The 2025 Estate Tax Exemption
The IRS increased the exemption before the 2025 GOP tax bill was enacted. Find out how the megabill changes the threshold for estate taxes.
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:
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.
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
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