New 2026 Estate Tax Exemption Amount
The IRS has increased the estate exemption amount, potentially benefiting inheritances and estates in the upcoming tax year.
Some states impose their own estate tax, with varying exemption amounts. For example, Massachusetts has a state exemption of $2 million, which is not indexed for inflation.
- Nebraska imposes an inheritance tax on adult children when inheritances exceed $100,000.
- Kentucky has a $1,000 exemption for nephews and nieces.
The Alternative Minimum Tax (AMT) was implemented to ensure higher-income taxpayers pay a minimum amount of tax.
According to the Tax Policy Center, 5.2 million Americans paid the AMT before the Tax Cuts and Jobs Act (TCJA).
Author's summary: IRS increases estate exemption amount for 2026.