Bill To Repeal Federal Estate Tax Introduced, But Still Faces Hurdles
According to a report from Financial Regulation News, a bill has been introduced in the United States Senate to repeal the federal estate tax. The legislation was introduced by South Dakota Senator John Thune and it has 45 co-sponsors. Here, our Norwood estate planning attorney provides an overview of the existing federal estate tax, the proposed reform, and Massachusetts Commonwealth tax law.
An Overview of Federal Estate Tax Laws (2025)
The federal government imposes an estate tax on high-value estates. When a person passes away, their remaining estate is subject to taxation if it is above a certain level. For the year 2025, the estate tax exemption is set at $13.99 million per individual—meaning estates valued below this threshold are not subject to federal estate tax. It is twice as much for a married couple.
Note: The federal exemption is scheduled to revert to approximately $7 million (subject to a specific adjustment for inflation) on January 1, 2026, unless Congress enacts changes before that time.
Proposal: Eliminate Federal Estate Tax
Lawmakers are currently determining how to handle the federal estate tax exemption. As noted, if nothing is done, the estate tax exemption will revert to its previous level—dropping by 50 percent—starting in 2026. Congress could allow that to happen. It could also estate the increase in the estate tax exemption for additional years or even make it permanent.
Alternatively, there is a push to get rid of the federal estate tax. In February 2025, U.S. Senate Majority Leader John Thune introduced the Death Tax Repeal Act. It would permanently repeal the federal estate tax—or as it is sometimes pejoratively referred to as “the death tax.” Senator Thune argues that the tax imposes financial burdens on family-owned farms, ranches, and small businesses upon the owner’s death. Opponents of the proposed repeal counter that the estate tax exemption already makes considerations for these people and that only the very wealthy have liability.
What to Know About the Massachusetts Estate Tax
Massachusetts has its own estate tax. As of 2025, 12 U.S. states and the District of Columbia (DC) impose their own estate tax beyond the federal estate tax. For estates after January 1st of 2023, Massachusetts provides a $2 million exemption. Estates valued at or below this threshold are not subject to the tax. For estates exceeding $2 million, only the amount above this threshold is taxed—the rate is between eight percent and sixteen percent. Prior to the reform, Massachusetts had a “cliff” system where the full estate could be taxed even if the threshold was only exceeded by one dollar. That is no longer the case in the Commonwealth.
Consult With Our Norwood Estate Planning Attorney Today
At Fisher Law LLC, our Norwood estate planning lawyer invests the time, resources, and attention to detail to help clients protect their interests and solve problems. If you have any questions or concerns about federal estate taxes and estate planning, please do not hesitate to contact us today. With an office in Norwood, we provide estate planning services throughout the wider region.
Source:
financialregnews.com/sen-thune-introduces-bill-to-repeal-the-federal-estate-tax/
