Estate Tax Calculator: Exemptions & Planning

Estate Tax Calculator: Exemption & Legacy Model

Calculate your federal and state estate tax liability with 2026 exemption limits. Plan for marital deductions, charitable giving, and inheritance optimization.

What This Calculator Does

This estate tax calculator estimates your federal and state estate tax liability based on your gross estate value, allowable deductions, filing status, and state of residence. It applies the 2026 federal exemption (approximately $7 million per individual, $14 million for married couples using portability), progressive tax brackets from 18% to 40%, and state-level estate taxes where applicable. The tool is designed for estate planners gauging exposure after the TCJA sunset, high-net-worth individuals evaluating gifting strategies, and families estimating the tax burden on inherited assets. It shows the taxable estate, applicable exemptions, tentative tax, unified credit offset, effective tax rate, and combined federal-plus-state liability. The calculator does not replace professional estate-planning counsel and does not model trusts, GRAT structures, or generation-skipping transfer taxes.

How to Use This Calculator

Enter your gross estate value—the total of all assets including real estate, investments, retirement accounts, life insurance death benefits, business interests, and personal property. Subtract deductions: outstanding debts, funeral and administrative expenses, and charitable bequests that reduce the taxable estate dollar for dollar. Select your marital status; if married, the unlimited marital deduction and portability of the deceased spouse’s unused exemption can significantly reduce or eliminate the tax. Choose your state to layer in any state-level estate or inheritance tax (some states tax estates far below the federal exemption). Review the results: taxable estate, federal exemption applied, tentative tax, unified credit, net federal tax, state tax if applicable, and the combined effective rate.

Federal Estate Tax Brackets (2026)

Progressive Rate Structure

Estate tax applies only to the amount exceeding your exemption. Rates are progressive, starting at 18% and reaching 40% on amounts over $1 million above exemption.

$0 - $10,000:

18% marginal rate
$10,001 - $20,000:

20% marginal rate
$40,001 - $60,000:

24% marginal rate
$500,001 - $1,000,000:

37-39% marginal rate
Over $1,000,000:

40% marginal rate (maximum)

How the Math Works

Taxable Estate Calculation

The taxable estate is determined by subtracting allowable deductions from the gross estate:

\text{Taxable Estate} = \text{Gross Estate} - \text{Debts} - \text{Expenses} - \text{Charitable Bequests} - \text{Marital Deduction}

The federal estate tax then applies only to the amount exceeding the unified credit (exemption equivalent):

\text{Tax Base} = \max\!\big(\text{Taxable Estate} - \text{Exemption},\; 0\big)

Gross Estate:

Total value of all assets: real estate, investments, retirement accounts, life insurance death benefits, business interests, personal property
Marital Deduction:

Unlimited for assets passing to a U.S. citizen spouse
2026 Exemption:

~$7,000,000 per individual (~$14,000,000 for married couples using portability)

Progressive Estate Tax Computation

Like income tax, estate tax uses progressive brackets. The tentative tax is computed on the full taxable estate, then the unified credit offsets the tax:

\text{Tentative Tax} = \sum_{k=1}^{K} t_k \times \big(\min(E, T_k) - T_{k-1}\big)^{+}

\text{Estate Tax} = \text{Tentative Tax} - \text{Unified Credit}

where E is the taxable estate, t_k is the rate for bracket k, and T_k is the bracket threshold. The unified credit equals the tentative tax on the exemption amount, effectively zeroing out tax on the first ~$7M.

Bracket Range:

Rates progress from 18% on the first $10,000 to 40% on amounts over $1,000,000 above exemption
Effective Rate:

The average tax rate on the taxable amount above the exemption; always below 40% due to the progressive structure

Worked Example

Single individual, gross estate $10,000,000, debts/expenses $200,000, no charitable bequests.

Taxable estate: $10,000,000 − $200,000 = $9,800,000
Tax base (above exemption): $9,800,000 − $7,000,000 = $2,800,000
Tentative tax on $2,800,000 (progressive brackets):
18% on first $10K = $1,800; 20% on next $10K = $2,000; …progressive rates… 40% on amount above $1M = $720,000
Approximate total: ~$1,026,800
Effective rate on excess: ~36.7%

If married with portability, the surviving spouse could shelter $14M, eliminating federal estate tax entirely on this estate.

