Inheritance Tax Calculator

Federal estate tax (often called 'death tax') applies to estates above the exemption threshold — currently $13.61M per person in 2024 (2× for married couples with proper planning). Less than 0.1% of estates owe federal estate tax. Above the exemption, the rate is essentially flat 40%. Six states also have state-level inheritance taxes (KY, MD, NE, NJ, PA), and twelve more have estate taxes. Our calculator handles federal + state, debts, charitable deductions, and the unlimited marital deduction.

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inventory_2Estate Details

paymentsTax Result

Total Tax Owed
$0
Net to heirs: $5,000,000
Federal Exemption
$13.61M
Taxable Estate
$5,000,000
Above Exempt
$0
Federal Tax (40%)
$0
State Tax
$0

tips_and_updates Tips

  • • Federal exemption is $13.61M (2024) — doubles for married with proper planning
  • • Unlimited spouse exemption — assets passed to spouse are 100% federal-tax-free
  • • Charitable bequests are 100% deductible — popular for ultra-wealthy estate planning
  • • 2026 sunset: exemption drops to ~$7M unless Congress extends
  • • 6 states have inheritance tax (paid by heir): KY, MD, NE, NJ, PA
  • • 12 states + DC have estate tax (paid by estate): MA, OR, WA, etc.
  • • Step-up in basis: heirs inherit assets at current market value (avoiding capital gains)
  • • Annual gift exclusion: $18,000/recipient (2024) reduces estate over time

How to Use This Calculator

1

Enter total estate value

All assets at fair market value.

2

Add deductions

Debts, funeral expenses, charitable bequests.

3

Choose filing year

2024 = $13.61M exemption; 2026 = ~$7M after sunset.

4

Spouse exemption?

If passing to spouse, mark exempt for unlimited deduction.

5

Add state rate if applicable

Only for states with inheritance/estate tax.

The Formula

The federal estate tax exemption is so high that almost no estates owe it. But the exemption is scheduled to drop by half in 2026 unless Congress acts. The 40% top rate applies to amounts above the exemption. Spousal transfers are unlimited (marital deduction). Charitable bequests are 100% deductible. State taxes are often more relevant than federal.

Federal Tax = max(0, (Gross Estate − Deductions − Exemption)) × 40%

lightbulb Variables Explained

  • Gross Estate Total fair market value of all assets at death
  • Deductions Debts + funeral expenses + charitable bequests
  • Exemption $13.61M (2024) per person, sunsetting to ~$7M in 2026
  • Marital Deduction Unlimited — assets passed to spouse are 100% exempt

tips_and_updates Pro Tips

1

Federal exemption is $13.61M (2024) — doubles for married with proper planning

2

Unlimited spouse exemption — assets passed to spouse are 100% federal-tax-free

3

Charitable bequests are 100% deductible — popular for ultra-wealthy estate planning

4

2026 sunset: exemption drops to ~$7M unless Congress extends

5

6 states have inheritance tax (paid by heir): KY, MD, NE, NJ, PA

6

12 states + DC have estate tax (paid by estate): MA, OR, WA, etc.

7

Step-up in basis: heirs inherit assets at current market value (avoiding capital gains)

8

Annual gift exclusion: $18,000/recipient (2024) reduces estate over time

Estate planning involves understanding both federal estate tax and state-level inheritance taxes, which can claim a significant portion of wealth transferred to heirs. An inheritance tax calculator helps estimate the tax liability on an estate based on its total value, applicable deductions, and current exemption thresholds. The federal estate tax exemption stands at $13.61 million per individual for 2024, meaning only estates exceeding this threshold owe federal tax at the 40% top rate. Less than 0.1% of American estates actually owe federal estate tax. However, a critical deadline looms: the current high exemption is scheduled to sunset in 2026, dropping to approximately $7 million unless Congress acts. Additionally, six states impose their own inheritance taxes on heirs, and twelve states plus the District of Columbia have separate estate taxes with much lower exemptions. Understanding these overlapping tax systems, available deductions like the unlimited marital deduction and charitable bequests, and strategic planning tools like irrevocable trusts and lifetime gifting can dramatically reduce or eliminate estate tax liability.

The 2026 Estate Tax Sunset and Its Impact

The Tax Cuts and Jobs Act of 2017 roughly doubled the federal estate tax exemption, but this increase expires on January 1, 2026, reverting to pre-2018 levels of approximately $7 million per person (adjusted for inflation). This sunset will more than double the number of estates owing federal tax, potentially affecting millions of families who previously had no estate tax exposure. For a married couple, the combined exemption would drop from roughly $27 million to $14 million. Estate planners are advising high-net-worth families to use their exemption now through irrevocable trusts, Grantor Retained Annuity Trusts (GRATs), and strategic gifting before the window closes. The annual gift exclusion of $18,000 per recipient in 2024 allows tax-free transfers that do not count against the lifetime exemption, offering a powerful tool for gradual estate reduction.

State Inheritance and Estate Taxes

While federal estate tax affects very few estates, state-level taxes have much lower thresholds that catch many more families. Six states impose inheritance tax paid by the heir based on their relationship to the deceased: Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania, and Iowa (phasing out). Rates range from 1% for close relatives to 15-18% for non-related beneficiaries. Separately, twelve states and DC impose estate taxes paid by the estate itself, with exemptions as low as $1 million in Oregon and Massachusetts. Maryland is the only state with both an estate tax and an inheritance tax. State tax planning often involves changing domicile (legal residence) to a no-tax state, using trusts to minimize the taxable estate at the state level, or timing gifts to reduce the estate before death. Always check both your state of residence and the state where assets are located.

Key Deductions and Planning Strategies

Several powerful deductions can reduce or eliminate estate tax. The unlimited marital deduction allows unlimited tax-free transfers between US citizen spouses, effectively deferring estate tax until the second spouse dies. Charitable bequests are 100% deductible from the taxable estate, making philanthropic giving doubly attractive for wealthy families. Debts, funeral expenses, and administrative costs reduce the gross estate. Beyond deductions, planning strategies include Irrevocable Life Insurance Trusts (ILITs) that remove life insurance proceeds from the taxable estate, Charitable Lead Annuity Trusts (CLATs) that split assets between charity and heirs, and family limited partnerships that provide valuation discounts of 15-35% on business interests. The step-up in basis at death also benefits heirs — they inherit assets at current market value, eliminating capital gains tax on appreciation during the decedent's lifetime.

Frequently Asked Questions

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All formulas verified against official standards.

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