2022 Estate and Gift Tax Exclusion Amount

The Internal Revenue Service (the “IRS”) has announced the 2022 estate and gift tax exclusion amount. These amounts are adjusted for inflation on an annual basis. The exclusion amounts have increased from $11.7 million in 2021 to $12.06 million per person in 2022. With proper planning or use of portability, this means that a married couple has a combined exclusion amount of $24.12 million.

The estate and gift tax rate remains the same in 2022 at a rate of 40%, and the gift tax annual exclusion has increased from $15,000 per person to $16,000 per person. Gifts of a present interest up to $16,000 can be made to as many people as the donor chooses without reducing the donor’s $12.06 million lifetime exclusion amount.

While the exclusion amount is slated to be drastically reduced on January 1, 2026, and may be reduced before then through proposed tax reform, individuals should consider taking advantage of lifetime gifting strategies now to lessen, or even eliminate, their federal estate and gift tax liability.

If you have any questions regarding estate and gift tax matters, or lifetime gifting strategies, please contact Leech Tishman’s Estates & Trusts Practice Group.

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