estate taxes 2021
FEDERAL ESTATE TAX:
An executor or administrator must file a federal estate tax return if the gross estate is more than the decedent's available estate tax exemption, taking into account prior gifts. The exemption, which is indexed for inflation and adjusts annually, is $11.7 million in 2021.
The portability of the federal estate tax exemption between spouses enables a surviving spouse to carry over or “port” some or all of his or her predeceased spouse’s unused estate tax exemption amount ($11.7 million in 2021), allowing the surviving spouse to shelter as much as $23.4 million of net worth from the federal estate tax system in his or her estate.
****IMPORTANT: Proposed legislation could significantly reduce the federal estate tax exemption. Stay tuned for updates.
CONNECTICUT GIFT AND ESTATE TAX:
Unlike the federal estate tax exemption, the state exemption is not portable and therefore may not be carried over from the predeceased spouse’s estate to the surviving spouse’s estate. Prior to 2018, Connecticut’s estate tax exemption had been $2 million for almost 15 years. In 2019 it rose to $3.6 million. and in 2020, $5.1 million. It increased to $7.1 million in 2021 and will rise to $9.1 million in 2022. Starting in 2023 it will equal the federal estate tax exemption (which in 2021 is $11.7 million). In 2026 it will drop back to its 2017 level of $5.49 million.
An executor or administrator must file a federal estate tax return if the gross estate is more than the decedent's available estate tax exemption, taking into account prior gifts. The exemption, which is indexed for inflation and adjusts annually, is $11.7 million in 2021.
The portability of the federal estate tax exemption between spouses enables a surviving spouse to carry over or “port” some or all of his or her predeceased spouse’s unused estate tax exemption amount ($11.7 million in 2021), allowing the surviving spouse to shelter as much as $23.4 million of net worth from the federal estate tax system in his or her estate.
****IMPORTANT: Proposed legislation could significantly reduce the federal estate tax exemption. Stay tuned for updates.
CONNECTICUT GIFT AND ESTATE TAX:
Unlike the federal estate tax exemption, the state exemption is not portable and therefore may not be carried over from the predeceased spouse’s estate to the surviving spouse’s estate. Prior to 2018, Connecticut’s estate tax exemption had been $2 million for almost 15 years. In 2019 it rose to $3.6 million. and in 2020, $5.1 million. It increased to $7.1 million in 2021 and will rise to $9.1 million in 2022. Starting in 2023 it will equal the federal estate tax exemption (which in 2021 is $11.7 million). In 2026 it will drop back to its 2017 level of $5.49 million.
