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Estate Tax: Definition, Rates and Who Pays in 2025 and 2026
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Several states have this tax on the transfer of property after death. Know whether the rules and thresholds apply.
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Editor & Content Strategist
23 years of experience Expertise Taxes Small business Social Security and estate planning Home services RIATina Orem is an editor and content strategist at NerdWallet. Prior to becoming an editor and content strategist, she covered small business and taxes at NerdWallet. She has a degree in finance, as well as a master's degree in journalism and an MBA. Previously, she was a financial analyst and director of finance at public and private companies. Tina's work has appeared in a variety of local and national media outlets.
Tina Orem is an editor and content strategist at NerdWallet. Prior to becoming an editor and content strategist, she covered small business and taxes at NerdWallet. She has a degree in finance, as well as a master's degree in journalism and an MBA. Previously, she was a financial analyst and director of finance at public and private companies. Tina's work has appeared in a variety of local and national media outlets. Published in Editor & Content Strategist + more + more
Head of Content, New Verticals
11 years of experienceChris Hutchison helped build NerdWallet's editorial operation and has directed coverage across banking, investing, taxes and insurance. He now leads a team exploring new verticals. Before joining NerdWallet, he was an editor and programmer at ESPN and an editor at the San Jose Mercury News.
Chris Hutchison helped build NerdWallet's editorial operation and has directed coverage across banking, investing, taxes and insurance. He now leads a team exploring new verticals. Before joining NerdWallet, he was an editor and programmer at ESPN and an editor at the San Jose Mercury News. Head of Content, New Verticals + more + moreWhat is the federal estate tax?
What is the federal estate tax?The federal estate tax — also sometimes known as the "death tax" — is levied on a deceased person's assets. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026.
The federal estate tax — also sometimes known as the "death tax" — is levied on a deceased person's assets. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. Internal Revenue Service. Estate tax. Accessed Jan 5, 2026.2025 and 2026 estate tax exemptions
2025 and 2026 estate tax exemptionsThe estate tax exemption is per person, so a married couple could double it
The estate tax exemption is per person, so a married couple could double it Internal Revenue Service. Instructions for Form 706. Accessed Jan 5, 2026. .Several states also levy their own estate taxes on top of the federal estate tax. The state thresholds on what is subject to estate tax may be lower than the federal limit, which means you may have to pay state-level estate taxes even if you do not have to pay federal estate taxes.
Several states also levy their own estate taxes on top of the federal estate tax. The state thresholds on what is subject to estate tax may be lower than the federal limit, which means you may have to pay state-level estate taxes even if you do not have to pay federal estate taxes.To see if your state has an estate tax, check the estate tax chart below, and refer to your state's department of revenue and taxation website for the most up-to-date information.
To see if your state has an estate tax, check the estate tax chart below, and refer to your state's department of revenue and taxation website for the most up-to-date information.The more you earn, the more complex your taxes become. Learn the 10 traps to dodge.
GET THE FREE GUIDEon NerdWallet Wealth Partners' site. For informational purposes only. NerdWallet Wealth Partners does not provide tax or legal advice.
on NerdWallet Wealth Partners' site. For informational purposes only. NerdWallet Wealth Partners does not provide tax or legal advice.How the federal estate tax works
How the federal estate tax worksThe federal estate tax is assessed on the current fair market value of the assets
The federal estate tax is assessed on the current fair market value of the assets Internal Revenue Service. Frequently Asked Questions on Estate Taxes. Accessed Jan 5, 2026. . In other words, the tax is calculated based on what the assets are worth today, not the original value at the time of purchase.Assets inherited by the surviving spouse are generally not subject to the federal estate tax because of the unlimited marital deduction
Assets inherited by the surviving spouse are generally not subject to the federal estate tax because of the unlimited marital deduction Internal Revenue Service. Instructions for Form 706. Accessed Jan 5, 2026. .IRS Form 706 also has the details on exactly which assets count in the calculations for the federal estate tax, how to find their value and how to calculate what you owe. But in general, you figure the tax by applying the rates below to the amount of the estate that's subject to tax.
