What is the Federal Estate Tax Exemption and Federal Estate Tax Rate?

Personal Finance February 07, 2017 Print Friendly and PDF

The top estate tax rate for 2017 is 40% and there is a $5,490,000 exemption amount. Individuals can transfer up to $5,490,000 (indexed for inflation in the future) to heirs free from estate tax.

In addition, for married couples, if one spouse dies without using the full exclusion, the remainder can be added to the surviving spouse's own exclusion. This provision provides a way for couples to take advantage of each other’s exemption, without having to create complicated trusts or wills. Since widows and widowers can add any unused exclusion of the spouse who died to their own, they can effectively, together as a couple, transfer up to $10.98 million tax-free.

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.