What Is the Estate Tax?
The federal estate tax applies to the transfer of a deceased person's assets when the taxable estate exceeds the exemption amount — most estates never owe it, since the exemption runs into the eight figures. Gift and estate tax share a single "unified credit": taxable gifts made during your lifetime above the annual exclusion reduce the lifetime exemption that remains available to shield your estate at death, so the two taxes function as one integrated system rather than two separate ones.
2027 Estate Tax Exemption (Projected)
| Category | 2027 Projected | 2026 Confirmed |
|---|---|---|
| Individual exemption | ~$15,450,000 | $15,000,000 |
| Married couple (with portability) | ~$30,900,000 | $30,000,000 |
| Applicable credit amount | ~$6,125,800 | $5,945,800 |
| Top marginal tax rate | 40% | 40% |
Portability allows a surviving spouse to use the deceased spouse's unused exemption amount by filing IRS Form 706 (estate tax return), even if no estate tax is owed. This effectively doubles the exemption for married couples without requiring a bypass trust.
Annual Gift Tax Exclusion (Projected)
The annual gift exclusion adjusts in $1,000 increments. Based on the 2026 confirmed level of $19,000 and projected inflation, the 2027 exclusion may remain at $19,000 or increase to $20,000 depending on the exact CPI-U adjustment.
| Scenario | 2027 Projected | 2026 Confirmed |
|---|---|---|
| Individual gift per recipient | ~$19,000–$20,000 | $19,000 |
| Married couple (gift-splitting) per recipient | ~$38,000–$40,000 | $38,000 |
| Gifts to non-citizen spouse | ~$200,000 | $194,000 |
The annual gift tax exclusion lets you give up to the limit to any number of recipients each year without filing a gift tax return or using any of your lifetime exemption. Married couples who elect gift-splitting on IRS Form 709 can give double the annual amount per recipient.
Lifetime Gift & GST Tax Exemption (Projected)
| Tax Type | 2027 Projected Exemption | 2026 Confirmed | Tax Rate |
|---|---|---|---|
| Estate tax | ~$15,450,000 | $15,000,000 | 40% |
| Gift tax (lifetime, unified) | ~$15,450,000 | $15,000,000 | 40% |
| Generation-skipping transfer (GST) tax | ~$15,450,000 | $15,000,000 | 40% |
The GST tax is a separate, additional layer: The generation-skipping transfer tax applies a flat 40% tax — on top of any gift or estate tax otherwise due — to transfers that skip a generation, such as a grandparent gifting directly to a grandchild, or a gift to an unrelated person more than 37.5 years younger. It exists specifically to prevent families from avoiding a full generation of estate tax by routing wealth around the middle generation. The GST exemption is numerically equal to the estate/gift exemption but is a distinct pool that must be affirmatively allocated on a gift or estate tax return — it is not automatic.
The elevated estate tax exemption amounts were originally established by the Tax Cuts and Jobs Act (TCJA) of 2017 and were extended in 2025. These projections assume the extended TCJA levels remain in effect for 2027 and beyond. Consult a qualified estate planning attorney or tax advisor regarding the current legislative status and how it affects your estate plan.
The anti-clawback rule (Treasury Reg. 20.2010-1) remains in effect: gifts made under the higher exemption will not be retroactively penalized if the exemption is later reduced.
Estate Planning Strategies
Use It Before You (Potentially) Lose It: With TCJA now extended, the acute sunset pressure that existed before 2025 has eased, but exemption levels are still set by Congress and could be reduced by future legislation. The anti-clawback rule means gifts completed today lock in today's exemption regardless of what happens later — so individuals with taxable estates generally still benefit from using gift exemption sooner rather than waiting.
Annual Exclusion Gifts: Maximize annual exclusion gifts each year to reduce your taxable estate without touching your lifetime exemption. A married couple with multiple children and grandchildren can transfer substantial amounts annually completely gift-tax-free.
Irrevocable Trusts: Assets placed in irrevocable trusts (such as ILITs, GRATs, SLATs, or dynasty trusts) are generally removed from your taxable estate. These must be established and funded while you are alive.
Portability Election: Ensure a Form 706 is filed at the first spouse's death, even if no tax is owed, to preserve the unused exemption for the surviving spouse.
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Open Budget Planner →See Confirmed 2026 Limits: For official IRS-published figures, see our 2026 Estate & Gift Tax page.
Source: IRS Rev. Proc. 2025-32 § 4.42 (annual gift exclusion) and OBBBA § 70106 amending IRC § 2010(c)(3), which set the 2026 basic exclusion amount. See IRS OBBBA provisions. These 2027 figures are projections computed from those confirmed 2026 amounts; the IRS, SSA and CMS publish official 2027 numbers in October–November 2026.
Frequently Asked Questions
What is the projected 2027 federal estate tax exemption?
The 2027 federal estate tax exemption is projected at approximately $15,450,000 per individual, applying inflation indexing to the $15,000,000 amount the OBBBA set for 2026. Married couples can effectively shield approximately $30,900,000 through portability. The official amount will be announced by the IRS in late 2026.
How much can I gift tax-free in 2027?
The projected 2027 annual gift tax exclusion is approximately $19,000–$20,000 per recipient per year. Married couples who elect gift-splitting can give double that amount. There is no limit to the number of recipients. Gifts above the annual exclusion count against your projected ~$15,450,000 lifetime exemption.
What is the projected 2027 generation-skipping transfer (GST) tax exemption?
The 2027 GST tax exemption is projected at approximately $15,450,000, matching the projected estate tax exemption. The GST tax rate remains a flat 40%, applied to transfers that skip a generation (e.g., grandparent to grandchild).
Can I appeal or adjust my estate plan based on these projections?
These are estimates only. The IRS typically announces the official inflation-adjusted figures in late October or November of the prior year. Consult a qualified estate planning attorney for advice tailored to your situation, especially given ongoing legislative changes.
How this page is reviewed
See methodology, assumptions & sources
| Risk tier | High YMYL |
|---|---|
| Author | Calculover Editorial Team Finance and legal education |
| Editorial owner | Calculover Tax & Payroll Desk Tax and wage methodology owner |
| Reviewer | Calculover Editorial Review High-risk source and limitation review |
| Last reviewed | 2026-07-31 |
| Last verified | 2026-07-31 |
| Data effective date | 2026-01-01 |
Methodology
2027 Estate & Gift Tax Exemptions (Projected) applies the tax-rate, threshold, and taxable-base logic documented in the calculator formula section, then separates user-entered assumptions from statutory or source-linked rate inputs.
Assumptions
- 2027 Estate & Gift Tax Exemptions (Projected) relies on the values the user enters and does not independently verify income, balances, legal status, policy terms, or market quotes.
- Taxable income, deductions, credits, filing status, jurisdiction, and timing are simplified to the fields available in the calculator.
- Federal, state, local, and international tax rules can change after the listed last-verified date.
Limitations
- 2027 Estate & Gift Tax Exemptions (Projected) does not prepare a tax return, determine final liability, apply every credit or deduction, or account for all state, local, foreign, penalty, or surtax rules.
- Confirm current forms, thresholds, and filing obligations with the IRS, the relevant tax authority, or a qualified tax professional before filing or paying tax.
Sources
- Estate and Gift Taxes, Internal Revenue Service
- Federal Income Tax Rates and Brackets, Internal Revenue Service
Professional guidance: 2027 Estate & Gift Tax Exemptions (Projected) is for tax education and planning only and is not tax, legal, accounting, or filing advice. Verify current rules with the relevant tax authority or a qualified tax professional.