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Starting January 1, 2026, many provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”) are set to expire. Among the most significant provisions set to sunset is the increased estate and gift tax exemption, which currently stands at an all-time high of $13.99 million per individual. If Congress does not act, this exemption will be significantly reduced.
On Tuesday, February 25, 2025, the House narrowly approved President Trump's budget resolution, seeking $4.5 trillion in tax cuts, with a slim majority (217-215) vote. The passage of this resolution now allows the House and the Senate to negotiate how to implement President Trump's promised legislation. While the House has not yet unveiled a detailed tax plan, the Trump administration has outlined several key provisions it expects to feature in future legislation, including the extension of the TCJA's estate and gift tax exemptions. This budget resolution vote marks an important first step in efforts to extend provisions of the TCJA beyond their 2025 expiration.
As discussions around the extension of TCJA continue, it's essential for individuals, especially those with estates approaching the current exemption limits, to stay informed. A reduction in the exemption could affect thousands of households who currently don't face estate tax obligations, potentially requiring new estate tax planning strategies.
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