interests (ownership in businesses, partnerships, LLCs), life insurance death benefits, retirement accounts (IRAs, 401(k)s, pensions), and personal property (vehicles, jewelry, art, collectibles).
- 2Input deductions including outstanding debts and liabilities (mortgages, loans, credit card balances), funeral and burial expenses, and any charitable bequests specified in the will or trust.
- 3If assets will pass to a surviving U.S. citizen spouse, enter the marital deduction amount. The unlimited marital deduction allows any amount to pass to a spouse tax-free.
- 4Select your state of residence to calculate potential state estate or inheritance taxes. Twelve states plus DC have estate taxes, and six states have inheritance taxes with varying exemption levels and rates.
- 5If applicable, check the portability election box and enter the deceased spouse's unused exemption amount. This can effectively double the federal exemption to $27.22 million.
- 6Review your results showing gross estate, taxable estate, federal tax, state tax, total tax liability, effective tax rate, and net amount passing to heirs.
Federal Estate Tax Rates and Brackets for 2026
The federal estate tax uses a progressive rate structure, similar to income taxes, with rates ranging from 18% to 40%. However, the application differs significantly because of the unified credit that effectively exempts the first $13.61 million from taxation.
2026 Federal Estate Tax Rate Schedule:
| Taxable Estate 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% |
How the Unified Credit Works:
The estate tax is calculated on the entire taxable estate, but then a credit (called the unified credit or applicable credit amount) is applied. For 2026, this credit equals the tax on $13.61 million, effectively making estates below this threshold owe no federal estate tax.
Example Calculation:
Estate of $20 million (after deductions):
- Tax before credit: $7,345,800
- Unified credit (tax on $13.61M): $5,389,800
- Net federal estate tax: $1,956,000
- Effective rate: 9.78% of gross estate
The progressive rates mean that most of the tax is concentrated at the 40% top rate for large estates.
2026 Federal Estate Tax Exemption Amount
The federal estate tax exemption for 2026 is $13.61 million per person, one of the highest exemptions in history. This means an individual can transfer up to $13.61 million to heirs completely free of federal estate tax.
Key Exemption Facts for 2026:
| Category | Amount |
|---|---|
| Individual exemption | $13,610,000 |
| Married couple (with portability) | $27,220,000 |
| Annual gift tax exclusion | $19,000 per recipient |
| Lifetime gift tax exemption | $13,610,000 (unified with estate) |
Inflation Adjustments:
The exemption is adjusted annually for inflation using the Chained Consumer Price Index (C-CPI-U). Recent history:
| Year | Exemption | Increase |
|---|---|---|
| 2023 | $12,920,000 | +7.1% |
| 2024 | $13,610,000 | +5.3% |
| 2025 | $14,010,000 (est.) | +2.9% |
| 2026 | $13,610,000* | *Subject to TCJA sunset |
Who Actually Pays Estate Tax:
Due to the high exemption, only about 0.1% of estates (roughly 1 in 1,000 deaths) owe any federal estate tax. The tax primarily affects:
- Ultra-high-net-worth individuals
- Business owners with valuable companies
- Real estate investors with substantial holdings
- Those with large life insurance policies
- Individuals who received significant inheritances
The Unified System:
The estate and gift taxes share the same exemption, called the "unified credit." Taxable gifts made during life reduce the exemption available at death. For example, if you give $3 million in taxable gifts during life, your estate exemption at death would be reduced to $10.61 million.
State Estate and Inheritance Taxes
While the federal exemption shelters most estates, state-level taxes can create significant liability. Twelve states plus the District of Columbia impose estate taxes, and six states impose inheritance taxes (which tax recipients rather than the estate itself).
States with Estate Taxes (2026):
| State | Exemption | Top Rate |
|---|---|---|
| Connecticut | $13.61M (matches federal) | 12% |
| Hawaii | $5.49M | 20% |
| Illinois | $4.0M | 16% |
| Maine | $6.8M | 12% |
| Maryland | $5.0M | 16% |
| Massachusetts | $2.0M | 16% |
| Minnesota | $3.0M | 16% |
| New York | $6.94M | 16% |
| Oregon | $1.0M | 16% |
| Rhode Island | $1.77M | 16% |
| Vermont | $5.0M | 16% |
| Washington | $2.19M | 20% |
| District of Columbia | $4.71M | 16% |
States with Inheritance Taxes:
| State | Tax Rate Range | Notes |
|---|---|---|
| Iowa | 2% - 6% | Phasing out by 2025 |
| Kentucky | 4% - 16% | Class A heirs exempt |
| Maryland | 10% | Also has estate tax |
| Nebraska | 1% - 18% | Rate varies by relationship |
| New Jersey | 11% - 16% | Class A heirs exempt |
| Pennsylvania | 4.5% - 15% | Spouses exempt |
Key Differences:
- Estate tax: Paid by the estate before distribution
- Inheritance tax: Paid by beneficiaries after receiving assets
- Maryland is the only state with both
State Tax Considerations:
- Domicile matters: Your state of residence at death determines which state taxes apply
- Real property location: Real estate may be taxed by the state where it is located, regardless of domicile
- Lower exemptions: Most state exemptions are far below the federal exemption
- No portability: Most states do not allow portability of unused exemption between spouses
Marital Deduction and Portability
Two of the most powerful estate tax planning tools are the unlimited marital deduction and portability. Together, they can eliminate estate taxes for most married couples.
