Estate Tax Exemption Calculator 2026 — OBBBA Raised to $15M

What OBBBA Did to the Estate Tax Exemption

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, permanently raised the federal estate, gift, and Generation-Skipping Transfer (GST) tax exemption to $15,000,000 per individual beginning in 2026. Before OBBBA, the exemption stood at $13.99M in 2025 and was scheduled to sunset at the end of 2025 back to roughly $7M (the pre-TCJA amount adjusted for inflation) — the so-called "halving" that dominated estate planning headlines. OBBBA not only prevented the sunset, it lifted the ceiling above the 2025 level. The $15M amount is permanent in statute (no sunset) and will adjust for inflation starting in 2027. The top federal estate tax rate remains 40% on amounts above the exemption. Based on the IRS statutory framework under OBBBA, this is the largest federal wealth transfer exemption in US history.

Using Portability Between Spouses for $30M Exemption

Married couples can shelter up to $30,000,000 from federal estate tax by using portability. When the first spouse dies, the executor files Form 706 and makes the Deceased Spousal Unused Exclusion (DSUE) election, which transfers the deceased spouse's unused exemption to the survivor. The survivor stacks that amount onto their own $15M exemption. Portability is not automatic — if the Form 706 is not filed (or the DSUE election is not made), the unused exemption is lost forever. For estates well under the exemption, it still makes sense to file a portability-only 706 to lock in the DSUE, because the survivor's estate may grow substantially before their own death. This $30M combined shelter is a major planning tool for high-net-worth couples.

Annual Gift Exclusion and Lifetime Exemption Interaction

The annual gift tax exclusion for 2026 is $19,000 per recipient, up from $18,000 in 2025. Gifts within this annual limit do not count against your $15M lifetime exemption and do not require a gift tax return. Married couples using gift-splitting (Form 709 election) can give $38,000 per recipient per year. Over a 20-year plan, a couple with 4 children and 8 grandchildren can transfer $38,000 × 12 × 20 = $9,120,000 entirely outside the exemption system. Gifts above the annual exclusion reduce your remaining $15M exemption dollar-for-dollar and require a Form 709. Direct payments of tuition (to the school) and medical expenses (to the provider) are unlimited and do not count against either the annual exclusion or the lifetime exemption — a powerful grandparent strategy.

Why the Pre-OBBBA $7M Halving Scared People

Under the Tax Cuts and Jobs Act (TCJA) of 2017, the exemption was doubled but set to sunset on January 1, 2026, reverting to approximately $7 million (the pre-TCJA $5M amount adjusted for inflation). For years, estate planners urged high-net-worth clients to make large lifetime gifts before 2026 to "use it or lose it" — because once the sunset hit, the unused exemption above $7M would evaporate. OBBBA eliminated that cliff entirely by setting a permanent $15M floor. Clients who pre-funded dynasty trusts, SLATs, and GRATs ahead of the sunset were not harmed (the IRS anti-clawback regulations protect gifts made at higher exemption levels even if the law later drops), but the urgency dissolved overnight when OBBBA passed. Today, the planning focus has shifted from "beat the sunset" to "grow assets inside the $15M/$30M shelter."

Disclaimer: Estimates only. Federal tax only — state estate taxes (12 states + DC) not included. Verify with a CPA or estate attorney before acting. Based on OBBBA as signed July 4, 2025. Last updated: April 2026.