Estate Tax Exemption 2026 (and What Happens in 2027)
Written and reviewed by Hans Goldstein, licensed insurance producer, NPN 20602398 · CA Insurance License #4273294Last reviewed · Published October 3, 2026
What changed: the sunset that did not happen
Under the 2017 tax law, the doubled exemption was scheduled to fall roughly in half after 2025. The One Big Beautiful Bill Act (P.L. 119-21, signed 7/4/2025) replaced that with a $15 million basic exclusion starting in 2026, indexed for inflation after 2026, with no sunset (IRC §2010(c)(3), CRS). "Permanent" means permanent until a future Congress changes it.
AI voices. Education, not tax or legal advice. Hans is paid a commission if you buy a policy through him. Comment ILIT on the video for the checklist.
The 2026 figures
Federal transfer tax figures for 2026
| Item | 2026 figure | Source |
|---|---|---|
| Basic exclusion amount (estate and lifetime gifts) | $15,000,000 per person | Rev. Proc. 2025-32 |
| Married couple with portability | $30,000,000 | IRC §2010(c)(4)-(5) |
| Top estate and gift tax rate | 40% | IRC §2001 |
| GST (generation-skipping) exemption | $15,000,000 | Rev. Proc. 2025-32 |
| Annual gift exclusion | $19,000 per recipient ($38,000 with gift splitting) | Rev. Proc. 2025-32 |
| Annual gifts to a non-citizen spouse | $194,000 | Rev. Proc. 2025-32 |
| Portability | Timely Form 706; late election up to the 5th anniversary of death for estates not otherwise required to file | Rev. Proc. 2022-32 |
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Estate tax exemption 2027
From 2027 the $15 million is adjusted for inflation, using 2025 as the base year. The IRS publishes each year's figure in a revenue procedure; the 2027 number was not out as of this page's review date, so any specific 2027 figure you see before then is an estimate. This page will be updated when it is published.
How portability works for married couples
When the first spouse dies, the unused part of that spouse's exemption (the "DSUE" amount) can pass to the survivor, but only if the executor elects it on a timely filed Form 706. Estates that are not otherwise required to file can make a late election up to the 5th anniversary of death (Rev. Proc. 2022-32). Filing for portability even when no tax is owed is how a couple preserves the full $30 million. GST exemption is not portable.
State estate and inheritance taxes
California has no estate or inheritance tax. Twelve states and DC levy their own estate tax, most with far lower thresholds than the federal $15 million. Figures below are 2026, checked on state statutes and revenue sites on 10/3/2026.
State estate taxes, 2026
| State | 2026 exemption | Rates | Source |
|---|---|---|---|
| Connecticut | $15,000,000 (tracks federal) | 12% flat; $15M cap on tax | Conn. Gen. Stat. ch. 217 (gift and estate tax) |
| Hawaii | $5,490,000 | 10% to 20% | HRS ch. 236E (Hawaii estate tax) |
| Illinois | $4,000,000 | 0.8% to 16% (credit table) | 35 ILCS 405/2 (Illinois estate tax) |
| Maine | $7,160,000 | 8% to 12% | Maine Revenue Services estate tax |
| Maryland | $5,000,000 (plus unused spouse exemption) | up to 16%; also an inheritance tax | Md. Tax-Gen. 7-309 |
| Massachusetts | $2,000,000 (credit shelters the first $2M) | up to 16% | Massachusetts DOR estate tax guide |
| Minnesota | $3,000,000 (not indexed) | 13% to 16% | Minn. Stat. 291.016 |
| New York | $7,350,000; credit lost above 105% of it (the cliff) | 3.06% to 16% | New York estate tax (NY DTF) |
| Oregon | $1,000,000 (not indexed) | 10% to 16% | ORS 118.010 (Oregon estate tax) |
| Rhode Island | $1,838,056 | 0.8% to 16% | Rhode Island Division of Taxation: estate tax |
| Vermont | $5,000,000 | 16% flat | 32 V.S.A. 7442a (Vermont estate tax) |
| Washington | $3,000,000 for deaths on or after 7/1/2026 ($3,076,000 for 1/1 to 6/30/2026); indexed from 2027 | 10% to 20% (the 35% top rate applied only to deaths 7/1/2025 to 6/30/2026) | RCW 83.100.040 (Washington estate tax) |
| District of Columbia | 2026 amount not yet published (2025: $4,873,200) | 11.2% to 16% | DC OTR estate tax information |
Inheritance taxes (2026): Pennsylvania (0% spouse, 4.5% children, 12% siblings, 15% others), New Jersey, Kentucky, Nebraska and Maryland. Iowa repealed its inheritance tax for deaths from 1/1/2025. No state added or repealed an estate tax for 2026. Confirm with the state before planning.
