Estate Tax Calculator — Federal
& State

For 2025, the federal estate tax exemption is $13.99 million per individual ($27.98 million for married couples using portability). Estates below this threshold owe no federal estate tax. The exemption is scheduled to revert to approximately $7 million per person in 2026 when the Tax Cuts and Jobs Act's temporary provisions expire (adjusted for inflation). Rates on amounts above the exemption range from 18% to 40%. Charitable gifts and transfers to surviving spouses (the marital deduction) are generally unlimited and reduce the taxable estate.

As of 2024, 12 states and DC impose estate taxes: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. State exemptions vary dramatically — Oregon and Massachusetts tax estates above $1 million, while Connecticut matches the federal exemption ($12.92 million). Maryland is the only state with both an estate tax and an inheritance tax. Some states have graduated rates; others apply a flat rate. State estate taxes are separate from federal estate tax and calculated independently.

The unlimited marital deduction allows a decedent to transfer any amount to a surviving US citizen spouse tax-free, with no estate tax due at the first spouse's death. However, the assets in the surviving spouse's estate will be subject to estate tax when the survivor dies (offset by the survivor's own exemption). To preserve the first spouse's exemption, estates typically use a 'bypass trust' (credit shelter trust) — funded up to the exemption amount — to use both spouses' exemptions. A QTIP trust can qualify non-citizen spouses for some marital deduction benefits.

Portability allows a surviving spouse to use any unused estate tax exemption from their deceased spouse. If the first spouse dies with a $13.99 million exemption (2025) and only used $3 million, the surviving spouse can inherit the remaining $10.99 million of unused exemption — in addition to their own $13.99 million. Portability must be elected by filing a timely estate tax return (Form 706) for the deceased spouse, even if no tax is owed. The portability election deadline is 9 months after death (or 15 months with an extension). Missing the deadline forfeits portability.

Common estate tax reduction strategies include: annual gifting ($19,000 per recipient in 2025, indexed for inflation) — removes assets from the estate with no gift tax; irrevocable life insurance trusts (ILITs) — keep life insurance death benefits out of the estate; charitable giving — outright gifts, charitable remainder trusts (CRTs), charitable lead trusts (CLTs), and donor-advised funds reduce the taxable estate; GRATs (grantor retained annuity trusts) — transfer appreciation to heirs tax-free; family limited partnerships (FLPs) — can reduce estate value through valuation discounts for lack of control and marketability.