IRS Raises Estate Tax Exclusion to $15.48 Million

The federal basic exclusion amount for estate and gift taxes rises for 2027 as the IRS applies annual inflation adjustments.

Updated on Nov. 5, 2026 in Taxes

IRS Raises Estate Tax Exclusion to $15.48 Million

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The IRS raised the federal estate and gift tax basic exclusion amount to $15.48 million per person for 2027, up from $15 million in 2026. The IRS also increased inflation adjustments for federal income tax brackets, capital gains brackets, and the earned income tax credit for 2027.

Why it matters

The adjustment keeps the exemption tied to inflation, shielding more transfers during life and at death from federal estate and gift tax. State estate and inheritance tax exemptions can be lower than the federal exemption, so some estates may still owe state taxes.

The IRS adjusted the basic exclusion amount upward to $15.48 million for 2027 from $15 million in 2026 through its annual inflation indexing. Federal estate tax returns for 2026 are projected at about 6,890, with roughly 3,900 expected to be taxable, and the extraction does not say how the 2027 change will alter those counts.

The details

The increase applies to tax-free transfers during life and at death and was announced Thursday alongside inflation adjustments for federal income tax brackets, capital gains brackets, and earned income tax credit eligibility. Without Congress's change to the exemption, the threshold would have reverted to 2017 levels of $5 million plus inflation after 2025.

2017: Pre-change estate exemption baseline of $5 million plus inflation.
After 2025: Exemption would have reverted without Congress's change.
2026: Exemption was $15 million; about 6,890 estate tax returns filed.
2027: Basic exclusion amount rises to $15.48 million.

Market Dynamics

The 2027 increase extends the $15 million per-person exemption set by the 'big beautiful bill,' which kept the threshold from reverting to the roughly $5 million-plus-inflation level that applied in 2017. Annual inflation indexing now carries that higher baseline forward year by year.

Estate planners and families with assets near the threshold may need to revisit gifting and estate strategies as the exemption rises to $15.48 million for 2027. Those with property in states that levy their own estate or inheritance taxes should check those lower exemptions separately.

The takeaway

Because the federal exemption is indexed to inflation, the threshold will keep changing each year, so estate plans should be reviewed periodically rather than set once. Checking state-level estate and inheritance tax rules remains essential even when federal tax is not owed.