What is the federal estate tax exemption for 2024?

$13.61 million per individual, or $27.22 million for married couples with proper planning. This is the amount you can pass to heirs federally tax-free. The exemption is scheduled to sunset in 2026, dropping to approximately $7 million unless Congress acts to extend it.

Do I have to pay inheritance tax on money I inherit?

There is NO federal inheritance tax — heirs don't pay federal tax on inheritances regardless of size. Federal estate tax is paid by the ESTATE before distribution. However, 6 states have state-level inheritance tax paid by the heir: Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania, Iowa (phasing out).

How is estate tax calculated?

Gross estate (total assets at fair market value) minus deductions (debts, funeral costs, charity) = taxable estate. Subtract the federal exemption ($13.61M in 2024). Multiply the remainder by the 40% top rate. State estate tax may also apply with separate exemptions and rates.

What is the unlimited marital deduction?

Assets transferred to a US citizen spouse at death are 100% exempt from federal estate tax — no limit. This is why most middle-income estates pay no federal tax. But the marital deduction merely defers the tax until the second spouse dies. Proper planning uses both spouses' exemptions to maximize what passes to children.

Which states have inheritance or estate tax?

Inheritance tax (paid by heir): KY, MD, NE, NJ, PA, IA. Estate tax (paid by estate): WA, OR, MN, IL, NY, ME, VT, MA, CT, RI, DC, HI, MD. State exemptions vary widely from $1M (OR) to $13.61M (matching federal). Check your specific state's rules.

How can I reduce inheritance tax?

Use lifetime gifts (annual exclusion $18k/person 2024), establish irrevocable trusts (ILIT, GRAT, CLAT), make charitable bequests, use life insurance held in ILIT, take advantage of valuation discounts for business interests, consider gifting before exemption sunsets in 2026.

What is the 2026 estate tax sunset?

Under current law (TCJA 2017), the federal estate tax exemption automatically reverts to pre-2018 levels on January 1, 2026 — approximately $7 million per person (adjusted for inflation). This will more than double the number of estates owing federal tax. Many wealthy families are using exemption now before it disappears.

Are gifts to heirs taxed?

Annual gifts up to $18,000/recipient (2024) are excluded from gift tax and don't count against your lifetime exemption. Above that, gifts use up your lifetime $13.61M exemption (combined with estate tax). The gift tax rate matches the estate tax rate (40% top). Spouse-to-spouse gifts are unlimited.

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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calendar_today Updated: April 2026

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inventory_2Estate Details

Total Estate Value

Outstanding Debts

Funeral Expenses

Charitable Bequests

Filing Year

State Rate %

Pass to spouse (unlimited exemption)

paymentsTax Result

Total Tax Owed

Net to heirs: $5,000,000

Federal Exemption

$13.61M

Taxable Estate

$5,000,000

Above Exempt

Federal Tax (40%)

State Tax

Input Values

Total Estate Value

Outstanding Debts

Funeral Expenses

Charitable Bequests

Filing Year

2023 ($12.92M exemption)

2024 ($13.61M exemption)

2025 ($13.99M exemption)

2026 (~$7M post-sunset)

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

Enter total estate value

All assets at fair market value.

Add deductions

Debts, funeral expenses, charitable bequests.

Choose filing year

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

Spouse exemption?

If passing to spouse, mark exempt for unlimited deduction.

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

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

Frequently Asked Questions

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