Estate Tax Exemption for 2025: What You Need to Know

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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.

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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:

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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.

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Federal Estate Tax Exemption Amounts 2018-2025
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

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.