California residents who own real property in one of these states, such as a Washington or Oregon vacation home, can owe that state's estate tax on the property.
Does the $15 million mean nobody needs estate planning?
No. Three groups still have work to do:
- Families projected over the line at death. Net worth grows. A couple at $15 million today growing 5% a year passes $30 million in about 14 years. Project yours with the estate tax calculator.
- Residents of states with their own estate tax (above), where the threshold can be $1 to $7 million.
- Anyone who wants control or liquidity: heirs inheriting a business, farm or building may need cash to settle the estate without a forced sale. That is where an irrevocable life insurance trust and survivorship coverage come in.
General education, not tax or legal advice. Tax treatment depends on your facts and on current law, which can change. Talk to your CPA or estate attorney.
Projected over the exemption? Get the ILIT policy design right first
Send your situation. Within one business day you get a written read: whether an ILIT is worth a conversation with your estate attorney, single-life or survivorship, guaranteed or indexed, and a pay period that fits your Crummey gifting budget.
Hans designs and places the policy. Your estate attorney drafts the trust; your CPA handles Form 709.
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Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer
Frequently asked questions
Sources
- 26 U.S.C. §2010 (unified credit, basic exclusion amount), Cornell LII
- 26 U.S.C. §2001 (estate tax rate), Cornell LII
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS Rev. Proc. 2022-32 (late portability election)
- Congressional Research Service R48611 (P.L. 119-21 tax provisions)
- IRS: Frequently asked questions on estate taxes
- RCW 83.100.040 (Washington estate tax)
- ORS 118.010 (Oregon estate tax)
- Massachusetts DOR estate tax guide
- Minn. Stat. 291.016
- New York estate tax (NY DTF)
- Maine Revenue Services estate tax
- 32 V.S.A. 7442a (Vermont estate tax)
- Conn. Gen. Stat. ch. 217 (gift and estate tax)
- HRS ch. 236E (Hawaii estate tax)
- 35 ILCS 405/2 (Illinois estate tax)
- Md. Tax-Gen. 7-309
- Rhode Island Division of Taxation: estate tax
- DC OTR estate tax information
Hans Goldstein, CA Insurance License #4273294 · NPN 20602398 · Goldstein & Co. LLC dba Goldstein Insurance Services, CA License #6016830
Contact: hans@hansgoldstein.com · 213-414-2808
General education, not tax or legal advice. Tax treatment depends on your facts and on current law, which can change. Talk to your CPA or estate attorney. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Guarantees apply only to the contractual terms of the policy. Caps, participation rates, loan rates, charges and dividends are not guaranteed and can change. Hans is not an attorney. An ILIT is drafted by your estate attorney; coordinate premium gifts and Form 709 filings with your CPA. Hans is paid a commission by the insurer if you buy a policy through him. For life insurance, ask and he will tell you what he earns on your specific policy. Product and company names are trademarks of their owners. Goldstein Insurance Services is an independent agency, not affiliated with or endorsed by any insurer named here. Life insurance requires underwriting; not everyone qualifies. This page describes products in general terms; read the policy and the insurer's disclosures before you buy.