The Internal Revenue Service (IRS) has revealed an increase in the estate and gift tax exemption for 2025. The “basic exclusion amount” will rise to $13.99 million per person in 2025, an increase from $13.61 million in 2024, as announced by the agency on Tuesday. These exemptions apply to tax-free transfers made during a person’s lifetime and at death.
In addition to the estate and gift tax exemption increase, the IRS has adjusted several other provisions. These include the federal income tax brackets, long-term capital gains tax brackets, and eligibility criteria for the earned income tax credit, among others.
Following 2025, the elevated estate and gift tax exemption, which was introduced under former President Donald Trump, will come to an end unless Congress intervenes. Should this provision expire, the exclusion is set to revert to 2017 levels, with adjustments for inflation. The Tax Cuts and Jobs Act, implemented in 2018, had previously doubled the exemption to $11.18 million, according to the Tax Policy Center.
