The Estate Tax Exemption Amount for 2026
The estate exemption amount is significantly higher than last year, creating a potentially promising tax year for inheritances and estates.
The federal estate tax exemption has increased twice for 2026. But if you've been keeping an eye on the news over the last year, the final numbers might not come as a surprise.
With the passage of the 2025 Trump tax bill, permanent changes were locked in on several expiring federal tax provisions. Among these changes was an increase in the estate exemption amount to a higher base threshold.
Alongside this higher exemption amount, heirs might receive a potentially lower federal tax bill. Yet it might mean an increase in taxes for some high-income earners.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's more of what you need to know.
Estate tax exemption 2026
The federal estate tax doesn’t apply unless you hit a certain exemption amount. Under the 2025 Trump tax bill, the exemption remains high, and the IRS also increased the exemption to the amounts below for 2026:
- The exemption for people who pass away in 2026 is $15 million (up from $13.99 million for the 2025 tax year).
- Married couples can expect their exemption to be $30 million (up from the current $27.98 million for 2025 taxes).
Federal estate tax rates
Due to the higher 2026 exemption amount, only a certain percentage of estates are subject to the federal estate tax.
However, estates valued above the tax amount are taxed at a pretty hefty rate, with those exceeding more than $1 million ($16 million or $31 million combined for married couples) taxed at 40%.
Below is how much heirs expect to pay based on an estate’s value:
Rate | Taxable Amount (Value of Estate Exceeding Exemption) |
18% | $0 to $10,000 |
20% | $10,001 to $20,000 |
22% | $20,001 to $40,000 |
24% | $40,001 to $60,000 |
26% | $60,001 to $80,000 |
28% | $80,001 to $100,000 |
30% | $100,001 to $150,000 |
32% | $150,001 to $250,000 |
34% | $250,001 to $500,000 |
37% | $500,001 to $750,000 |
39% | $750,001 to $1 million |
40% | More than $1 million |
The estate tax exemption is also indexed for inflation.
Period | Exemption Amount |
2019 | $11,400,000 |
2020 | $11,580,000 |
2021 | $11,700,000 |
2022 | $12,060,000 |
2023 | $12,920,000 |
2024 | $13,610,000 |
2025 | $13,990,000 |
2026 | $15,000,000 |
State estate tax rates
Some states impose an estate tax of their own (and the exemption amounts aren’t always as generous as the federal estate tax exemption).
For instance, in Massachusetts, the state estate tax exemption is just $2 million and isn’t indexed for inflation.
A few states also impose an inheritance tax, which can leave a tax bill for your heirs on even small amounts of money.
Nebraska, for example, imposes an inheritance tax on adult children when their inheritances exceed $100,000. In Kentucky, nephews and nieces only receive a $1,000 exemption.
Individual AMT phaseout threshold lowers for 2026: Will you have to pay AMT?
Before the Tax Cuts and Jobs Act (TCJA), 5.2 million Americans paid the Alternative Minimum Tax (AMT), per Tax Policy Center (TPC) data. That "parallel tax system" was implemented to ensure that higher-income taxpayers pay a minimum amount of tax.
However, under the TCJA, the individual AMT threshold was raised in a couple of ways:
- Increasing the exemption amount from $84,500 to $137,000 for married couples filing jointly (single filers from $54,300 to $88,100).
- Raising the phase-out threshold from $160,900 to $1,252,700 for married, filing jointly couples (single filers from $120,700 to $626,350).
The result was that the number of taxpayers who paid AMT dropped from about 5 million to just 200,000 in 2018, according to the TPC. Under the 2025 Trump tax overhaul, the individual AMT exemption amounts were made permanent.
However, in 2026, the phaseout was lowered to $500,000 for singles and $1 million for married couples filing jointly. Once more, the phaseout rate for every dollar above this threshold increased from 25% to 50%.
This means more income from higher earners will be subject to AMT for tax year 2026.
In fact, 7.6 million taxpayers are expected to pay AMT in early 2027, according to the TPC. And that number is expected to climb to 9.7 million by 2032.
So even if you haven't paid AMT in recent years, you might start paying this alternative tax for the 2026 tax year if you're a high-income earner.
Read More
