The federal estate and gift tax exemption climbed to $15 million per person for 2026, the IRS confirmed in its annual inflation adjustments, up from $13.99 million in 2025. A married couple can now shield a combined $30 million from federal estate and gift tax before the first dollar is taxed. The jump comes from the One Big Beautiful Bill Act, which did more than raise the number — it made the higher exemption permanent, closing out a sunset clause that had put estate planners on the clock for years.
How the IRS Set the New $15 Million Exclusion for 2026
The IRS spelled out the new figure in Revenue Procedure 2025-32, the annual inflation-adjustment package the agency releases each fall covering more than 60 tax provisions. For estates of people who die in 2026, the basic exclusion amount is $15,000,000, up from $13,990,000 for those who died in 2025. For a married couple, the combined shelter is $30 million, since each spouse carries a separate exemption that can also be transferred to a surviving spouse if unused.
The exemption is unified across gifts made during life and assets transferred at death, so any gift above the annual exclusion draws down the same lifetime figure that shelters an estate later. The annual exclusion for gifts held flat at $19,000 per recipient for 2026, unchanged from 2025, meaning a married couple can still give $38,000 to any one person without touching the lifetime exemption or filing a gift tax return. A couple with three children and five grandchildren could move $304,000 to descendants in 2026 without using a dollar of their combined $30 million lifetime shelter.
Framed as a dollar amount, the increase is precise: the exclusion rose by exactly $1,010,000 between 2025 and 2026, a jump tax attorneys describe as unusually large next to the incremental, inflation-driven bumps of past years. Taxpayers who are already using lifetime gifts to shrink a taxable estate can apply that additional headroom immediately, moving more wealth, and its future appreciation, out of a gross taxable estate before any of it is ever taxed. A separate carve-out moved with ordinary inflation rather than the law’s reset: the amount a US citizen can give tax-free each year to a spouse who is not a citizen rose to $194,000 for 2026, up $4,000 from 2025, since unlimited tax-free transfers between spouses apply only when both are citizens.
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Why “Permanent” Ends a Decades-Old Deadline for Estate Planners
The $15 million figure would not exist without the One Big Beautiful Bill Act, the 2025 tax law that rewrote large parts of the 2017 Tax Cuts and Jobs Act before that law’s own provisions were set to expire. The TCJA had roughly doubled the estate and gift tax exemption starting in 2018, but wrote in a sunset clause that would have let the higher exemption lapse at the end of 2025, cutting the shelter back sharply just as 2026 began. The OBBBA canceled that countdown, resetting the exemption at $15 million and giving it permanent status rather than another expiration date.
That sunset clause had shaped estate planning for years before the OBBBA passed. Wealthy families and their attorneys spent much of 2024 and 2025 racing to complete large gifts and fund irrevocable trusts before the exemption could fall, on the theory that any amount sheltered before a cliff date stays sheltered even if the exemption later drops. The OBBBA’s permanence removes that specific deadline going forward, since the $15 million figure will now adjust for ordinary inflation each year rather than face another scheduled expiration written into the statute itself.
Permanent, though, is not the same as untouchable. Morgan Lewis’s own guidance to clients cautions that any provision of the Act could still be amended or repealed by a future Congress, even without a built-in sunset date. That distinction is why the firm is still advising some clients to consider making large gifts now, while the $15 million exemption is current law, rather than assume a number without an expiration date can never be legislated lower.
What the New Number Does Not Cover: State Taxes and Lifetime Gifts That Come First
The OBBBA’s reach stops at the federal return. Twelve states and the District of Columbia still impose their own estate or inheritance taxes with exemption thresholds well below the federal number, so a retiree who owes nothing to the IRS under the new $15 million threshold can still generate a state tax bill depending on where they lived or owned property. Anyone planning around the federal increase alone is planning around only part of the exposure their heirs could ultimately face.
The population that benefits directly from a $15 million exemption is narrow by design. The federal threshold was already high enough that estate tax reached a small share of estates before this year’s increase; raising it further mainly helps families holding a business, farmland, real estate, or concentrated investment positions large enough to approach eight figures. For most retirees, the more consequential parts of the same law are the provisions aimed at ordinary income, not the estate exemption headline making news this year.
The unified structure also means the exemption matters earlier than many people expect. Because lifetime gifts and a death-time estate draw from the same $15 million pool, a large gift made today, to help a child buy a home, fund a business, or move assets out of a taxable estate, reduces the exemption available years later, regardless of how much that exemption grows in the meantime. Anyone making a gift large enough to require a gift tax return should treat that filing as a permanent mark against the lifetime number, not a one-time transaction that resets itself.
The tension the IRS release leaves unresolved is the one Morgan Lewis flagged in its own advice: the exemption is legally permanent, but nothing stops a future Congress from lowering it again, which is why some estate attorneys are still telling wealthy clients to use today’s $15 million while it exists. For the much larger group of retirees who will never approach eight figures, the more useful number in the same release may be the one that barely moved at all, the $19,000 annual gift exclusion, which quietly lets ordinary families move money to children and grandchildren every year without ever touching the estate tax system.
This article was produced with AI assistance and reviewed against primary sources by The Money Overview editorial team.
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