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    Estate / planning

    State estate tax calculator

    The federal exemption is generous, but a dozen states impose their own estate tax with far lower thresholds — and some use a cliff that taxes the entire estate once you cross it. This calculator stacks federal and state tax, then prices the two planning levers that matter most: valuation discounts and a credit-shelter trust.

    StateThresholdEffective16.6%Trust saving$3,914,138
    Combined estate tax
    $2,484,000
    Federal plus state
    Federal
    $404,000
    40% above $13,990,000
    State
    $2,080,000
    16% above $2,000,000
    Discount planning saves
    $1,056,000
    On a 40% interest with 30/20 discounts
    Estate tax stack
    Federal, state and the planning levers that reduce each.
    $2,484,000
    Estate tax stack
    LayerTaxNotes
    Federal$404,000$1,010,000 taxable
    State$2,080,000$13,000,000 taxable
    Combined$2,484,00016.6% of the estate
    With valuation discounts-$652,000Federal only, illustrative
    With credit-shelter trust$404,000Saves $3,914,138

    State rules differ: some use a cliff, where crossing the threshold taxes the whole estate.

    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    Federal and state tax against estate size
    The state line starts much earlier because the exemption is smaller.
    Federal and state tax against estate size$0$1434.5k$2869.0k$4303.5k$5738.0k$7172.5k0M0M3M3M6M6M9M9M12M12M15M15M18M18M21M21M24M24M27M27M30M30MFederalState
    Planning levers
    What each technique saves against doing nothing.
    Planning levers$0$923.7k$1847.5k$2771.2k$3694.9k$4618.7kDiscountsDiscountsTrustTrustSaved
    Canonical equations
    The exact relationships implemented by this engine.

    40% × max(0, gross − deductions − 13.99M) · Flat rate above the exemption.

    rate × max(0, gross − state exemption) · Or the whole estate where a cliff applies.

    fair × (1 − m)(1 − d) · Stacked marketability and minority discounts.

    finance methodology

    A clear path from inputs to results.

    The federal exemption is generous, but a dozen states impose their own estate tax with far lower thresholds — and some use a cliff that taxes the entire estate once you cross it. This calculator stacks federal and state tax, then prices the two planning levers that matter most: valuation discounts and a credit-shelter trust.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Enter the gross estate and deductions.
    2. Set your state’s exemption and top rate.
    3. Choose whether the state uses a cliff.
    4. Read the combined tax and the planning savings.

    The formula

    T=0.40max⁡(0,E−D−Xf)+rsmax⁡(0,E−D−Xs)T = 0.40\max(0, E - D - X_f) + r_s\max(0, E - D - X_s)

    Reference: IRC §2001 (federal); state estate tax statutes differ and should be checked directly.

    Worked example

    $15M estate, $2M state exemption at 16%

    Inputs
    • Gross estate $15,000,000.
    • No deductions.
    • State exemption $2,000,000 at 16%.
    Calculation path
    1. 1

      Federal: (15M − 13.99M) × 40% = $404,000.

    2. 2

      State: (15M − 2M) × 16% = $2,080,000.

    3. 3

      Combined: $2,484,000.

    4. 4

      A 30/20 valuation discount on a $6M interest saves $1,056,000 of federal tax.

    5. 5

      A credit-shelter trust saves about $3.9M across two deaths.

    Result

    Combined $2.48M · discounts save $1.06M · trust saves $3.9M.

    Interpreting the result

    In a state with a $2M exemption, the state tax can dwarf the federal bill. That inverts the usual planning conversation: the levers that matter are the state threshold, the cliff and the marital deduction, not the federal number everyone quotes.

    Assumptions & limitations

    • Federal 2025 exemption; state parameters entered by the user.
    • No trusts beyond a simple credit-shelter comparison.
    • Valuation discounts are illustrative and require a qualified appraisal.
    • No GST tax or portability election modelling.

    Frequently asked questions

    Why is the state tax so large?

    The state exemption is often a fraction of the federal one, so much more of the estate is taxable.

    Do discounts really work?

    For genuine minority interests in operating businesses, yes — but they need appraisal support and the rules change.

    What is a cliff?

    A threshold where crossing it by one dollar taxes the entire estate, not just the excess.

    Methodology last reviewed 2026-10-21. Results are informational and not financial or engineering advice — see our disclaimer.