What is the estate and gift tax exemption for 2026?

$15 million per individual, or effectively $30 million for a married couple, under the One Big Beautiful Bill Act. This is a permanent baseline indexed for inflation going forward, replacing the scheduled 2026 sunset that would have cut the exemption roughly in half.

How does portability let a couple use both exemptions?

When the first spouse dies, the executor can elect portability on a timely Form 706 to transfer the unused exemption — the DSUE, or Deceased Spousal Unused Exclusion — to the surviving spouse. That preserves both spouses' exemptions even if the first estate wasn't large enough to owe tax. The election is not automatic; skipping the return forfeits the DSUE.

How much can I give away each year without using my lifetime exemption?

The annual gift tax exclusion is $19,000 per recipient for 2026 ($38,000 for a married couple splitting gifts). Gifts within the annual exclusion don't reduce your $15 million lifetime exemption and don't require a gift tax return. Direct payments of tuition or medical bills made to the institution are unlimited and separate.

What tax rate applies to an estate above the exemption?

The federal estate tax is a flat 40% on the taxable amount above the exemption. Because the exemption is now $15 million per person, only estates exceeding that threshold after deductions and portability owe any federal estate tax at all.

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Estate Income Tax

The 2026 Estate & Gift Tax Exemption: What the Permanent $15M Threshold Means

The One Big Beautiful Bill Act made the higher estate and gift tax exemption permanent and set it at $15 million per person for 2026. Here's how portability, annual gifting, and the 40% rate actually work — and how to plan around the threshold.

SMAART Tax Team

February 10, 2026

7 min read

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