The Internal Revenue Service has issued exemption and exclusion inflation adjustments for tax year 2022. For estate, gift and generation-skipping transfer taxes, adjusted exemptions and exclusions are as follows:
- For gifts made in 2022 and for estates of decedents who die during 2022, the new estate tax, gift tax and generation-skipping transfer tax exemption amount is $12,060,000 (or $24,120,000 for a married couple that elects to split gifts on gift tax returns), up from a 2021 exemption amount of $11,700,000 (or $23,400,000 for a gift-splitting married couple).
- For gifts made in 2022 to a spouse who is not a U.S. citizen, the gift tax exclusion amount is $164,000, up from $159,000 in 2021.
- The gift tax annual exclusion for 2022 gifts is $16,000 per donee (or $32,000 per donee for a gift-splitting married couple), up from $15,000 per donee (or $30,000 per donee for a gift-splitting married couple) in 2021.
On January 1, 2026, the estate tax, gift tax and generation-skipping transfer tax exemption amount is scheduled to be reduced to $5,000,000, adjusted for inflation ($10,000,000, adjusted for inflation for a gift-splitting married couple). Individuals, including those who used all of their available exemption through 2021, may wish to consider making additional gifts in 2022 to take advantage of the increased estate tax, gift tax and generation-skipping transfer tax exemption. An individual or gift-splitting married couple who had used up all available exemption through 2021 may transfer an additional $360,000 or $720,000, respectively, in 2022 without triggering gift tax or generation-skipping transfer tax.