On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBBA), P.L. 119-21. Section 70106 of that Act amends IRC § 2010(c)(3) to increase the base amount for the unified estate and gift tax credit from $5,000,000 to $15,000,000, effective for estates of decedents dying and gifts made after December 31, 2025. The OBBBA also strikes the prior TCJA sunset provision (the former § 2010(c)(3)(C)) that would have reverted the exemption to approximately $7 million per person in 2026.
The combined effect is to raise the exemption to $15,000,000 per individual ($30,000,000 for married couples using portability) and make it permanent — with annual inflation indexing beginning in 2027 using 2025 as the base year. The TCJA had doubled the pre-2018 exemption of approximately $5.49 million and indexed it from 2017 onward; by 2025, the TCJA exemption had grown to $13,990,000. Without OBBBA, it would have dropped to approximately $7.2 million on January 1, 2026. Instead, OBBBA raised it further to $15 million.
The generation-skipping transfer (GST) tax exemption under § 2631(c) moves in parallel with the estate and gift exemption, also reaching $15 million. The annual gift tax exclusion under § 2503(b) is separately set at $19,000 per recipient for 2026 (unchanged from 2025) and is not affected by the OBBBA provision.
As of June 25, 2026, wealth management practitioners are actively publishing guidance on the planning implications of the permanent exemption — particularly for clients who made accelerated lifetime gifts in 2024–2025 in anticipation of the TCJA sunset, and for those needing to update formula clauses in existing trusts.
Key Provisions
- IRC § 2010(c)(3)(A) as amended: The base amount for computing the unified credit is $15,000,000 (previously $5,000,000 as adjusted by TCJA).
- IRC § 2010(c)(3)(B) as amended: The $15,000,000 base is indexed for inflation beginning in calendar year 2026 (base year: 2025), using the Chained CPI.
- Sunset provision struck: OBBBA § 70106(a)(3) strikes former § 2010(c)(3)(C). There is now no scheduled sunset unless Congress enacts one.
- GST exemption parallel: § 2631(c) ties the GST exemption to the basic exclusion amount; it also rises to $15,000,000 per individual (not portable between spouses, unlike the estate tax exemption).
- Anti-clawback protection preserved: Treas. Reg. § 20.2010-1(c) (finalized 2019) confirms that lifetime gifts made under an elevated exemption are not retroactively taxed at death if the exemption subsequently decreases.
- Estate tax rate unchanged: The 40% marginal rate under § 2001(c) on amounts above the exemption is unchanged.
- Annual gift exclusion unchanged: § 2503(b) exclusion remains $19,000 per donee for 2026 ($38,000 for married couples using gift-splitting under § 2513).