State Tax Stacking:

States with their own estate tax (e.g., Oregon at $1M exemption) tax amounts the federal exemption shields; both taxes apply to estates in those states
Limitation, Valuation:

Estate values depend on appraisals at date of death (or alternate valuation date); market fluctuations and illiquidity discounts can significantly affect the taxable amount

State Estate Tax Landscape

Lowest Exemption States

Some states tax estates far below the federal threshold:

Oregon:

$1,000,000 exemption, up to 16% rate
Massachusetts:

$2,000,000 exemption, up to 16% rate
Rhode Island:

$1,774,583 exemption, up to 16% rate
Washington:

$2,193,000 exemption, up to 20% rate (highest)

Higher Exemption States

Some states offer more generous exemptions:

New York:

$6,940,000 exemption (with cliff: lose entire exemption if estate exceeds 105%)
Maine:

$6,800,000 exemption, up to 12% rate
Connecticut:

Matches federal exemption

Strategic Planning Techniques

Pre-Death Wealth Transfer

Reducing your taxable estate through lifetime transfers:

Annual Exclusion Gifts:

$18,000/recipient (2024), unlimited recipients, no lifetime exemption used
Direct Tuition/Medical:

Pay directly to institution, unlimited, no gift tax
529 Plan Superfunding:

Contribute 5 years' annual exclusion at once ($90K)
Irrevocable Trusts:

Assets leave your estate but you may retain some benefits

Liquidity Solutions

Ensuring heirs can pay taxes without selling assets:

ILIT (Irrevocable Life Insurance Trust):

Death benefit pays tax; not included in estate
Section 6166:

Installment payments over 14 years for closely-held business interests
Graegin Loan:

Estate borrows from family members; interest deductible

Estate Tax Calculator FAQ

What is the federal estate tax exemption in 2026?

The 2026 federal estate tax exemption is projected at approximately $7 million per individual ($14 million for married couples using portability). This is a significant drop from the 2025 exemption of $13.61 million due to the sunset of the Tax Cuts and Jobs Act provisions.

How does the unlimited marital deduction work?

Assets passing to a surviving U.S. citizen spouse are completely exempt from estate tax, regardless of amount. Additionally, "portability" allows the surviving spouse to use any unused portion of the deceased spouse's exemption (DSUE), effectively doubling the exemption for married couples.

What is the difference between estate tax and inheritance tax?

Estate tax is paid by the estate before distribution to heirs (federal and some states). Inheritance tax is paid by the recipient after receiving assets (only in 6 states: IA, KY, MD, NE, NJ, PA). Some states have both. The federal government only has estate tax, not inheritance tax.

How can I reduce my taxable estate before death?

Key strategies include: annual gift exclusion ($18K+ per recipient, unlimited recipients), charitable giving (reduces estate dollar-for-dollar), irrevocable trusts (removes assets from estate), paying tuition/medical bills directly (unlimited, doesn't count against exemption), and qualified personal residence trusts (QPRTs).

What happens if my estate doesn't have enough cash to pay the tax?

If liquid assets are insufficient, heirs may need to sell property, business interests, or other assets to pay the tax, often at distressed prices ("fire sale"). Solutions include life insurance in an ILIT (proceeds pay tax without being taxed themselves), installment payments over 10+ years for closely-held businesses, or pre-death liquidity planning.

Which states have their own estate or inheritance taxes?

Twelve states and DC have estate taxes with exemptions ranging from $1M (Oregon, Massachusetts) to matching federal levels. Six states have inheritance taxes. Maryland and New Jersey have both. State taxes are in addition to federal, though state taxes paid are deductible from federal taxable estate.

Estate Tax Calculator: Legacy Preservation & Transfer Model

Estate value

Marital status

Deductions

Liquidity & state

Estate planning context

Exemption sunset

Gifting

Liquidity & trusts

Estate Tax Strategy Framework