IRS Form 706 also has the details on exactly which assets count in the calculations for the federal estate tax, how to find their value and how to calculate what you owe. But in general, you figure the tax by applying the rates below to the amount of the estate that's subject to tax.Estate tax rates and limits
Estate tax rates and limitsTax rate
Tax rate
Tax rateTaxable amount
Taxable amount
Taxable amountTax owed
Tax owed
Tax owed18%
18%$0 to $10,000.
$0 to $10,000.18% of taxable amount.
18% of taxable amount.20%
20%$10,001 to $20,000.
$10,001 to $20,000.$1,800 plus 20% of the amount over $10,000.
$1,800 plus 20% of the amount over $10,000.22%
22%$20,001 to $40,000.
$20,001 to $40,000.$3,800 plus 22% of the amount over $20,000.
$3,800 plus 22% of the amount over $20,000.24%
24%$40,001 to $60,000.
$40,001 to $60,000.$8,200 plus 24% of the amount over $40,000.
$8,200 plus 24% of the amount over $40,000.26%
26%$60,001 to $80,000.
$60,001 to $80,000.$13,000 plus 26% of the amount over $60,000.
$13,000 plus 26% of the amount over $60,000.28%
28%$80,001 to $100,000.
$80,001 to $100,000.$18,200 plus 28% of the amount over $80,000.
$18,200 plus 28% of the amount over $80,000.30%
30%$100,001 to $150,000.
$100,001 to $150,000.$23,800 plus 30% of the amount over $100,000.
$23,800 plus 30% of the amount over $100,000.32%
32%$150,001 to $250,000.
$150,001 to $250,000.$38,800 plus 32% of the amount over $150,000.
$38,800 plus 32% of the amount over $150,000.34%
34%$250,001 to $500,000.
$250,001 to $500,000.$70,800 plus 34% of the amount over $250,000.
$70,800 plus 34% of the amount over $250,000.37%
37%$500,001 to $750,000.
$500,001 to $750,000.$155,800 plus 37% of the amount over $500,000.
$155,800 plus 37% of the amount over $500,000.39%
39%$750,001 to $1,000,000.
$750,001 to $1,000,000.$248,300 plus 39% of the amount over $750,000.
$248,300 plus 39% of the amount over $750,000.40%
40%$1,000,001 and up.
$1,000,001 and up.$345,800 plus 40% of the amount over $1,000,000.
$345,800 plus 40% of the amount over $1,000,000.Source: IRS.gov
Source: IRS.gov Source: IRS.gov» Think you'll need help? See our list of the best financial advisors
» Think you'll need help? » Think you'll need help? See our list of the best financial advisorsWhich states have an estate tax?
Which states have an estate tax?Several states have an estate tax. Many have lower asset thresholds than the federal government. Each state’s exclusion amount is in the table below.
Several states have an estate tax. Many have lower asset thresholds than the federal government. Each state’s exclusion amount is in the table below.If you live in a state with an estate tax, the good news is that (generally speaking) your estate tax bill is subtracted from the value of your taxable estate before you calculate what you might owe the IRS.
If you live in a state with an estate tax, the good news is that (generally speaking) your estate tax bill is subtracted from the value of your taxable estate before you calculate what you might owe the IRS.Estate tax exemptions by state
Estate tax exemptions by stateEstates smaller than these limits typically are not subject to state-level estate taxes. Because the state limits are usually different that the federal limits, an estate might be too small to trigger federal estate tax but still might be big enough to trigger state-level estate tax.
Estates smaller than these limits typically are not subject to state-level estate taxes. Because the state limits are usually different that the federal limits, an estate might be too small to trigger federal estate tax but still might be big enough to trigger state-level estate tax.State
State
State2025 estate tax exemption amount
2025 estate tax exemption amount
2025 estate tax exemption amountConnecticut
Connecticut$13.99 million.
$13.99 million.District of Columbia
District of Columbia$4.87 million.
$4.87 million.Hawaii
Hawaii$5.49 million.
$5.49 million.Illinois
Illinois$4 million.
$4 million.Maine
Maine$7 million.
