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The Internal Revenue Service recently published its annual inflation-adjusted figures for 2020 for estate and trust income tax brackets, as well as the exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. These figures are adjusted annually for cost-of-living increases.
Below is a summary of the 2020 figures. The original news release from the IRS may be found here.
2020 Estate, Gift, GST and Trusts & Estates Income Tax Rates
Estate tax: Generally, a person dying between Jan. 1 and Dec. 31, 2020, may be subject to an estate tax, with an applicable exclusion amount of $11,580,000 (increased from $11.4 million in 2019). The top marginal rate remains 40 percent.
Gift tax: The lifetime gift tax exemption for gifts made during 2020 is $11,580,000 (increased from $11.4 million in 2019). The top marginal rate remains 40 percent. The gift tax annual exclusion amount remains $15,000. The annual exclusion for gifts made to noncitizen spouses in 2020 is $157,000 (increased from $155,000 in 2019).
GST tax: The GST tax exemption amount, which can be applied to generation-skipping transfers (including those in trust) during 2020, is $11,580,000 (increased from $11.4 million in 2019). The rate remains 40 percent.
Income tax: The tax rate schedule for estates and trusts in 2020 is as follows:
| If taxable income is: | The tax is: |
| Not over $2,600 | 10 percent of taxable income |
| Over $2,600 but not over $9,450 | $260 plus 24 percent of the excess over $2,600 |
| Over $9,450 but not over $12,950 | $1,904 plus 35 percent of the excess over $9,450 |
| Over $12,950 | $3,129 plus 37 percent of the excess over $12,950 |