From Kiplinger · · 1m 10s
Estate Tax Exemptions Explained
Federal estate tax exemption rises with inflation, but few estates pay federal tax.
In brief
Federal estate tax exemption rises with inflation, but few estates pay federal tax. The federal estate tax exemption is $15 million for deaths in 2026, increasing yearly with inflation, but only about 7,000 estates file federal estate tax returns annually. Originally reported by Kiplinger.
Federal Estate Tax Exemption
The federal estate tax exemption for deaths in 2026 is $15 million, increasing yearly with inflation.
Few Estates Pay Federal Tax
About 7,000 Form 706 estate tax returns are filed annually, with more than half from taxable estates.
Taxable Estate Filings
The Tax Policy Center estimates 6,890 federal estate tax returns for 2026, with 3,900 from taxable estates.
Inherited Property Tax
Inheritances are generally tax-free for federal purposes, with stepped-up tax basis at fair market value.
State Estate Taxes
Washington, D.C., and 12 states levy estate taxes: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington.
Inheritance Tax States
Five states impose inheritance taxes: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
State Tax Exemptions
Most state estate tax exemptions are far below the federal exemption, with only Connecticut close to the federal level.
What to remember
The federal estate tax exemption is $15 million for deaths in 2026, increasing yearly with inflation, but only about 7,000 estates file federal estate tax returns annually.
