The 2026 federal estate tax exemption is $15 million per person, made permanent by the One Big Beautiful Bill Act, which means federal estate tax now touches roughly 0.07 percent of decedents per Congressional Research Service estimates. This calculator prices what remains: the federal bill on estates above the line, the marital and charitable deductions that shrink the taxable estate, portability from a predeceased spouse, the net your heirs actually receive, and the state estate tax that twelve states and the District of Columbia still levy at far lower thresholds.
Estate tax conversations got shorter in 2025. The One Big Beautiful Bill Act struck the scheduled sunset, wrote a flat $15 million exclusion into IRC Section 2010(c)(3) for 2026 deaths, and made it permanent with inflation indexing from 2027. Congressional Research Service estimates put the share of decedents owing any federal estate tax at roughly 0.07 percent. For almost everyone, the honest federal answer is zero, and the calculator says so plainly rather than manufacturing a scare.
What still deserves arithmetic is everything the federal exemption does not cover. The taxable estate is the gross value minus debts, charitable bequests, and anything passing to a US citizen spouse, and only the portion above the exemption, plus any portable amount from a predeceased spouse, is taxed at 40 percent. Twelve states and the District of Columbia run their own estate taxes with exemptions as low as $1 million, and those bills land on estates the IRS never touches. This page computes both layers and the net that reaches non-spouse heirs.
Variables in plain terms. The gross estate is everything the decedent owned or controlled at death: home, investments, retirement accounts at full balance, business interests, and life insurance on the decedent's life if the estate or the insured owned the policy. The marital deduction under IRC Section 2056 makes transfers to a US citizen spouse fully deductible, which is why the spouse input drops the taxable estate dollar for dollar. Charitable bequests under Section 2055 work the same way. DSUE, short for deceased spousal unused exclusion, is the portability credit a surviving spouse carries from the first death, available only when the first estate filed Form 706 and elected it.
The flat 40 percent multiplication deserves one paragraph of defense, because it looks like an approximation and is not. The statutory rate schedule climbs from 18 to 40 percent, but it reaches 40 percent at $1 million of taxable amount and stays there. Since the 2026 exemption of $15 million sits entirely in that flat region, the credit-versus-schedule arithmetic in Section 2001 collapses to exactly 40 percent of everything above the exemption. For the estates this calculator flags, the shortcut reproduces the statute to the dollar.
Take a $20 million gross estate with $600,000 of debts and final expenses and $2 million passing to the spouse. The taxable estate is $17.4 million. The exemption covers $15 million, leaving $2.4 million exposed, and the federal bill is $960,000. The non-spouse heirs receive $16,440,000, and the effective tax on the whole gross estate is 4.8 percent, a number worth remembering next time estate tax is described as confiscatory.
| Result at the defaults | Amount |
|---|---|
| Taxable estate | $17,400,000 |
| Federal exemption applied | $15,000,000 |
| Amount above the exemption | $2,400,000 |
| Federal estate tax | $960,000 |
| State estate tax (rate set to 0) | $0 |
| Net to non-spouse heirs | $16,440,000 (4.8% effective on gross) |
Until this year, the planning industry ran on a deadline: the doubled exemption was set to fall back to roughly half at the end of 2025, and families with $7 to $14 million faced a use-it-or-lose-it race. Section 70106 of the One Big Beautiful Bill Act cancelled that sunset and wrote the $15 million figure permanently into Section 2010(c)(3). The planning question flipped from how to escape a falling exemption to whether the federal tax matters at all. The ladder shows where it starts to.
| Taxable estate (after deductions) | Federal estate tax at 40% above $15M |
|---|---|
| $15,000,000 | $0 |
| $17,400,000 (default) | $960,000 |
| $20,000,000 | $2,000,000 |
| $25,000,000 | $4,000,000 |
| $50,000,000 | $14,000,000 |
The deduction levers do most of the work below the ladder's top rungs. Route the whole $20 million to a US citizen spouse and the marital deduction zeroes the federal bill entirely, with the tax question deferred to the survivor's estate, where a properly filed portability election gives the couple $30 million combined. A $2 million charitable bequest cuts the federal bill by $800,000 at the default inputs, from $960,000 to $160,000, because every charitable dollar is deducted at the 40 percent rate; the charitable giving tax calculator prices the lifetime version of that trade. And a $10 million DSUE from a predeceased spouse covers the entire $17.4 million taxable estate with $7.6 million of room to spare, which is the concrete value of filing Form 706 at the first death.
The federal exemption is the headline, and the state line is the trap. Twelve states plus the District of Columbia levy estate taxes with their own thresholds, and per TaxMath's analysis of the 2026 rules the lowest sit at $1 million, in Oregon, against the federal $15 million. Their example is the cleanest statement of the problem: a $10 million estate owes the IRS nothing and owes Washington State about $1.1 million. Set the state rate input to your state's top rate to get the order of magnitude; the model applies it flat to the taxable estate, which overstates states with progressive brackets and understates the risk of doing nothing at all.
One structural relief exists and the model deliberately declines to use it. State estate taxes paid are generally deductible from the federal taxable estate under IRC Section 2058, so the true combined bill is slightly lower than the sum this page shows; treating state tax as fully additive is the conservative direction. Planning beyond that is a different toolkit from the federal one: the marital deduction works at the state level, charitable bequests reduce both layers, but portability is a federal concept with no state analogue, and the only complete cure for a state estate tax is where you live. For the net-worth side of the same ledger, the net worth calculator tallies what a gross estate would actually include, and the retirement withdrawal calculator shows how drawdown order in retirement changes the size of the estate in the first place.
