Federal estate tax is not a tax on every inheritance. For a U.S. citizen or resident dying in 2026, IRS guidance lists a $15,000,000 federal estate-tax filing threshold based on the gross estate plus adjusted taxable gifts and the statutory calculation. A return can still matter below that amount when a surviving spouse's portability election is desired.
State death taxes are a separate screen. Some states impose an estate tax on the estate, some impose an inheritance tax tied to the recipient, and rules can depend on domicile, property location, relationship, exemptions, and elections. Never use the federal $15 million number as a reason to skip the state check.
Federal estate tax asks about the transfer at death, not estate income after death
Form 706 is the federal estate and generation-skipping transfer tax return. It is different from Form 1041, which reports income the estate earns during administration, and from the decedent's final Form 1040. Keep the three returns on separate calendar lines.
For 2026 decedents, the IRS says the basic exclusion amount is $15,000,000. The filing calculation includes more than cash sitting in probate: life insurance in which the decedent held incidents of ownership, jointly held property, trusts, business interests, prior taxable gifts, and other assets can affect the gross estate or tax calculation.
Portability can make Form 706 relevant even when no estate tax is due
A surviving spouse may benefit from electing to use the deceased spouse's unused exclusion, commonly called DSUE. IRS estate-tax FAQs say a portability election is made on a timely filed Form 706 and can require filing even when the estate is below the ordinary threshold.
Do not decide portability from the current estate balance alone. The surviving spouse's age, assets, expected appreciation, prior gifts, remarriage possibilities, and planning goals can matter. The executor and surviving spouse should discuss the election with an estate-tax professional early enough to meet the filing rules.
The federal filing deadline is generally nine months after death
Form 706 instructions generally set the due date at nine months after the date of death, with an extension mechanism for filing. Payment extensions and filing extensions are not automatically the same thing. A return that is being filed only for portability also has special relief rules that have changed over time, so use current IRS instructions.
Nine months can pass while probate is still open. Put the estate-tax screening date on the calendar during the inventory stage rather than waiting until final accounting.
State estate tax and inheritance tax are two different questions
An estate tax is generally imposed on the estate or transfer before distribution. An inheritance tax can depend on the beneficiary and relationship to the decedent. A state can have one, the other, neither, or rules that interact with property located there. Thresholds can be much lower than the federal threshold.
The reliable source is the revenue or tax department for the state of domicile and, when real property or other situs assets are elsewhere, the other relevant state. Search the current state form and instructions using the date of death because thresholds and exemptions can change.
| Question | Federal screen | State screen |
|---|---|---|
| What tax? | Estate/GST tax under federal law | Estate tax, inheritance tax, or both/neither |
| Main return | Form 706 | State-specific return |
| 2026 threshold | IRS lists $15,000,000 filing threshold, subject to rules | Varies by state |
| Portability | Possible DSUE election for surviving spouse | State portability rules, if any, vary |
| Due date | Generally 9 months after death | State-specific |
Valuation work done for probate can feed the tax file, but not replace it
Date-of-death appraisals, brokerage values, business valuations, insurance information, debt records, and prior gift-tax returns are central to Form 706 screening. If alternate valuation, special-use valuation, marital or charitable deductions, or portability is relevant, the tax preparer may need more detail than the probate inventory requires.
Keep copies of Forms 709 if the decedent made reportable lifetime gifts. The federal estate-tax calculation can incorporate adjusted taxable gifts even though the transferred assets are no longer in the probate estate.
A screening memo lets most estates close the question quickly
Write down the decedent's domicile, citizenship/residency status, rough gross-estate categories, prior taxable gifts if known, surviving spouse status, states with real property, and whether portability might matter. Attach the IRS threshold page and relevant state revenue pages checked on that date.
If the gross-estate estimate is nowhere near the federal threshold and portability is irrelevant, the memo explains why no Form 706 was prepared. If the estimate is close, unusual, or includes business/trust/foreign assets, escalate early to an estate-tax professional.
Treat the federal $15 million 2026 basic exclusion amount as a screening figure, not a conclusion about every filing obligation. Gross-estate concepts can include property that does not pass through probate, and portability can make a timely Form 706 relevant for a surviving spouse even when no federal estate tax is payable. Separately identify the decedent's domicile and property locations for state-law review. A state estate tax or inheritance tax can apply under a different threshold, tax base, or relationship rule than the federal system.
Tax screen: “2026 U.S.-resident decedent; rough gross estate $3.8m; surviving spouse yes; prior Forms 709 unknown; rental property in another state. Federal tax likely below threshold but CPA/estate counsel to decide portability filing and second-state death-tax filing.”
Federal and state tax screens
What is the federal estate-tax threshold for someone who dies in 2026?
IRS guidance lists a $15,000,000 filing threshold for 2026, subject to the federal calculation that includes the gross estate and adjusted taxable gifts. A return can also be relevant below the threshold for a portability election or other special circumstances.
Is inheritance itself subject to federal income tax?
Receiving inherited property is not the same as earning ordinary income, but inherited assets can produce taxable income and later gains, and retirement accounts have their own income-tax rules. This article addresses estate/death taxes, not the income-tax treatment of every inherited asset.
Does a small probate estate mean no Form 706?
Not necessarily. Probate value and federal gross-estate value are not identical. Non-probate assets such as certain life insurance, jointly held property, and trust interests can be relevant. Prior taxable gifts and portability can also affect the filing analysis.
How do I know whether a state has estate or inheritance tax?
Check the current revenue or taxation department for the decedent’s state of domicile and any state where the estate has property that creates a filing connection. Do not rely on an old 50-state blog table for a filing decision because laws and thresholds change.
Does portability happen automatically for a surviving spouse?
No. Federal portability generally requires a timely and complete Form 706 election under current IRS rules, even when no estate tax is otherwise due. Because relief provisions and filing requirements can change, the executor should decide the portability question early with current IRS guidance.
Can an estate be below the federal threshold but still owe a state death tax?
Yes. State estate-tax and inheritance-tax systems use their own thresholds, exemptions, beneficiary rules, filing connections, and due dates. The federal exclusion is not a safe substitute for checking the decedent’s domicile and any state with relevant property.