Unified Credit (Estate Tax Exemption)
The unified credit is a federal tax credit that exempts a specified amount of assets from estate and gift taxes during a person's lifetime and at death, set at $13.99 million for 2025 and $15 million for 2026 per individual.
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Exam Tip
2025: $13.99M. 2026: $15M (OBBBA made permanent). Unified = gifts + estate combined. Portability requires Form 706 filing!
What is the Unified Credit?
The unified credit, also known as the applicable exclusion amount or estate tax exemption, is the total amount an individual can transfer during their lifetime and at death without paying federal gift or estate tax.
Unified Credit Amounts
| Year | Per Individual | Married Couple | Top Tax Rate |
|---|---|---|---|
| 2024 | $13.61 million | $27.22 million | 40% |
| 2025 | $13.99 million | $27.98 million | 40% |
| 2026 | $15.00 million | $30.00 million | 40% |
| 2027+ | Indexed for inflation | Indexed | 40% |
Note: The One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, made the $15 million exemption permanent.
Portability: Transferring Unused Exemption
| Feature | Details |
|---|---|
| What It Is | Surviving spouse can use deceased spouse's unused exemption |
| How to Elect | File Form 706 within 9 months of death (+ extensions) |
| Amount Transferred | Deceased Spousal Unused Exclusion (DSUE) |
Common Misconceptions
- "My spouse automatically gets my unused exemption." Reality: Portability requires filing Form 706 within 9 months of death, even if no tax is owed.