Inheritance Tax Estimator

Estate tax (sometimes called inheritance tax) is a tax on the transfer of wealth after death. In the United States, the federal estate tax applies only to estates above a certain exemption threshold.

2026 US Federal Estate Tax:

• Exemption: $15 million per individual, $30 million for a married couple using both exemptions.
• Estates below the exemption owe $0 in federal estate tax.
• Only the amount above the exemption is taxed.

The sunset that did not happen. For years every estate-planning article carried the same warning: the doubled exemption from the 2017 Tax Cuts and Jobs Act was scheduled to expire on 1 January 2026 and fall back to roughly $7 million per person. Planners spent 2024 and 2025 telling clients to use the higher exemption while it lasted. Legislation passed in July 2025 removed the expiry and set the exemption at $15 million per person from 2026, indexed for inflation thereafter. If you are reading older advice built around that cliff, it no longer applies. Exemptions are still a political football, so check the current figure before acting on any number here.

Federal Estate Tax Brackets:

Key deductions that reduce the taxable estate:

• Marital deduction: Unlimited transfers to a surviving spouse.
• Charitable deduction: Gifts to qualified charities.
• Debts and expenses: Mortgages, funeral costs, estate administration fees.

State-level estate taxes also apply in some states (e.g., Massachusetts, Oregon, New York), often with lower exemptions starting around $1–6 million.

Worked example: Estate value: $18,000,000. Debts and funeral costs: $200,000. No surviving spouse.

• Taxable estate (after deductions): $18,000,000 − $200,000 = $17,800,000
• Exemption (single, 2026): $15,000,000
• Amount subject to tax: $17,800,000 − $15,000,000 = $2,800,000
• Federal estate tax owed: $1,065,800
• Net to heirs (federal only): about $16,734,200

That tax figure runs the amount above the exemption up through the bracket table, so the first $1,000,000 is taxed at 18% through 39% and only the remaining $1,800,000 hits the 40% rate. A flat 40% on the whole $2,800,000 would give $1,120,000, which is $54,200 higher.

In practice the IRS gets to the same place by a different route: the exemption is applied as a unified credit against a tax computed from the first dollar, which absorbs the lower brackets and leaves the excess taxed at a flat 40%. The bracket table below is the standard simplified presentation and the calculator follows it, so treat both as an estimate rather than a return.

Estate vs. inheritance tax, a terminology trap. “Estate tax” is paid out of the estate before assets reach the heirs. “Inheritance tax” is paid by the heir on what they receive. The IRS levies an estate tax only. Five US states (Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania) impose a separate inheritance tax on heirs, with rates and exemptions varying by the heir’s relationship to the deceased. Iowa had one and phased it out completely at the start of 2025.

Tip: Estate planning strategies like trusts, gifting during your lifetime, and life insurance can significantly reduce estate tax liability. Consult a tax professional for personalized advice.