Federal Estate Tax History
How the federal estate tax has evolved from its creation in 1916 through 44 legislative changes to today's $15.0 million exemption.
| Year | Exemption | Top Rate |
|---|---|---|
| 1916 | $50,000 | 10% |
| 1917 | $50,000 | 25% |
| 1926 | $100,000 | 20% |
| 1932 | $50,000 | 45% |
| 1935 | $40,000 | 70% |
| 1941 | $40,000 | 77% |
| 1942 | $60,000 | 77% |
| 1976 | $60,000 | 70% |
| 1977 | $120,667 | 70% |
| 1981 | $175,625 | 70% |
| 1982 | $225,000 | 65% |
| 1983 | $275,000 | 60% |
| 1984 | $325,000 | 55% |
| 1985 | $400,000 | 55% |
| 1986 | $500,000 | 55% |
| 1987 | $600,000 | 55% |
| 1997 | $600,000 | 55% |
| 1998 | $625,000 | 55% |
| 1999 | $650,000 | 55% |
| 2000 | $675,000 | 55% |
| 2001 | $675,000 | 55% |
| 2002 | $1,000,000 | 50% |
| 2003 | $1,000,000 | 49% |
| 2004 | $1,500,000 | 48% |
| 2005 | $1,500,000 | 47% |
| 2006 | $2,000,000 | 46% |
| 2007 | $2,000,000 | 45% |
| 2008 | $2,000,000 | 45% |
| 2009 | $3,500,000 | 45% |
| 2010 | Repealed | - |
| 2011 | $5,000,000 | 35% |
| 2012 | $5,120,000 | 35% |
| 2013 | $5,250,000 | 40% |
| 2014 | $5,340,000 | 40% |
| 2017 | $5,490,000 | 40% |
| 2018 | $11,180,000 | 40% |
| 2019 | $11,400,000 | 40% |
| 2020 | $11,580,000 | 40% |
| 2021 | $11,700,000 | 40% |
| 2022 | $12,060,000 | 40% |
| 2023 | $12,920,000 | 40% |
| 2024 | $13,610,000 | 40% |
| 2025 | $13,990,000 | 40% |
| 2026 | $15,000,000 | 40% |
Source: IRS Form 706 / Revenue Procedures, Tax Foundation IRS Form 706 / Revenue Procedures, Tax Foundation Years shown represent key legislative changes; rates and exemptions remained unchanged in unlisted years
Key Legislative Eras
1916–1976: The Tax Foundation Years. The estate tax was created to fund World War I with a $50,000 exemption and 10% rate. Rates peaked at 77% during World War II. For 60 years, exemptions remained low and rates remained high.
1976–2001: The Unified Era. The Tax Reform Act of 1976 unified estate and gift taxes. The Economic Recovery Tax Act of 1981 began a long phase-in of higher exemptions, reaching $600,000 by 1987, with a top rate of 55%.
2001–2012: The EGTRRA Experiment. The Economic Growth and Tax Relief Reconciliation Act scheduled dramatic rate reductions, with the estate tax fully repealed for one year (2010). The Tax Relief Act of 2010 restored it at $5M/35% and introduced portability.
2013–2025: The TCJA Era. The American Taxpayer Relief Act (2013) permanently set the exemption at $5M+ (indexed for inflation) with a 40% rate. The 2017 Tax Cuts and Jobs Act roughly doubled the exemption to $11.18M, reaching $13.99M by 2025.
2026 onward: The OBBBA Era. The TCJA doubling was scheduled to sunset after 2025 and revert to roughly $7 million, but the One Big Beautiful Bill Act (Pub. L. 119-21), signed July 4, 2025, repealed that sunset and set a permanent $15 million per-individual exemption effective January 1, 2026, indexed for inflation. The top rate remains 40% and portability remains in place.
This information is for educational purposes only and does not constitute legal or tax advice. Consult a qualified estate planning attorney or CPA for advice specific to your situation.
Every figure on PlainEstate is rendered directly from IRS Statistics of Income and state statutory data, no number is typed in by an editor. This page draws directly on IRS Statistics of Income and state statutory data, no figure is typed in by an editor. See our editorial standards & corrections policy, the methodology behind these numbers, or report a data error.