2022 Update to Transfer Tax

The IRS has released annual inflation adjustments for 2022 and these include the increase of the estate, gift and generation-skipping transfer tax as follows:

• Increase to $12.06 million federal estate tax exemption from $11.7 million
• The annual gift tax exclusion amount increases to $16,000 for gifts made by an individual ($32,000 if made by a married couple)
• The gift tax annual exclusion amount for gifts to a non-citizen spouse will increase to $164,000

The applicable exclusion amounts currently remain scheduled to expire on December 31, 2025, which would result in a reduction in the exclusion amounts to $5 million (adjusted for inflation). However, new laws could always be passed that could adjust these exclusion amounts sooner.