The Estate and Gift Tax Exemption Is Now Permanent: 2026 Planning Implications

Part of our 2025 Tax Law Changes guide — the complete breakdown of the One Big Beautiful Bill Act.

For years, estate planners worked against a ticking clock: a scheduled sunset that would have roughly halved the federal estate, gift, and generation-skipping transfer (GST) tax exemption. That cliff is gone. Recent legislation made the higher unified exemption permanent and reset it beginning in 2026 — a significant shift in how families and their advisers should plan.

What changed

Rather than reverting to a lower figure, the exemption was made permanent at a higher level — roughly $15 million per individual beginning in 2026 (about $30 million for a married couple using portability), indexed for inflation. Confirm the exact indexed amount for the year in question before relying on it.

What it means for planning

• Less “use it or lose it” pressure. The urgency created by the looming sunset has eased, so aggressive year-end gifting purely to lock in exemption is less necessary.
• Large-estate planning still matters. Trusts, lifetime gifting, GST planning, and valuation discounts remain relevant above the exemption.
• Don’t forget the states. Several states impose their own estate or inheritance tax with far lower thresholds than the federal exemption.
• Basis step-up vs. gifting. With more room under the exemption, holding appreciated assets until death for a step-up in basis becomes a more attractive trade-off in many cases.

Action items

• Revisit plans that were built around the sunset — some may now be over-engineered.
• Confirm portability elections are handled with a timely estate tax return where beneficial.
• Layer in state-level estate/inheritance exposure for clients in taxing states.

Keep your skills current

Tax law and accounting standards move fast — continuing education keeps you ahead. Browse the course catalog, cover a full year with an Unlimited Access plan, or compare all CPE plans. Need a refresher on your state’s rules? Check your CPE requirements.

This article is general information for tax and accounting professionals and is not legal, tax, or accounting advice. Rules, dollar thresholds, and state provisions change and vary — always confirm current figures and requirements with the IRS, your state authority, the FASB/AICPA, or qualified counsel before acting or advising clients.