For 2026, the federal basic estate and gift tax exclusion is $15 million per individual. The annual gift-tax exclusion is $19,000 per recipient for qualifying gifts. These amounts serve different purposes, and neither replaces an Illinois estate-tax analysis.
The lifetime exclusion is shared
Federal estate and gift taxes use a coordinated system. Taxable lifetime gifts can use exclusion that would otherwise be available at death. The $15 million amount is therefore not a fresh allowance for gifts plus another unrelated $15 million allowance for the estate. The IRS gift-tax guidance addresses the 2026 amount and earlier large gifts.
Someone who previously used part of the exclusion should review the actual gift history before making another transfer. The amount available depends on the person’s records and applicable rules, not simply a subtraction from last year’s published limit.
Annual gifts have their own qualifications
The $19,000 annual exclusion applies per donor, per recipient in 2026, generally for present-interest gifts. Two spouses can potentially use their respective exclusions, but ownership, gift splitting, and return requirements must be addressed. A gift to a trust needs particular attention to the beneficiary’s rights.
A gift over the annual exclusion does not automatically produce a tax bill. It may require reporting and use of lifetime exclusion. Conversely, the absence of a tax payment does not establish that no return was required. See the Form 709 instructions and our guide to prior gifts and Illinois estate tax.
Portability requires action
A surviving spouse may be able to use a deceased spouse’s unused federal exclusion when a valid portability election is made. This generally requires filing the appropriate estate-tax return. It is not an automatic $30 million household allowance. Section 2010 sets out the federal portability framework.
The generation-skipping transfer tax has separate exemption and allocation rules. Federal portability should not be assumed to carry over unused GST exemption.
Illinois needs a separate calculation
Illinois’s lower exclusion makes federal-versus-Illinois planning relevant even when no federal tax is expected. Ownership and the plan for each spouse’s death remain important.
Use the Illinois estate tax calculator with a properly determined estate figure and adjusted taxable gifts. It estimates Illinois estate tax only; it does not calculate federal gift tax or determine how much exclusion remains.
The Lifetime Gifting Explorer can illustrate the Illinois estate-tax effect of a proposed gift and the possible basis tradeoff. Its assumption of no federal gift or estate tax must be checked separately; the tool does not determine available federal exclusion.
Before making a large gift, gather earlier gift-tax returns, valuations, and the proposed transfer terms. A planning consultation can help compare the transfer with your future needs and the rest of your estate plan.