For 2021, the IRS made small changes to the estate tax (and related taxes), mainly adjusting for inflation.
Federal Estate Tax Exemption -- $11.7 million.
Unless your taxable estate is worth more than $11.7 million, your estate will not owe federal estate tax if you die in 2021. This is an incremental increase from $11.58 million in 2020. Portability continues to greatly increase the power of this exemption for married couples who can now leave up to $23.4 million without paying estate tax.
Learn more about estate tax and portability.
In the handful of states that still have state estate tax. The states’ exemptions are significantly lower than the federal exemption. So an estate might be large enough to owe state estate tax even if it is not large enough to owe federal estate tax.
Learn more about state estate taxes.
Personal Gift Tax Exemption
In 2021, the personal exemption for gift tax continues to be $15,000 per recipient per year—the same amount since 2018.
Learn more about gift tax.
Noncitizen Spouse Exemption
The noncitizen spouse exemption for 2021 is $159,000, up from $157,000 in 2020..
Learn more about estate planning with a non-citizen spouse.
Read On If You Like Tax Info!
You can read the entire IRS report on inflation-adjusted numbers for 2020: Revenue Procedure 2020-45.
Effective date: Jan 01, 2021