Unlimited Marital Deduction:
Any amount passing to a surviving U.S. citizen spouse is completely exempt from estate tax. This applies to:
- Property passing outright to the spouse
- Property passing to a qualifying trust for the spouse (QTIP)
- Joint property that passes by right of survivorship
- Retirement accounts with the spouse as beneficiary
Important limitations:
- Spouse must be a U.S. citizen (special rules apply to non-citizen spouses)
- Property must actually pass to the surviving spouse
- Does not eliminate the tax, just defers it until the second spouse dies
Portability (DSUE):
The "Deceased Spousal Unused Exclusion" (DSUE) allows a surviving spouse to use the deceased spouse's unused exemption amount.
Example:
- Husband dies in 2026 with $5 million estate
- His unused exemption: $13.61M - $5M = $8.61M
- Wife can add this to her own $13.61M exemption
- Wife's total exemption: $22.22M
Portability Requirements:
- Timely election required: Must file Form 706 within 9 months of death (plus 6-month extension)
- Even if no tax is due: Must file to preserve portability
- Applies only to federal tax: Most states do not recognize portability
- Only last deceased spouse: Can only port from most recent deceased spouse
When Portability Is Not Enough:
For very large estates, traditional planning with bypass trusts (also called credit shelter trusts) may provide additional benefits:
- Protects assets from estate tax at second death
- Provides asset protection for surviving spouse
- Can freeze appreciation outside of surviving spouse's estate
- Works for state estate tax planning where portability doesn't apply
Estate Planning Strategies to Minimize Taxes
Effective estate planning can significantly reduce or eliminate estate tax liability. Here are the most common strategies used by wealthy families and their advisors.
1. Annual Gift Tax Exclusion
Give up to $19,000 per recipient per year (2026) without using any lifetime exemption:
- Married couples can give $38,000 per recipient together
- No limit on number of recipients
- 10 years of gifts to 5 grandchildren = $950,000 transferred tax-free
2. Irrevocable Life Insurance Trust (ILIT)
Life insurance death benefits count as part of your estate if you own the policy. An ILIT:
- Removes insurance from your taxable estate
- Provides tax-free death benefit to heirs
- Can provide liquidity to pay estate taxes on other assets
- Must be established 3+ years before death to be effective
3. Grantor Retained Annuity Trust (GRAT)
Transfer appreciating assets while retaining an annuity stream:
- Assets transferred at discounted value
- If assets outperform the IRS interest rate (Section 7520 rate), excess passes tax-free
- "Zeroed-out" GRATs can transfer wealth with minimal gift tax exposure
- Best for assets expected to appreciate significantly
4. Charitable Giving Strategies
Charitable Remainder Trust (CRT):
- Provides income to you for life
- Remainder goes to charity
- Estate and income tax deductions
Charitable Lead Trust (CLT):
- Charity receives income for a term
- Remainder passes to heirs at reduced gift/estate tax cost
- Best in low interest rate environments
5. Family Limited Partnerships (FLP) / LLCs
- Transfer business or investment assets at discounted values
- Valuation discounts for lack of marketability and minority interest
- Maintain control through general partner/manager role
- Discounts of 25-40% are common but scrutinized by IRS
6. Qualified Personal Residence Trust (QPRT)
- Transfer home to heirs at discounted value
- Retain right to live in home for a term
- If you survive the term, home passes outside your estate
- Gift tax value based on term length and interest rates
7. Spousal Lifetime Access Trust (SLAT)
- Irrevocable trust for spouse's benefit
- Removes assets from both spouses' estates
- Spouse can receive distributions if needed
- Popular strategy to use exemption before potential sunset
The 2026 Sunset Provision and Future Changes
The current high estate tax exemption is scheduled to change significantly after 2025 due to the "sunset" provision in the Tax Cuts and Jobs Act (TCJA) of 2017.
