Estate Tax Calculator: Exemptions & Planning

Q: What is the federal estate tax exemption in 2026?

The 2026 federal basic exclusion amount is $15,000,000 per individual ($30,000,000 for married couples using portability), per IRC § 2010(c)(3) as amended by the One Big Beautiful Bill Act (OBBBA, Public Law 119-21, signed July 4, 2025) and confirmed in IRS Rev. Proc. 2025-32. OBBBA made the elevated TCJA-era exemption permanent and reset it to $15M; the previously scheduled sunset to roughly $7M on January 1, 2026 did not occur. Inflation indexing resumes for 2027 and later years.

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 federal and state estate tax liability based on gross estate value, allowable deductions, marital status, and state of residence. It applies the 2026 federal basic exclusion of $15,000,000 per individual ($30,000,000 for married couples using portability), the progressive federal tax brackets from 18% to 40% under § 2001(c), and state-level estate taxes where applicable. Output includes the net estate, applicable exemption, taxable estate, federal tax, state tax, total tax, effective rate, net to heirs, and a liquidity check against your liquid assets. The model does not address GRATs, ILITs, generation-skipping transfer (GST) tax, alternate valuation, lifetime gift offsets to the unified credit, or state inheritance taxes paid by recipients. Professional estate-planning counsel is recommended for actual planning.

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 the basic exclusion. The bracket schedule under § 2001(c) is statutory and has not changed since 1993, so the same rate ladder applies in 2026. Rates progress from 18% on the first $10,000 above exemption to 40% on amounts over $1,000,000 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 applies only to the amount exceeding the basic exclusion:

\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 under § 2056
2026 Exemption:

$15,000,000 per individual ($30,000,000 for married couples using portability), permanent under OBBBA § 70106 amending § 2010(c)(3)

Progressive Estate Tax Computation

Estate tax uses progressive brackets under § 2001(c). The tentative tax is computed on the full taxable estate, then the unified credit (the tentative tax on the exemption amount) offsets the tax dollar-for-dollar:

\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. Net of the unified credit, the math reduces to applying the brackets directly to the amount above the exemption, which is what the calculator above does.

Bracket Range:

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

The average tax rate on the amount above the exemption; approaches but stays below 40% as estates grow due to lower rates filling the first $1M of bracket space

Worked Example

Single decedent in 2026, gross estate $20,000,000, debts and administrative expenses $200,000, no charitable bequests.

Taxable estate: $20,000,000 − $200,000 = $19,800,000
Tax base above exemption: $19,800,000 − $15,000,000 = $4,800,000
Federal tax through the first $1,000,000 of tax base (filling 18%–39% brackets): $345,800
Plus 40% on the remaining $3,800,000: $1,520,000
Federal estate tax: $1,865,800
Effective rate on the amount above exemption: ~38.9%
Effective rate on the full $19.8M taxable estate: ~9.4%

The same estate held by a married couple with timely portability election would be entirely shielded; $19.8M is well under the combined $30M exemption.

State Tax Stacking:

States with their own estate tax (Oregon at $1M, Massachusetts at $2M, others) tax amounts the federal exemption shields; both taxes apply to estates with sufficient state nexus
Valuation Risk:

Estate values depend on appraisals at date of death or the alternate valuation date six months later. Market swings and illiquidity discounts on closely-held interests significantly affect the taxable amount

State Estate Tax Landscape (2026)

Lowest Exemption States

Some states tax estates far below the federal threshold:

Oregon:

$1,000,000 exemption (statutory, not indexed), graduated 10–16% rates
Rhode Island:

$1,838,056 exemption (2026, indexed annually), graduated 0.8–16% rates
Massachusetts:

$2,000,000 exemption (statutory since Oct 2023), graduated 0.8–16% rates
Washington:

$3,076,000 exemption (2026, indexed); top rate raised to 35% under ESSB 5813 (effective July 2025)

Higher Exemption States

Some states offer more generous exemptions:

New York:

$7,350,000 exemption (2026, indexed); cliff at 105% ($7,717,500) forfeits the entire exemption
Maine:

$7,160,000 exemption (2026, indexed), 8–12% rates
Connecticut:

$15,000,000 exemption (matches federal for 2026), flat 12% rate above the threshold

Strategic Planning Techniques

Pre-Death Wealth Transfer

Reducing your taxable estate through lifetime transfers:

Annual Exclusion Gifts:

$19,000 per recipient in 2026 (unchanged from 2025), unlimited recipients, no lifetime exemption used
Direct Tuition/Medical:

Payments made directly to the educational institution or medical provider are unlimited and not treated as gifts under § 2503(e)
529 Plan Superfunding:

Contribute up to 5 years of annual exclusions at once ($95,000 in 2026, $190,000 for a couple electing gift-splitting), then no further annual-exclusion gifts to that beneficiary for 5 years
Irrevocable Trusts:

Assets leave your estate, though you may retain limited benefits depending on the trust type (e.g., GRATs, SLATs, IDGTs)

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 basic exclusion amount is $15,000,000 per individual ($30,000,000 for married couples using portability), per IRC § 2010(c)(3) as amended by the One Big Beautiful Bill Act (OBBBA, Public Law 119-21, signed July 4, 2025) and confirmed in IRS Rev. Proc. 2025-32. OBBBA made the elevated TCJA-era exemption permanent and reset it to $15M; the previously scheduled sunset to roughly $7M on January 1, 2026 did not occur. Inflation indexing resumes for 2027 and later years.

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) by timely filing Form 706, effectively doubling the exemption for married couples to $30M in 2026.

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 ($19,000 per recipient in 2026, unlimited recipients, unchanged from 2025), charitable giving (reduces estate dollar-for-dollar), irrevocable trusts (removes assets from estate), paying tuition or medical bills directly to the institution (unlimited, doesn't count against exemption under § 2503(e)), 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), § 6166 installment payments over up to 14 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) to matching federal levels (Connecticut). Six states have inheritance taxes. Maryland is the one state with both. State taxes are in addition to federal, though state estate taxes paid are deductible from the federal taxable estate.

Estate Tax Calculator: Legacy Preservation & Transfer Model

Estate value

Marital status

Deductions

Liquidity & state

Estate planning context

$15M permanent exemption

Gifting

Liquidity & trusts

Estate Tax Strategy Framework