For deaths and gifts in 2026, the federal basic exclusion amount is $15,000,000 per person under Public Law 119-21, §70106, which also struck the temporary rule that was due to end on December 31, 2025; the amount is adjusted for inflation from 2027.
Public Law 119-21 (H.R. 1) was approved July 4, 2025. Its section 70106 rewrote the exemption that shelters both lifetime gifts and the estate at death. This guide explains what changed, what it means for a married couple, and what the 2026 gift figures are. To run your own numbers, use the calculator.
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What section 70106 changed
Section 70106(a) amends 26 U.S.C. §2010(c)(3) in three ways: it replaces "$5,000,000" with "$15,000,000" in subparagraph (A), moves the inflation base in subparagraph (B) to calendar year 2025, and strikes subparagraph (C). Section 70106(b) applies the change "to estates of decedents dying and gifts made after December 31, 2025" (Public Law 119-21).
Subparagraph (C) was the 2017 increase. The 2024 edition of the Code, published before the new law, still shows it: the $5,000,000 base amount, replaced by $10,000,000 only for years "after December 31, 2017, and before January 1, 2026" (26 U.S.C. §2010, 2024 edition). Without section 70106, 2026 would have gone back to the inflation-adjusted $5,000,000 base. With subparagraph (C) struck, that return to the lower base no longer happens.
The IRS applies the new amount: "Section 70106 of the OBBBA amends § 2010(c)(3) by increasing the basic exclusion amount to $15,000,000 for calendar year 2026" (Rev. Proc. 2025-32, §2.14). In 2025, it was $13,990,000 (Rev. Proc. 2024-40, §3.41).
The 2026 figures at a glance
| Figure | Amount | Source |
|---|
| Basic exclusion amount, 2026 | $15,000,000 | P.L. 119-21 §70106; Rev. Proc. 2025-32 §2.14 |
| Basic exclusion amount, 2025 | $13,990,000 | Rev. Proc. 2024-40 §3.41 |
| Unified credit on $15,000,000 | $5,945,800 | Form 706 instructions |
| Top rate | 40% above $1,000,000 | 26 U.S.C. §2001(c) |
| Annual gift exclusion, per recipient | $19,000 | Rev. Proc. 2025-32 §4.42(1) |
| Gifts to a spouse who is not a US citizen | $194,000 | Rev. Proc. 2025-32 §4.42(2) |
| Generation-skipping transfer exemption | $15,000,000 | Rev. Proc. 2025-32 §2.14 |
| 2027 amounts | Not yet published (September 28, 2026) | §2010(c)(3)(B), as amended |
Inflation indexing from 2027
From 2027, the $15,000,000 is increased by the cost-of-living adjustment of §1(f)(3), measured from calendar year 2025, and rounded to the nearest multiple of $10,000 (§2010(c)(3)(B), as amended by section 70106(a)(2)). The IRS says the amount "will be adjusted for inflation for calendar year 2027 and future years" (Rev. Proc. 2025-32, §2.14). The 2026 amounts were announced on October 9, 2025 (IR-2025-103); as of September 28, 2026, the IRS has not published the 2027 amount, so this guide gives no figure for it.
How the estate tax is worked out
The tax is a tentative tax, under the §2001(c) schedule, on the taxable estate plus adjusted taxable gifts (taxable gifts made after 1976), less the unified credit (§2001(b), §2010). The credit on $15,000,000 is $5,945,800, the "Credit Equivalent at 2026 Rates" in the Form 706 instructions. When no gift tax has ever been paid, the result is 40% of the taxable estate plus adjusted taxable gifts above $15,000,000.
- Taxable estate of $20,000,000, no taxable gifts: tentative tax $7,945,800, less the $5,945,800 credit: $2,000,000.
- Taxable estate of $10,000,000 plus $8,000,000 of adjusted taxable gifts, no gift tax paid: tentative tax on $18,000,000 is $7,145,800, less $5,945,800: $1,200,000. Lifetime gifts and the estate share one exemption.
- Taxable estate of $14,000,000, no taxable gifts: $0. A Form 706 is still required if the gross estate, before deductions, plus adjusted taxable gifts, is more than $15,000,000 (Form 706 instructions).
