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New York & North Carolina

IRS Announces 2023 Estate and Gift Tax Exemption Amounts

Parisi, Coan & Saccocio, PLLC

The IRS recently announced an adjustment to the exemption amount for estate and gift taxes in 2023 due to the high rates of inflation. The increase is part of the agency's yearly adjustments for inflation, which have an impact on the standard deduction, federal income tax brackets, and numerous other provisions.

Estate and Gift Tax Exemption

The amount you can give during your lifetime or after your death to avoid paying federal estate and gift taxes has increased from $12,060,000 to $12,920,000, according to the IRS.

A married couple could therefore gift more than $25 million in assets without paying taxes. However, this exemption will be eliminated in 2026 when it returns to the previous exemption amount of $5 million (inflation adjusted), or $7,000,000.

The marital deduction for gift and estate taxes remains unlimited for surviving spouses, except for surviving spouses who are not U.S. Citizens. The marital deduction for spouses who are not citizens is $175,000 for 2023.