An estate tax is levied against the estate of deceased individuals based upon the value of their assets at the time of death.
The federal estate tax exemption for 2024 is once again getting a sizable boost to $13.61 million up from $12.92 million in 2023. This number doubles for a married estate in order to exempt up to $27.22 million. This boost in 2024 represents a 5.3% increase in the estate tax exemption amount over 2023.
In 2024, a deceased person’s estate is subjugated to an estate tax based upon the size of their estate. With the 5.3% increase to the exempted estate tax coming in 2024, this brings the shielded estate size up to $13.61 million if the deceased was single or $27.22 million if the deceased was married.
Although the federal estate tax exemption has more than doubled since 2017, it is important to remember that the jump from $5,490,000 in 2017 to $11,180,000 in 2018 is set to sunset in 2026, drastically reducing the estate tax exemption amount in a couple of years. Assuming this is allowed to sunset, we should expect an estate tax exemption far below the current amounts.
Year | Federal Estate Tax Exemption (in millions) |
2016 | 5.45 |
2017 | 5.49 |
2018 | 11.18 |
2019 | 11.4 |
2020 | 11.58 |
2021 | 11.7 |
2022 | 12.06 |
2023 | 12.92 |
2024 | 13.61 |
Many states have their own state estate tax in 2024 with their own exemption amounts. This means that depending on where the estate is homed, it may be exempt from federal taxes but own considerable taxes to the state. Here are some state estate tax exemptions from 2023 (as 2024 is not yet announced for all of them).
State | Estate Tax Exemption in 2023 (in millions) |
Connecticut | 12.92 |
Hawaii | 5.49 |
Illinois | 4.00 |
Maine | 6.41 |
Maryland | 5.00 |
Massachusetts | 2.00 |
Minnesota | 3.00 |
New York | 6.58 |
Oregon | 1.00 |
Rhode Island | 1.73 |
Vermont | 5.00 |
Washington | 2.19 |
District of Columbia | 4.53 |
5.3% increase between 2023 and 2024 to account for inflation.
Increase in 2017 to sunset in 2026
Tax rate increases with estate size
Some states have an additional estate tax with unique exemptions
States that do are not expected to have an estate tax in 2024 include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming.
If you are looking to transfer some of your wealth before death, you may want to read our article on the 2024 Annual Gift Tax Exclusion.
