Estate Tax Exposure Calculator: Federal + State Exposure at Death

Federal is rare. State is the more common exposure.

At a $13.99M-per-individual federal exemption (effectively $27.98M for married couples via portability), the federal estate tax hits a tiny fraction of estates — IRS data shows fewer than 5,000 federal estate-tax returns owe tax in a typical year, out of ~3 million annual deaths. That makes federal exposure a top-1% problem in pure numerical terms.

State exposure is where most planning attention should go. Twelve states plus DC have an estate tax: Washington's $2.193M exemption with a 20% top rate hits estates that nowhere near touch the federal threshold. Oregon's $1M exemption catches a $3M home + 401(k) easily. Massachusetts, Maine, New York, Connecticut, Illinois, Maryland, Minnesota, Rhode Island, Vermont, Hawaii — each with its own quirks. Six other states (Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania) have an inheritance tax instead, paid by the heirs based on their relationship to the deceased. Maryland is the only state with both. If you live in one of these states with a substantial estate, the state tax is usually the binding constraint.

How the math works

1. Federal exemption = $13,990,000 × (1 if single, 2 if MFJ via portability) − lifetime taxable gifts already counted against the unified exemption.
2. Federal taxable estate = max(0, gross estate − federal exemption).
3. Federal estate tax = taxable × 40%. (The actual brackets are progressive 18-40%, but the unified credit shelters everything below the exemption — exposed dollars hit the 40% rate within rounding.)
4. State estate tax = max(0, gross − state exemption) × state top rate.
5. Heirs receive = gross − total tax.

Sources: IRS Pub 559 (Survivors, Executors, and Administrators), Pub 950 (Estate and Gift Taxes Intro), Rev. Proc. 2024-40 for the 2025 indexed exemption, IRC §2010 for the unified credit. State exemption/rate references from each state's department of revenue.

Math runs locally. Inputs never leave your browser. Source on github.

Where this calculation doesn't apply

• Inheritance-tax states. IA, KY, MD, NE, NJ, PA tax the heirs based on relationship to the deceased (spouses usually 0%, distant relatives or non-relatives up to 15-18%). Use the state exposure here as a rough proxy — the actual calc varies by heir.
• Assets in irrevocable trusts. Properly-structured ILITs, GRATs, IDGTs, and similar vehicles remove assets from the taxable estate. The "gross estate" input should EXCLUDE these — they're separately not in the calculation.
• Charitable bequests. Charitable transfers at death are fully deductible from the estate. Subtract any planned charitable bequest from the gross-estate input.
• TCJA sunset 2026. The federal exemption is scheduled to roughly halve back to ~$7M (inflation-adjusted) on 2026-01-01 unless Congress extends. If planning for past then, model with the lower exemption.
• Generation-skipping transfers. GSTT can add an additional 40% layer on transfers to grandchildren or other "skip persons" above the GST exemption. Not modeled here.

What to actually do

1. Get a real number. Add up everything you own outright + retirement accounts + life insurance (with you as owner) + business interests + real estate market value, minus debts.
2. Check your state's estate-tax exemption and top rate. If you're above the state exemption, the state tax is usually larger than any federal exposure.
3. If exposed at either level, consider: annual exclusion gifting (see related tool), step-up basis hold strategies (see related tool), and life insurance to fund estate-tax liquidity (also related).
4. For estates clearly above the federal exemption, talk to an estate-planning attorney about irrevocable trust structures — the savings on a single ILIT or GRAT pay the lawyer many times over.
5. Plan with the post-2026 sunset assumption if your horizon is longer than 1-2 years. Use today's exemption as the floor, sunset's as the ceiling.