The One Big Beautiful Bill (OBBB) has set the applicable exclusion amount taxes at $15 million per individual, or $30 million per married couple, starting in 2026. This amount will be indexed for inflation starting in 2027.
Notably, the OBBB has made these changes permanent. It’s been common in recent decades for tax legislation to contain sunset provisions that mean specific provisions automatically expire after a period of time. As of now, the applicable exclusion amount can only be changed by an act of Congress.
Making the amount permanent without a looming expiration date allows individuals and families to plan ahead with more certainty. As you’ll see below, the exclusion amount/unified credit has changed frequently over the years, making estate planning challenging due to uncertainty.
But first, here’s what you should know about this combined $15 million exclusion amount.
$15 Million Exclusion Amount: What to Know
*An individual may transfer up to $15 million either during life or at death without triggering any federal estate taxes, lifetime gift taxes, or generation-skipping transfer (GST) taxes.
*This amount doubles to $30 million per married couple. Portability rules mean that any amount of the $15 million exclusion a spouse did not use before his or her death can be used by the surviving spouse.
*Transfers are taxed above the limit of $15 million per individual or $30 million per married couple.
*The exclusion does not apply to transfers from one spouse to his or her U.S.-citizen spouse. Transfers of money between spouses are unlimited under the unlimited marital deduction, as long as the spouse is a U.S. citizen.
History of the Applicable Exclusion Amount / Unified Credit
Simply because it’s interesting, let’s take a look at the historical exclusion / unified credit amounts and top tax rates over the years.
Notice 1. Historically, the amount of the exclusion / credit (adjusted for inflation to 2025 dollars) before 2018 has never been close to $15 million, and 2. How much the top tax rate has varied over the years, from just 10% in 1916 to an incredible 77% from the 40s to the 70s.
2011-Present: Applicable Exclusion Amount
Starting in 2011, the “applicable exclusion amount” amount combined exemptions for federal estate taxes, lifetime gift taxes, and GST taxes, just as it does today after the OBBB.
| Year of Death: | Applicable Exclusion Amount: | Top tax rate: |
| 2026 | $15,000,000 | 40% |
| 2025 | $13,990,00 | 40% |
| 2024 | $13,610,000 | 40% |
| 2023 | $12,920,000 | 40% |
| 2022 | $12,060,000 | 40% |
| 2021 | $11,700,000 | 40% |
| 2020 | $11,580,000 | 40% |
| 2019 | $11,400,000 | 40% |
| 2018 | $11,180,000 | 40% |
| 2017 | $5,490,000 | 40% |
| 2016 | $5,450,000 | 40% |
| 2015 | $5,430,000 | 40% |
| 2014 | $5,340,000 | 40% |
| 2013 | $5,250,000 | 40% |
| 2012 | $5,120,000 | 35% |
| 2011 | $5,000,000 | 35% |
1977-2010: Unified Credit
From 1977 to 2010, the “unified credit” was used, which was the total exemption amount for federal estate taxes and lifetime gift taxes. The GST tax was introduced in 1976 but had its own separate limits.
| Year of Death: | Unified Credit Amount | Adjusted for inflation to 2025 dollars (rounded): | Top tax rate: |
| 2010* | $5,000,000* | $7,330,000 | 35% |
| 2009 | $3,500,000 | $5,250,000 | 45% |
| 2008 | $2,000,000 | $3,000,000 | 45% |
| 2007 | $2,000,000 | $3,140,000 | 45% |
| 2006 | $2,000,000 | $3,200,000 | 46% |
| 2005 | $1,500,000 | $2,500,000 | 47% |
| 2004 | $1,500,000 | $2,570,000 | 48% |
| 2003 | $1,000,000 | $1,750,000 | 49% |
| 2002 | $1,000,000 | $1,800,000 | 50% |
| 2001 | $675,000 | $1,200,000 | 55% |
| 2000 | $675,000 | $1,270,000 | 55% |
| 1999 | $650,000 | $1,260,000 | 55% |
| 1998 | $625,000 | $1,230,000 | 55% |
| 1987-1997 | $600,000 | $1,200,000-$1,700,000 | 55% |
| 1986 | $500,000 | $1,500,000 | 55% |
| 1985 | $400,000 | $1,200,000 | 55% |
| 1984 | $325,000 | $1,000,000 | 55% |
| 1983 | $275,000 | $890,000 | 60% |
| 1982 | $225,000 | $760,000 | 65% |
| 1981 | $175,000 | $640,000 | 70% |
| 1980 | $161,000 | $660,000 | 70% |
| 1979 | $147,000 | $680,000 | 70% |
| 1978 | $134,000 | $681,000 | 70% |
| 1977 | $120,000 | $650,000 | 70% |
*2010 was unusual. For most of the year, there was no federal estate tax, as a 2001 tax law repealed it for the year 2010. In December 2010, Congress passed a law retroactively reinstating federal estate tax above the exemption amount of $5 million with a 35% top tax rate. Executors/personal representatives had a choice to opt in to the $5 million limit or opt out and use carryover basis rules.
1916-1976: Estate Tax Exemption
Prior to 1977, the federal estate tax had its own exemption amount. The gift tax was not introduced until 1932, and had its own separate exemption.
| Year of Death: | Federal Estate Tax Exemption Amount | Adjusted for inflation to 2025 dollars (rounded): | Top federal estate tax rate: |
| 1942-1976 | $60,000 | $343,800- $1,200,000 | 77% |
| 1941 | $40,000 | $900,000 | 77% |
| 1940** | $40,000 | $910,000 | 70%** |
| 1935-1939 | $40,000 | $908,000-$930,000 | 70% |
| 1934 | $50,000 | $1,200,000 | 60% |
| 1933 | $50,000 | $1,230,000 | 45% |
| 1932 | $50,000 | $1,110,000 | 45% |
| 1926-1931 | $100,000 | $1,780,000-$2,000,000 | 20% |
| 1925 | $50,000 | $918,000 | 40% |
| 1924 | $50,000 | $918,000 | 40% |
| 1918-1923 | $50,000 | $945,000- $1,135,000 | 25% |
| 1917 | $50,000 | $1,360,000 | 25% |
| 1916 | $50,000 | $1,530,000 | 10% |
**In 1940, a 10% surtax added on the total tax liability to raise funds for wartime, which increased the top rate from 70% to an effective rate of 75.4%, according to the IRS.
Data taken from the IRS Estate Taxes page, IRS publication “The Estate Tax: Ninety Years and Counting” (for years 1916-2007), and IRS publication 950 (Rev. October 2011).
In the past, many more families were affected by federal estate taxes, lifetime gift taxes, and GST taxes. Now that the exclusion amount is $15 million/$30 million, most families in America do not have to factor it into their estate planning.
Estate Planning in South Carolina
For help with wills, trusts, and more, call Gem at the Gem McDowell Law Group. Gem and his team help individuals and families in South Carolina create the customized, comprehensive estate plans they need to protect their interests and provide peace of mind. Call today to schedule your free initial consultation at (843) 284-1021.