There is no federal inheritance tax and no federal income tax on the inheritance itself. Heirs get a stepped-up cost basis under IRC Section 1014: inherited assets reprice to their value on the date of death, so appreciation that built up during the owner's life is never taxed as income, and the heir owes capital gains only on growth after that date. This basis step-up is one of the largest quiet subsidies in the tax code, and it is why an heir who inherits stock and sells it the next week generally owes nothing. The estate tax computed on this page is a separate levy on the estate itself, paid from estate assets before distribution. Two real caveats: five states, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania per the Tax Foundation, levy inheritance taxes that fall on certain heirs, with rates depending on the heir's relationship to the decedent, children usually exempt or lightly taxed and siblings or distant relatives paying more; and retirement accounts do not get a basis step-up, so distributions from a traditional IRA or 401(k) remain ordinary income to the heir.
No, and this mistake costs real money. Portability under IRC Section 2010(c)(2) lets a surviving spouse add the deceased spouse's unused exclusion to their own, which is how a married couple reaches $30 million of combined shelter for 2026 deaths, but it is elective. Under Section 2010(c)(5), the first estate's executor must file Form 706 and make the portability election on a timely filed return, even when no estate tax is owed. Widows and widowers who never filed because the first estate was well under the exemption have forfeited millions in shelter for the survivor's later death, and the IRS has no general forgiveness once the deadline passes. The calculator models this with the DSUE input: at the defaults, a $10 million DSUE from a predeceased spouse turns a $960,000 federal bill into zero, because the combined $25 million of exemption covers the entire $17.4 million taxable estate. For 2026 deaths the deadline is nine months after death plus a six-month extension for filing, though the election itself must be on the timely filed return.
Large ones do, small ones do not. The exclusion is unified under IRC Section 2505: the same $15 million covers gifts during life and the estate at death, so every taxable lifetime gift, anything above the annual exclusion, spends exemption the estate no longer has. The annual exclusion sits outside that math entirely: in 2026 you can give any person $19,000 per year with no effect on the lifetime figure, and it is per donor and per recipient, so two parents can together move $38,000 a year to each child. A couple with three children can shift over $100,000 annually out of their estate this way without filing anything. Gifts to a spouse who is not a US citizen do not get the unlimited marital deduction; they carry a separate annual exclusion of $194,000 for 2026 under Rev. Proc. 2025-32. Gifts to a US citizen spouse are unlimited and never taxable or filing-worthy. If you made large taxable gifts during life, the estate's remaining exemption is what is left of $15 million, and appreciated property generally makes a better inheritance than cash because of the basis step-up heirs receive.
Often yes, which surprises people because the proceeds pass outside the will. Under IRC Section 2042, life insurance on the decedent's life is included in the gross estate if the proceeds are payable to the estate, or if the decedent held any incidents of ownership, the right to change beneficiaries, borrow against the policy, or cancel it. A $3 million policy owned by the insured adds $3 million to the gross estate on this page's first input line, even though the beneficiary receives it free of income tax and outside probate. The standard fix is an irrevocable life insurance trust, an ILIT, which owns the policy so the insured never holds incidents of ownership; after three years of ownership by the trust, the proceeds leave the estate entirely. Term insurance with no cash value is the simpler case: cheap coverage, but the death benefit still counts if the insured owned it. Retirement accounts are the other frequently miscounted line: a traditional IRA or 401(k) is fully included in the gross estate at its account balance, and distributions to heirs are then taxed as ordinary income on top, the one major asset class hit by both taxes.
Then the federal exemption is a comfort that stops at the state line, in the phrase used by TaxMath's analysis of the 2026 rules. Twelve states plus the District of Columbia levy their own estate taxes with exemptions far below the federal $15 million, as low as $1 million in Oregon. TaxMath works a $10 million example: an estate that owes the IRS nothing owes Washington State about $1.1 million, because Washington's own threshold and progressive rates apply to the full state-taxable estate. Set the state rate input to your state's top rate and set the other inputs to your numbers to see the order of magnitude; state bases and brackets differ, so treat the output as an estimate rather than a bill. Two mechanics matter. State estate taxes are generally deductible from the federal taxable estate under IRC Section 2058, which this calculator conservatively ignores, so the combined estimate here slightly overstates the true total. And none of the federal planning levers fully cure a state problem: the marital deduction shelters state tax too, but portability is a federal concept, charitable bequests reduce both, and the only complete answer to a state estate tax is residency, which is a life decision rather than a tax trick.
For estates of this size, exact. The estate tax rate schedule in IRC Section 2001(c) is progressive, climbing from 18 percent to 40 percent on taxable amounts over $1 million, but the unified credit shelters the tax on the exemption amount, so the bill equals the tax on the taxable estate minus the tax on the exemption. Because the 2026 exemption of $15 million and any realistic taxable estate above it both sit entirely in the flat 40 percent region above $1 million, the difference reduces to exactly 40 percent of the excess. The formula on this page is therefore not an approximation for the estates it flags; it is what the statute computes. Where the model does simplify: it ignores the deduction for state estate taxes under Section 2058, it does not model generation-skipping transfer tax, which carries its own $15 million exemption and a flat 40 percent rate when skipping a generation, and it assumes the full exemption is available, which lifetime taxable gifts can reduce. Form 706 has about forty pages for reasons this page does not attempt to replicate; the point here is the order of magnitude and which levers move it.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Benefit rules and cost assumptions stated on the page, not implied.