The 2025 Estate Tax Exemption
The IRS increased the exemption before the 2025 GOP tax bill was enacted. Find out how the megabill changes the threshold for estate taxes.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
The federal estate tax exemption increased again for 2025. Although the higher, IRS-inflation-adjusted number, announced last fall, may not have come as a surprise to most.
However, 2025 is a pivotal tax year.
After the Tax Cuts and Jobs Act (TCJA) temporarily raised the estate exemption amount to a higher base threshold, the so-called "One Big Beautiful Bill" (OBBB) enacted on July 4, 2025, makes that extension permanent.
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.
Under the new Trump tax megabill, estate exemption amounts increase to $15 million for single filers and $30 million for married filing joint couples.
A higher exemption in the current year will save more estates from federal tax, which may save heirs the heartache of a higher tax bill. Here's more of what you need to know.
In the news: Curious about next year's estate tax exemption? Check out Kiplinger's report, 2026 Estate Tax Exemption Amount: What You Need to Know.
Current estate tax exemption
The federal estate tax doesn’t apply unless you hit a certain exemption amount.
- The exemption amount for people who pass away in 2025 is $13.99 million (up from $13.6 million last year).
- Married couples can expect their exemption to be $27.98 million (up from $27.22 million last year).
Federal estate tax rate
Only a certain percentage of estates will be subject to the federal estate tax. This is because the exemption is high for 2025.
However, estates valued over the tax amount will be taxed at a pretty hefty rate, with those exceeding more than $1 million ($14,990,000 or $28,980,000 combined for married couples) taxed at 40%.
Below is how much heirs can 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 |
State estate taxes
Some states may 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.
Estate tax under the 'One Big Beautiful Bill'
The new so-called "One Big Beautiful Bill" (OBBB) makes the exemption permanent, and increases the amounts for 2026:
- Single filers will receive an estate exemption of $15 million
- Married filing joint couples will receive an exemption from estate taxes of $30 million.
The estate tax exemption is also indexed for inflation.
Period | Exemption Amount |
2018 | $11,180,000 |
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 |
GOP estate tax bill
With Trump serving his second term as president and tax reform passed through reconciliation, many provisions of the TCJA will continue for some time.
The tax bill extends many provisions in the TCJA (which includes the estate tax exemption previously mentioned).
Other TCJA tax provisions in the OBBB include:
- Extending the increased standard deduction and temporarily raising the amounts
- Permanently eliminating the personal and dependency exemption
- Extending and temporarily increasing the federal child tax credit
Read More
-
How to Budget as a Couple Without FightingThese tips will help you get on the same page to achieve your financial goals, with minimal drama.
-
Emergency Travel Assistance Memberships ExplainedEmergency travel assistance memberships help coordinate medical evacuations and emergency travel support. Here is how they differ from insurance and how major providers compare.
-
Why 'Locking' Your Social Security Number Is the New Credit FreezeHere is how to keep your Social Security number private in an age of aggressive cybercriminals.
-
These Thoughtful Retirement Planning Steps Help Protect the Life You Want in RetirementThis kind of planning focuses on the intentional design of your estate, philanthropy and long-term care protection.
-
Fixed Indexed Annuities and Bonds: The Perfect Match as Interest Rates Inch Lower?The prospect of more interest rate cuts has investors wondering how to enhance the bond portion of their portfolio. A fixed indexed annuity could be the answer.
-
'Fee-Only' and 'Fiduciary' Are Not the Same: A Financial Pro Sets the Record StraightThe terms fiduciary and fee-only are not interchangeable. Knowing the difference ensures investors get the advice and the consumer protection they need.
-
I'm a Financial Adviser: This Is Why a Second (Gray) Divorce Could Cost You Big-TimeDivorce isn't any easier the second time, especially if you've remarried later in life. Rushing to settle without proper advice can have serious consequences.
-
A Matter of Trustees: Is Your Spouse the Best Person to Manage the Kids' Trusts?Naming your spouse as trustee can provide invaluable familial insight and continuity, but you should carefully weigh those benefits against potential risks.
-
New Plan Could End Surprise Taxes on Social Security 'Back Pay'Social Security Taxes on Social Security benefits are stirring debate again, as recent changes could affect how some retirees file their returns this tax season.
-
The 5 Biggest Tax Mistakes New Retirees Make in the First 5 YearsMaking the wrong tax moves in the first few years of retirement can be costly for you and your heirs. These are the five biggest mistakes to avoid.
-
Inherited an IRA? Don't Fall Into the 10-Year Tax TrapRules on inherited IRAs have tightened, and most non-spouse beneficiaries must empty the pot in 10 years or face stiff penalties. That calls for an action plan.
