26 U.S.C. § 2010
§ 2010. Unified credit against estate tax
Explainer
The estate tax exemption
Estates owe federal estate tax only above $15 million per person in 2026 ($30 million for a married couple) — a level the 2025 law made permanent and now indexes for inflation.
In plain English
When someone dies, the federal estate tax applies to everything they owned above an exemption amount. The is 40%. Section 2010 sets that exemption, officially the "basic exclusion amount". It's shared with the gift tax: large gifts made during your life use up part of the same exemption.
The 2025 law set it at $15 million per person for 2026, adjusted for inflation after that, and removed the scheduled cut in half that would otherwise have happened in 2026.
Who it touches
Very few estates. Only a tiny fraction of deaths each year lead to any federal estate tax. Many more people are affected by the related rules, though: the annual gift exclusion, the "step-up" in that heirs receive, and state estate and inheritance taxes, which often start at much lower amounts.
The 2026 numbers
| Item | Amount |
|---|---|
| Exemption per person | $15,000,000 |
| Married couple (with portability) | $30,000,000 |
| Top estate and gift tax rate | 40% |
| Annual gift exclusion, per recipient | $19,000 |
| Gifts to a non-citizen spouse, per year | $194,000 |
Portability: when the first spouse dies, the unused exemption can pass to the surviving spouse, but only if an estate tax return (Form 706) is filed, even when no tax is owed.
Worked example
Robert dies in 2026 with an estate of $18 million and no surviving spouse.
- Taxable amount above the exemption: $18M − $15M = $3 million
- Estate tax at 40%: about $1.2 million
If he had been married and left everything to his US-citizen wife, the unlimited marital would mean no tax at his death. If his executor elected portability on a timely Form 706, his unused $15 million would carry over to her. Added to her own exemption, which keeps rising with inflation, that lets her pass on about $30 million or more tax-free.
Watch out for
- Non-citizen spouses don't get the unlimited marital deduction unless assets pass through a qualified domestic trust (QDOT).
- aliens who own US assets, such as US stocks or real estate, get only a $60,000 exemption on those assets, unless a gives more.
- Twelve states and the District of Columbia have their own estate tax, and some states tax inheritances, with thresholds as low as $1 million or less.
Draft explainer. Figures checked against IRS Rev. Proc. 2025-32 and the current text on November 5, 2026. Not yet reviewed by a licensed tax professional.
Sources
History
Changed by the 2025 tax lawAdded in 1976 by the Tax Reform Act of 1976. Last changed July 4, 2025 by the One Big Beautiful Bill Act (2025).
Every change, newest first (9)
- July 4, 2025One Big Beautiful Bill Act (2025)
- December 22, 2017Tax Cuts and Jobs Act (2017)
- January 2, 2013American Taxpayer Relief Act of 2012
- December 17, 2010Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
- June 7, 2001Economic Growth and Tax Relief Reconciliation Act of 2001
- August 5, 1997Taxpayer Relief Act of 1997
- November 5, 1990Omnibus Budget Reconciliation Act of 1990
- August 13, 1981Economic Recovery Tax Act of 1981
- October 4, 1976Tax Reform Act of 1976 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
A credit of the applicable credit amount shall be allowed to the estate of every decedent against the tax imposed by section 2001.
The amount of the credit allowable under subsection (a) shall be reduced by an amount equal to 20 percent of the aggregate amount allowed as a specific exemption under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) with respect to gifts made by the decedent after September 8, 1976.
For purposes of this section, the applicable credit amount is the amount of the tentative tax which would be determined under section 2001(c) if the amount with respect to which such tentative tax is to be computed were equal to the applicable exclusion amount.
For purposes of this subsection, the applicable exclusion amount is the sum of—
the basic exclusion amount, and
in the case of a surviving spouse, the deceased spousal unused exclusion amount.
For purposes of this subsection, the basic exclusion amount is $15,000,000.
In the case of any decedent dying in a calendar year after 2026, the dollar amount in subparagraph (A) shall be increased by an amount equal to—
such dollar amount, multiplied by
the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “calendar year 2025” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.
For purposes of this subsection, with respect to a surviving spouse of a deceased spouse dying after December 31, 2010, the term “deceased spousal unused exclusion amount” means the lesser of—
the basic exclusion amount, or
the excess of—
the applicable exclusion amount of the last such deceased spouse of such surviving spouse, over
the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.
A deceased spousal unused exclusion amount may not be taken into account by a surviving spouse under paragraph (2) unless the executor of the estate of the deceased spouse files an estate tax return on which such amount is computed and makes an election on such return that such amount may be so taken into account. Such election, once made, shall be irrevocable. No election may be made under this subparagraph if such return is filed after the time prescribed by law (including extensions) for filing such return.
Notwithstanding any period of limitation in section 6501, after the time has expired under section 6501 within which a tax may be assessed under chapter 11 or 12 with respect to a deceased spousal unused exclusion amount, the Secretary may examine a return of the deceased spouse to make determinations with respect to such amount for purposes of carrying out this subsection.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection.
The amount of the credit allowed by subsection (a) shall not exceed the amount of the tax imposed by section 2001.