By Income Tax Service Editorial — Reviewed by Diyan Yap, EA (IRS Enrolled Agent) — Updated July 19, 2026
Quick answer: For people who die in 2026, the federal estate tax basic exclusion is $15,000,000 per person — up from $13,990,000 in 2025. The One Big Beautiful Bill Act made the higher exemption permanent and inflation-indexed, ending the scheduled 2026 drop to roughly half that amount. With portability, a married couple can shield about $30 million.
Key facts:
- 2026 basic exclusion: $15,000,000 per person (2025: $13,990,000)
- Permanent under the One Big Beautiful Bill Act — the old law’s scheduled ~50% cut for 2026 is repealed
- Inflation-indexed going forward
- Portability: a surviving spouse can use a deceased spouse’s unused exclusion — roughly $30 million per couple with a proper election
- The exemption covers your taxable estate plus lifetime taxable gifts combined
How much can you leave tax-free in 2026?
A person who dies in 2026 can pass $15,000,000 free of federal estate tax; amounts above the exclusion are what the estate tax actually reaches. For perspective, that threshold puts the federal estate tax entirely out of reach for the overwhelming majority of American families — it applies to a very small fraction of estates each year.
The same $15 million figure is a unified number: it covers your estate at death plus the taxable gifts you made during life, together. Large lifetime giving draws down the same pool your estate will use later.
What does “permanent” actually mean here?
It means the scheduled cliff is gone. Under prior law (the 2017 Tax Cuts and Jobs Act), the enlarged exemption was set to sunset after 2025, falling back to roughly half its level for 2026. Families spent 2024–2025 racing to make giant gifts before the window closed.
The One Big Beautiful Bill Act repealed the sunset: $15 million for 2026, permanent, indexed for inflation in later years. “Permanent” in tax law means “no built-in expiration” — a future Congress can always change the number, but nothing changes automatically now.
Two practical consequences:
- The panic-gifting era is over. Decisions can be made on family and business logic, not a countdown clock.
- Plans written around the sunset are stale. Documents drafted assuming a 2026 exemption drop — formula clauses, trust funding triggers — may now do things you don’t want. Have them re-read.
How does portability get couples to ~$30 million? (worked example)
Portability lets a surviving spouse inherit the deceased spouse’s unused exclusion amount.
Consider James and Ana, married with a combined $22 million estate:
- James dies in 2026 leaving everything to Ana — the unlimited marital deduction means no estate tax and none of his exclusion used
- His estate makes the portability election on a timely filed estate tax return — this is the step families miss, because “no tax due” makes filing feel optional
- Ana now holds her own $15 million exclusion plus James’s unused $15 million — roughly $30 million of combined shelter
- At Ana’s later death, the $22 million estate passes with room to spare
Skip step 2 and Ana has only her own $15 million — leaving $7 million of this estate exposed for want of a filing. The election deadline runs from the date of death; treat the return as mandatory whenever a married person with meaningful assets dies.
| Situation | Federal estate tax exposure in 2026 |
|---|---|
| Single, $10M estate | None — under the exclusion |
| Single, $18M estate | Tax on the excess over $15M |
| Couple, $22M, portability elected | None — under ~$30M combined |
| Couple, $22M, no election | Excess over survivor’s $15M exposed |
Who still needs estate planning?
More people than the headline suggests — because most estate planning was never about the federal estate tax:
- State-level taxes: a number of states levy their own estate or inheritance taxes with far lower thresholds. Your state’s rules may bite at a fraction of the federal number.
- Business owners and real estate investors: liquidity (how heirs pay anything owed without a fire sale), succession, and entity structure remain the real work — see our real estate investor guide.
- Basis planning: inherited assets generally receive a stepped-up basis; with estate tax off the table for most families, income-tax-aware inheritance planning (what to hold until death vs gift during life) is now the main event.
- Everyone: wills, beneficiary designations, guardianship for minor children, and incapacity documents have nothing to do with the exemption and everything to do with your family’s next bad week.
- Blended families and second marriages: the higher exemption doesn’t resolve who gets what — it just removes the tax pressure. Beneficiary conflicts, not tax bills, remain the most common way estates go wrong, and clear documents are the fix.
What should you do now?
- Re-read documents drafted before mid-2025. Formula bequests keyed to “the federal exemption amount” now reference a much larger number than when written — confirm that’s still your intent.
- Married with meaningful assets? Put the portability election in your family’s playbook: when a spouse dies, the estate files the return even if no tax is due.
- Check your state. Federal permanence didn’t change state estate or inheritance taxes at all.
- Coordinate lifetime giving with the new charitable rules and your income-tax picture. An IRS Enrolled Agent working alongside your estate attorney keeps the tax math and the documents pointed the same direction.
FAQ
Didn’t the exemption drop to about $7 million in 2026? No — that was the old law’s schedule. The One Big Beautiful Bill Act repealed the sunset; the 2026 exclusion is $15,000,000 per person, permanent and indexed.
Does my spouse automatically get my unused exemption? No. Portability requires an election on a timely filed estate tax return for the first spouse’s death — even when no tax is owed. Miss it and the unused exclusion is generally lost.
Do lifetime gifts count against the $15 million? Yes — the exclusion is unified across lifetime taxable gifts and your estate at death. Annual-exclusion-sized gifts (below the yearly per-recipient allowance) don’t consume it.
Is inherited property taxed as income to my kids? Generally no — and inherited assets typically receive a stepped-up basis, wiping out built-in capital gains as of the date of death. That’s why which assets you hold until death is now the bigger planning question for most families.
Can Congress change this again? Yes — “permanent” only means no automatic expiration. Planning should be robust to policy risk, which is another argument for flexible structures over irrevocable bets.
Does the estate tax exemption affect my regular income taxes? No — it’s a separate tax system. Your 2026 income tax brackets apply regardless of estate size.
Sources
- IRS: Tax inflation adjustments for tax year 2026
- IRS: One Big Beautiful Bill provisions for individuals and workers
This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change and individual situations vary — consult a qualified tax professional about your specific circumstances.