2022 Estate Tax Exemptions
Happy New Year! The federal estate tax exemption is adjusted for inflation every year. The estate and gift tax exemption at the federal level for 2022 is $12.06 million per individual. That means an individual can leave $12.06 million to heirs and pay no federal estate or gift tax, while a married couple will be able to leave $24.12 million without federal estate tax being assessed. This is not the case for Washington State Estate tax, which has a much lower ($2,193,000) exemption amount.
The annual gift exclusion in 2022 increased to $16,000.
Washington State estate tax exemption amount remains $2,193,000.00. This lower exemption amount seems to be catching clients off guard. Many clients do not know that life insurance policies, the fair market value of their homes, business, etc. is included in the Washington State Estate Tax calculation and that unless estate planning action is taken the exemption is not automatically doubled for married couples.
The current exemption, doubled under the Tax Cuts and Jobs Act, is set to expire in 2026. President Biden’s Build Back Better Act, as passed by the House, does not change the exemption, but it still awaits passage in the Senate.
With the federal exemption rate this high, the majority of the tax planning clients will need at this point in time is for Washington Estate Tax. Washington currently has the highest estate tax rate in the nation.
Review our prior blog posts on how estate tax is calculated.
We are happy to assist clients with their estate planning needs. Feel free to email us with any questions.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and should not be construed as legal advice from Leos & Gilkerson, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a licensed lawyer.