What it means for a married couple
The marital deduction. Property that passes to a surviving spouse is deducted from the estate (§2056(a)). If the surviving spouse is not a US citizen, there is no deduction unless the property passes to a qualified domestic trust (§2056(d)).
Portability. The exclusion the first spouse does not use can pass to the survivor as the deceased spousal unused exclusion (DSUE) amount: the lesser of the basic exclusion amount and the part of the deceased spouse's applicable exclusion amount not used by their taxable estate plus adjusted taxable gifts (§2010(c)(4)). The survivor's exclusion is then their own basic exclusion amount plus the DSUE (§2010(c)(2)).
- First death in 2026, no DSUE received, taxable estate of $3,000,000 (the rest left to the spouse) and $1,000,000 of adjusted taxable gifts: the DSUE is $15,000,000 − $4,000,000 = $11,000,000.
- Surviving spouse's death in 2026 with a taxable estate of $25,000,000 and a DSUE of $15,000,000: the credit covers $30,000,000, so the federal estate tax is $0.
The election on Form 706. The DSUE passes only if the executor "files an estate tax return on which such amount is computed and makes an election on such return"; the election is irrevocable, and it cannot be made on a return filed after the time allowed, including extensions (§2010(c)(5)(A)). The return is due within 9 months of the death, or before the end of the 6-month extension (Form 706 instructions). A return is needed to elect portability even when no tax is due.
Limits. Only the DSUE of the last deceased spouse counts, and on a taxable gift the DSUE is used before the survivor's own basic exclusion amount. A surviving spouse who is neither a US citizen nor a US resident cannot use a DSUE amount, except as allowed by a tax treaty (Form 706 instructions).
Missed the deadline? The five-year window of Rev. Proc. 2022-32
Rev. Proc. 2022-32 lets an executor elect portability late when all of these apply (§3.01): the deceased was survived by a spouse, died after December 31, 2010, and was a US citizen or resident; the estate did not have to file a Form 706 based on the gross estate and adjusted taxable gifts; and no return was filed on time.
- Deadline: a complete Form 706 filed "on or before the fifth annual anniversary of the decedent's date of death" (§4.01(1)).
- Statement: the top of the return must say "FILED PURSUANT TO REV. PROC. 2022-32 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)." (§4.01(2)).
- Not available to an estate that was required to file, because its deadline is set by the statute (§3.03). If the estate later turns out to have been required to file, the extension is "deemed null and void ab initio" (§4.03).
- It does not extend the period for the surviving spouse to claim a credit or refund (§5.01).
Gifts in 2026: the $19,000 annual exclusion
The first $19,000 of gifts to each person in 2026 is excluded, for gifts of a present interest (Rev. Proc. 2025-32, §4.42(1)), the same amount as in 2025 (Rev. Proc. 2024-40, §3.43). Gifts to a spouse who is a US citizen are deducted without limit (§2523(a)); for a spouse who is not a US citizen, the exclusion is $194,000 in 2026 (Rev. Proc. 2025-32, §4.42(2)). Tuition paid directly to a school and medical bills paid directly to the provider are not gifts (§2503(e)).
A gift above the exclusion must be reported on Form 709 (§6019), filed by April 15 of the year after the gift (Form 709 instructions). Reporting a gift is not the same as paying tax on it: the taxable part uses up the same lifetime exemption as the estate, and gift tax is due only once that exemption is used up (§2505).
- $50,000 to a child in 2026: taxable gift of $31,000, Form 709 required, no tax, and $14,969,000 of exemption left.
- The same gift, split with a spouse (§2513): $25,000 treated as given by each spouse, so $6,000 taxable for each. Splitting always requires a Form 709, whatever the amount (Form 709 instructions).
- $60,000 of tuition paid directly to the university: not a gift, and no Form 709 for that payment alone (§6019(1)).
What this guide does not cover
State estate and inheritance taxes (your state may also tax estates or inheritances; those paid to a state are deducted from the federal taxable estate under §2058, see the Form 706 instructions), the mechanics of the generation-skipping transfer tax, nonresidents who are not US citizens, the valuation of assets, estates that have already paid gift tax, and the income tax of heirs.
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Federal rules checked against the primary sources linked above on September 28, 2026, for US citizens and residents and for deaths and gifts in 2026. This is general information, not tax or legal advice.