$7 million.Maryland
Maryland$5 million.
$5 million.Massachusetts
Massachusetts$2 million.
$2 million.Minnesota
Minnesota$3 million.
$3 million.New York
New York$7.16 million.
$7.16 million.Oregon
Oregon$1 million.
$1 million.Rhode Island
Rhode Island$1.8 million.
$1.8 million.Vermont
Vermont$5 million.
$5 million.Washington
Washington$3 million.
$3 million.State
State
State2026 estate tax exemption amount
2026 estate tax exemption amount
2026 estate tax exemption amountConnecticut
Connecticut$15 million.
$15 million.District of Columbia
District of Columbia$4.99 million.
$4.99 million.Hawaii
Hawaii$5.49 million.
$5.49 million.Illinois
Illinois$4 million.
$4 million.Maine
Maine$6.8 million.
$6.8 million.Maryland
Maryland$5 million.
$5 million.Massachusetts
Massachusetts$2 million.
$2 million.Minnesota
Minnesota$3 million.
$3 million.New York
New York$7.35 million.
$7.35 million.Oregon
Oregon$1 million.
$1 million.Rhode Island
Rhode Island$1.838 million.
$1.838 million.Vermont
Vermont$5 million.
$5 million.Washington
Washington$3 million.
$3 million.» Giving money or assets away? See how the gift tax can affect you
» » Giving money or assets away? Giving money or assets away? See how the gift tax can affect youWhat is the difference between an inheritance tax and an estate tax?
What is the difference between an inheritance tax and an estate tax?A few states have an inheritance tax, which is different from an estate tax. The main difference between inheritance tax and estate tax is who pays. Inheritance taxes are paid by heirs or inheritors generally upon receiving the inherited assets. An estate tax, on the other hand, is a tax levied on the entire taxable estate itself. Executors of the estate use Form 706 to figure the amount owed
A few states have an inheritance tax, which is different from an estate tax. The main difference between inheritance tax and estate tax is who pays. Inheritance taxes are paid by heirs or inheritors generally upon receiving the inherited assets. An estate tax, on the other hand, is a tax levied on the entire taxable estate itself. Executors of the estate use Form 706 to figure the amount owed Internal Revenue Service. Instructions for Form 706. Accessed Jan 5, 2026. .A fe states have an inheritance tax, and one collects both estate and inheritance taxes.
A fe states have an inheritance tax, and one collects both estate and inheritance taxes.Inheritance tax rates often depend on the heir’s relationship to the deceased. A surviving spouse is usually exempt from state inheritance tax. Some states tax a deceased person's children, but at a low rate. More distant relatives or heirs who aren't related to the deceased usually face the highest inheritance tax rates.
Inheritance tax rates often depend on the heir’s relationship to the deceased. A surviving spouse is usually exempt from state inheritance tax. Some states tax a deceased person's children, but at a low rate. More distant relatives or heirs who aren't related to the deceased usually face the highest inheritance tax rates.» MORE: Will you owe inheritance tax?
» MORE: » MORE: Will you owe inheritance tax?The more you earn, the more complex your taxes become. Learn the 10 traps to dodge.
GET THE FREE GUIDEon NerdWallet Wealth Partners' site. For informational purposes only. NerdWallet Wealth Partners does not provide tax or legal advice.
on NerdWallet Wealth Partners' site. For informational purposes only. NerdWallet Wealth Partners does not provide tax or legal advice.How to reduce or avoid the federal estate tax
How to reduce or avoid the federal estate taxIf you want to reduce your estate taxes before you die, there are some tactics you might use to protect your property. They include:
If you want to reduce your estate taxes before you die, there are some tactics you might use to protect your property. They include:Spending your assets. If you're not afraid of running out of money before you die, enjoy your wealth.
Spending your assets. Spending your assets. If you're not afraid of running out of money before you die, enjoy your wealth.Spreading your assets. You could give away part of your estate as gifts to loved ones while you're still around. Many states don't tax gifts.
