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.
| Layer | Tax | Notes |
|---|---|---|
| Federal | $404,000 | $1,010,000 taxable |
| State | $2,080,000 | $13,000,000 taxable |
| Combined | $2,484,000 | 16.6% of the estate |
| With valuation discounts | -$652,000 | Federal only, illustrative |
| With credit-shelter trust | $404,000 | Saves $3,914,138 |
State rules differ: some use a cliff, where crossing the threshold taxes the whole estate.
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.
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.
How to use
- Enter the gross estate and deductions.
- Set your state’s exemption and top rate.
- Choose whether the state uses a cliff.
- Read the combined tax and the planning savings.
The formula
Reference: IRC §2001 (federal); state estate tax statutes differ and should be checked directly.
Worked example
$15M estate, $2M state exemption at 16%
- Gross estate $15,000,000.
- No deductions.
- State exemption $2,000,000 at 16%.
- 1
Federal: (15M − 13.99M) × 40% = $404,000.
- 2
State: (15M − 2M) × 16% = $2,080,000.
- 3
Combined: $2,484,000.
- 4
A 30/20 valuation discount on a $6M interest saves $1,056,000 of federal tax.
- 5
A credit-shelter trust saves about $3.9M across two deaths.
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.