What the Sunset Means:
Unless Congress acts, on January 1, 2026:
- The exemption will revert to pre-TCJA levels
- Adjusted for inflation, this means approximately $6-7 million per person
- Married couples' combined exemption: approximately $12-14 million
- The 40% top rate will remain unchanged
Timeline:
| Year | Exemption | Status |
|---|---|---|
| 2017 | $5.49M | Pre-TCJA |
| 2018 | $11.18M | TCJA enacted |
| 2024 | $13.61M | Current law |
| 2025 | ~$14.0M | Last TCJA year |
| 2026+ | ~$7.0M (est.) | Post-sunset (if no action) |
Planning Implications:
- Use It or Lose It: Gifts made before the sunset are protected, even if the exemption later decreases
- No Clawback: IRS has confirmed that gifts made under the higher exemption will not be "clawed back"
- Time Pressure: High-net-worth individuals should consider using exemption before potential reduction
Political Uncertainty:
The future of estate tax is subject to political dynamics:
- Some advocate for permanent high exemption
- Others propose lowering exemption to $3.5M with higher rates
- Biden administration proposed lower exemption and elimination of stepped-up basis
- Any changes require Congressional action
Prudent Planning:
Given uncertainty, advisors recommend:
- Making gifts now if exemption likely to be used eventually
- Using flexible structures that can adapt to law changes
- Maintaining liquidity for potential increased tax liability
- Regularly reviewing estate plans as laws evolve
State-Level Considerations:
Even if federal exemption remains high, state estate taxes may become more significant. Some states are considering:
- Lowering exemptions
- Increasing rates
- Adding new estate or inheritance taxes
Pro Tips
- 💡Review your estate plan whenever major life events occur (marriage, divorce, birth, death, significant asset changes) or when tax laws change. The current high exemption period is an excellent time to implement planning strategies before potential future reductions.
- 💡Always elect portability by filing Form 706, even if no estate tax is owed. This preserves the deceased spouse's unused exemption and costs relatively little compared to the potential tax savings. Many families have lost millions by failing to make this simple election.
- 💡Consider an Irrevocable Life Insurance Trust (ILIT) if you have significant life insurance. A $5 million policy owned by you at death would be included in your taxable estate. The same policy owned by an ILIT passes to your heirs completely outside your estate.
- 💡Use your annual gift tax exclusion every year. A couple with three married children and six grandchildren can transfer $456,000 annually ($38,000 x 12 recipients) without using any lifetime exemption. Over 20 years, that is $9.12 million transferred tax-free.
- 💡For appreciated assets, consider whether to gift during life or hold until death. Gifts carry over your original basis (recipient pays capital gains on sale), while inherited assets get stepped-up basis (no capital gains). For highly appreciated assets, holding until death may be more tax-efficient.
- 💡If you live in a state with estate tax, consider whether relocating could save your family significant taxes. Moving from Massachusetts (estate tax on estates over $2 million) to Florida (no estate tax) could save hundreds of thousands in state taxes for large estates.
- 💡Fund charitable intentions through your estate using strategies like charitable remainder trusts, charitable lead trusts, or simply charitable bequests. Charitable transfers are fully deductible from your taxable estate and can provide income tax benefits during life.
- 💡For business owners, start succession planning early. Business interests often comprise the largest portion of an estate and require careful valuation, liquidity planning, and transfer strategies. Consider family limited partnerships, buy-sell agreements funded with life insurance, and gradual ownership transfers.
- 💡Maintain good records of your cost basis in all assets. This information is crucial for determining estate tax values and calculating potential capital gains. Poor records can result in higher taxes for your heirs.
- 💡Consider a Spousal Lifetime Access Trust (SLAT) to use your exemption while maintaining indirect access to assets through your spouse. This strategy is popular for couples who want to reduce their estates but are not ready to give up access to their wealth entirely.
- 💡Work with a team of professionals including an estate planning attorney, CPA, and financial advisor. Estate tax planning involves complex interactions between federal and state tax laws, investment strategies, and family dynamics that require coordinated expertise.
- 💡Update beneficiary designations on retirement accounts, life insurance, and other assets regularly. These designations override your will and can inadvertently cause assets to pass in ways that increase estate taxes or conflict with your wishes.
Frequently Asked Questions
The federal estate tax exemption for 2026 is $13.61 million per individual. This means a single person can pass up to $13.61 million to heirs without owing any federal estate tax. For married couples using portability, the combined exemption is $27.22 million. This exemption is historically high and is scheduled to potentially decrease after 2025 due to the TCJA sunset provision, which could reduce it to approximately $6-7 million per person if Congress does not act.