Spreading your assets. Spreading your assets. You could give away part of your estate as gifts to loved ones while you're still around. Many states don't tax gifts.Giving away your assets. If you leave property to a qualifying charity, it is deductible from the gross estate.
Giving away your assets. Giving away your assets. If you leave property to a qualifying charity, it is deductible from the gross estate.Shielding your assets in a trust. Properly created irrevocable trusts could provide a way to legally shelter some of your assets from state and federal estate taxes.
Shielding your assets in a trust. Shielding your assets in a trust. Properly created irrevocable trusts could provide a way to legally shelter some of your assets from state and federal estate taxes.Moving to a more favorable tax environment. Since most states don't have an estate tax or inheritance tax, you have many relocation options.
Moving to a more favorable tax environment. Moving to a more favorable tax environment. Since most states don't have an estate tax or inheritance tax, you have many relocation options .» MORE: How family offices work and how much they cost
» MORE: » MORE: How family offices work and how much they costIf you inherit or bequeath something, watch out for capital gains tax
If you inherit or bequeath something, watch out for capital gains taxEven if an inheritance isn't taxed when your heirs receive it, any subsequent earnings or income that it produces may be considered taxable capital gains at the federal and state levels.
Even if an inheritance isn't taxed when your heirs receive it, any subsequent earnings or income that it produces may be considered taxable capital gains at the federal and state levels.If your heirs sell an asset they inherited, any profit could be taxed at the federal level as either a long-term or short-term capital gain, depending on when they dispose of the property.
If your heirs sell an asset they inherited, any profit could be taxed at the federal level as either a long-term or short-term capital gain, depending on when they dispose of the property.If you do give your heirs a bequest, especially a sizable one, it's a good idea for them to talk with a financial advisor about the best ways to reduce capital gains tax.
If you do give your heirs a bequest, especially a sizable one, it's a good idea for them to talk with a financial advisor about the best ways to reduce capital gains tax.» MORE: How to invest $100,000
» MORE: » MORE: How to invest $100,000Freelance writer Kay Bell contributed to this article.
Freelance writer Kay Bell contributed to this article Freelance writer Kay Bell contributed to this article .SoFi Checking and Savings
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What is the federal estate tax? What is the federal estate tax? 2025 and 2026 estate tax exemptions 2025 and 2026 estate tax exemptions How the federal estate tax works How the federal estate tax works Estate tax rates and limits Estate tax rates and limits Which states have an estate tax? Which states have an estate tax? What is the difference between an inheritance tax and an estate tax? What is the difference between an inheritance tax and an estate tax? How to reduce or avoid the federal estate tax How to reduce or avoid the federal estate tax If you inherit or bequeath something, watch out for capital gains tax If you inherit or bequeath something, watch out for capital gains taxON THIS PAGE
What is the federal estate tax? What is the federal estate tax? 2025 and 2026 estate tax exemptions 2025 and 2026 estate tax exemptions How the federal estate tax works How the federal estate tax works Estate tax rates and limits Estate tax rates and limits Which states have an estate tax? Which states have an estate tax? What is the difference between an inheritance tax and an estate tax? What is the difference between an inheritance tax and an estate tax? How to reduce or avoid the federal estate tax How to reduce or avoid the federal estate tax If you inherit or bequeath something, watch out for capital gains tax If you inherit or bequeath something, watch out for capital gains tax More like this Taxes How Much Does a Financial Advisor Cost? Most financial advisors charge based on how much money they manage for you. Fees are typically 1% a year but can be lower. 2 By Andrea Coombes, Taryn Phaneuf Do You Need a Financial Advisor? 7 Ways to Tell You may need a financial advisor if you're facing big life changes, don't have financial goals, have complex compensation, high tax bills or for other reasons. Taryn Phaneuf How to Find Cheap or Free Financial Advice Quality financial advice is more accessible than ever — and much of it is free or inexpensive. Here's how to get it. Anna-Louise Jackson Retirement Calculator Are you on track to save enough for retirement? Use our calculator to check your progress, see how much retirement income you'll have and estimate how much more you should save. 2 By June Sham, Alana BensonGet matched to a financial advisor for free with NerdWallet Advisors Match.
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