When Is a Federal Estate Tax Return Due?

Some people just assume that the federal estate tax applies to every estate. As a result, they wonder when they have to file an estate tax return.

Here’s the good news: For most people, the deadline is the 12^th – of never. Let’s look at the situation from an overview so you understand the facts.

Federal Estate Tax Parameters

The federal estate tax only applies to very large estates. In 2025, the federal exemption amount is $13.99 million per person. That means if the value of your estate is under that figure, no federal estate tax will be due.

If you are married, the exemption is effectively doubled. Each spouse has a separate exemption, and the concept of “portability” allows a surviving spouse to use any unused portion of a deceased spouse’s exemption.

With proper planning, a married couple can shield nearly $28 million from the federal estate tax.

If your estate is larger than the exemption amount, it will be subject to the tax. The top federal estate tax rate is 40 percent. In those cases, filing a federal estate tax return (Form 706) is required.

Federal Gift Tax

Lifetime gift giving would be an obvious response to the tax, but unfortunately, it is not that simple. The gift tax is unified with the estate tax. This means that large lifetime gifts reduce the amount of exemption available to shield your estate from taxation.

Here’s how it works. In 2025, the annual gift tax exclusion is $19,000 per recipient. You can give up to that amount to as many people as you wish each year without reporting the gifts to the IRS.

Larger gifts count against your lifetime exemption, and they require you to file a gift tax return (Form 709).

For example, if you gave $1 million in taxable gifts during your lifetime, it would reduce the exemption available to apply to your estate when you pass away. This system prevents people from avoiding estate taxes by transferring all their assets before death.

How to File a Federal Estate Tax Return

If you are among the few with an estate large enough to trigger the tax, the filing rules are strict. The executor of the estate is responsible for filing Form 706. The deadline is nine months from the date of death, although a six-month extension may be requested.

The return requires a complete accounting of the estate. This includes valuations of all assets, such as real estate, financial accounts, business interests, and personal property of significant value. Appraisals are often necessary, and the IRS expects precision.

Even when no estate tax is due, many executors still file a federal estate tax return to elect portability. By doing so, the surviving spouse locks in the unused exemption from the deceased spouse, which could be critical if the surviving spouse’s estate later grows in value.

This step must be taken within the filing deadline, and missing it can have costly consequences.

California Considerations

California does not impose a state-level estate tax or inheritance tax. That places it in line with most other states, but not all. For instance, neighboring Oregon has a state estate tax with an exemption of only $1 million.

If you own real estate or other property in Oregon, your estate may face state estate tax liability there, even if you live in California.

Planning Is Still Important

You may never come close to the federal estate tax exemption, but that does not mean estate planning should be overlooked. It’s about more than taxes: an intelligent plan provides a roadmap for asset transfers, estate management, and the eventualities of aging.

Trusts can provide efficient administration, protect beneficiaries from creditors, and keep matters private. Powers of attorney and health care directives ensure that your wishes are respected if you cannot make decisions for yourself.

Planning also allows you to reduce the possibility of family disputes by making your intentions clear.

Let’s Get Started!

To schedule a consultation at our Petaluma, CA estate planning office, call us at 707-769-9975 or send us a message through our contact page.

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Bridget Mackay

Bridget has been practicing law for over 25 years. After graduating from Santa Clara Law, she spent 10 years as a Deputy District attorney in both Solano and Sonoma Counties. After the birth of her daughter, her priorities changed, and she began a practice in estate planning and Medi-Cal benefits planning. This transition was a natural fit and all her skills of listening, compassion and fearless pursuit on behalf of her clients translated well to this area of law. She lives in Petaluma with her daughter and Australian Shepherd, Joey. Read More!

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