The estate tax threshold is the same amount as the applicable exclusion amount which is the monetary limit on estates and gifts an individual can give in their lifetime without incurring estate and gift taxes. This threshold varies highly by year but is set at $11,700,000 until 2026. This threshold means a person can leave an estate of $11,700,000 without paying estate taxes if they gave no gifts within their lifetime. When a person makes gifts to others before the estate, it reduces the amount which a person can use towards estates to avoid estate taxes. For more information, see the applicable exclusion amount.
[Last updated in June of 2021 by the Wex Definitions Team]