The 2026 federal estate tax exemption — what most Florida families don't owe

The federal estate tax exemption for 2026 is $13.99 million per individual ($27.98M for a married couple with proper portability planning). The vast majority of Florida estates do not come anywhere close to this number, and Florida itself has no state estate tax — so for most families, the federal estate tax simply doesn’t apply.

That said, “federal estate tax” gets confused with three other tax issues that do show up at probate. Here’s the actual map.

What does NOT apply to most estates

Federal estate tax (Form 706). Only required if the gross estate exceeds the $13.99M exemption. For estates above that line, the top federal rate is 40%. We see this maybe once a year in our practice. If your estate is anywhere south of $10M, this is not your concern.

Florida state estate tax. Florida abolished its state estate tax in 2005. There is no Florida-level “death tax.” None.

Florida inheritance tax. Florida has no inheritance tax. (Pennsylvania, Maryland, and a few others do — Florida does not.)

What DOES apply to almost every probate estate

Decedent’s final personal income tax return (Form 1040). The decedent’s income from January 1 through the date of death gets reported on a final 1040. Due April 15 of the year following death. The personal representative signs as fiduciary.

Estate income tax return (Form 1041). If the estate generates income during administration — interest on bank accounts, dividends on brokerage holdings, rental income from real estate — that income is taxed to the estate, not to the beneficiaries (until distributed). Form 1041 is required when the estate has $600+ of gross income in a tax year. Most estates of any size hit this.

State income tax. Florida residents owe no state income tax, so this isn’t a Florida issue. It does come up if the decedent owned property generating income in another state.

The portability question

For couples, the deceased spousal unused exclusion (DSUE) — known as portability — lets a surviving spouse use the deceased spouse’s unused exemption. To preserve it, you have to file Form 706 even if no estate tax is owed, within 9 months of death (or 15 months with an extension).

For a 2026 death, this is roughly $13.99M of unused exemption that the surviving spouse can carry forward. If the surviving spouse later dies with appreciation that pushed the combined estate above the exemption, that DSUE is what keeps the family out of estate tax territory.

We file portability returns for couples where it’s likely to matter — typically families with $5M+ in assets, where appreciation over the surviving spouse’s remaining lifetime could realistically reach the exemption. For smaller estates, the cost-benefit usually doesn’t justify it.

What about the One Big Beautiful Bill (OBBBA)?

The 2025 federal tax legislation made the elevated exemption (originally a 2017 TCJA temporary doubling) permanent. Before OBBBA, the exemption was scheduled to sunset back to roughly $7M in 2026. After OBBBA, $13.99M is the new baseline (subject to ongoing inflation adjustment).

For Florida planning, this stabilizes things considerably. The “race against the sunset” planning conversations many firms ran in 2024–2025 are largely moot now.

What we tell clients

If your estate is anywhere under $10M, federal estate tax is not your problem. The 1041 (estate income tax) and the final 1040 (decedent’s last income tax return) usually are. We coordinate both with your CPA — or refer one if you don’t have one — as part of formal administration. There’s no separate fee for the coordination; it’s part of the standard scope.

If your estate is over $10M and growing, the conversation shifts to lifetime gifting strategies, irrevocable trusts, and portability — that’s planning territory, not probate. We can talk through it on a planning consult.

For everyone in between: relax about the federal estate tax. You don’t owe it. The estate income tax return is the one your PR will actually deal with.