A federal estate tax return is due nine months after the date of death, and it must be filed whenever the deceased person’s gross estate plus their lifetime taxable gifts exceeds the exclusion amount for the year of death. For a person dying in 2026, that combined figure is $15 million.1Internal Revenue Service. Frequently Asked Questions on Estate Taxes The estate tax return filing deadline runs from the date of death, not the date of appointment as executor, and the tax payment is due on the same day the return is due. Miss either one and penalties start running immediately.
When a Return Is Required
Form 706 is required for a U.S. citizen or resident when the gross estate exceeds the basic exclusion amount in effect for the year of death.2Office of the Law Revision Counsel. 26 USC 6018 – Estate Tax Returns The threshold is $15 million for 2026, set by the One, Big, Beautiful Bill Act signed on July 4, 2025, which made the higher exemption permanent and eliminated the scheduled sunset.3Internal Revenue Service. What’s New – Estate and Gift Tax Beginning in 2027, the $15 million base adjusts annually for inflation.4Office of the Law Revision Counsel. 26 US Code 2010 – Unified Credit Against Estate Tax
The gross estate is not just what passes through probate. It includes the fair market value of everything the deceased owned or had an interest in at death: bank accounts, real estate, investments, retirement accounts, life insurance proceeds, and business interests.
Lifetime Gifts Reduce the Threshold
The $15 million is not measured against date-of-death assets alone. The IRS reduces the filing threshold by any adjusted taxable gifts the person made after 1976 — the lifetime gifts that exceeded the annual gift tax exclusion and consumed part of their lifetime exemption.2Office of the Law Revision Counsel. 26 USC 6018 – Estate Tax Returns
This is where executors get caught. Someone who dies with a $12 million estate might look safely below the threshold, but if they made $4 million in taxable gifts during life, the combined figure is $16 million and a return is required. Before deciding no filing is needed, the executor should track down every prior gift tax return (Form 709) the deceased filed.
Filing Anyway to Preserve Portability
An executor of a married person’s estate often should file Form 706 even when the estate is well under $15 million. Filing is the only way to transfer the deceased spouse’s unused exclusion to the survivor, an election called portability.4Office of the Law Revision Counsel. 26 US Code 2010 – Unified Credit Against Estate Tax If the first spouse used only $3 million of their exemption, the surviving spouse can add the remaining $12 million to their own, potentially sheltering $27 million at the second death.
The election must be made on a complete and properly prepared Form 706, and once made it cannot be reversed.5Internal Revenue Service. Instructions for Form 706
The Nine-Month Deadline and How to Count It
The return is due nine months after the date of death.6Office of the Law Revision Counsel. 26 USC 6075 – Time for Filing Estate and Gift Tax Returns The IRS finds the same calendar day in the ninth month. A death on March 15 produces a December 15 deadline. If the ninth month has no corresponding day, the return is due on the last day of that month, so a death on May 31 falls due on February 28 or 29.
Payment of any estate tax owed is due at the same nine-month mark.7Internal Revenue Service. Filing Estate and Gift Tax Returns Nine months sounds generous, but the executor has to identify every asset, obtain appraisals for real estate and business interests, gather years of gift tax returns, and calculate the tax. Complicated estates run out of time quickly.
Extensions of Time to File
An executor who needs more time can request an automatic six-month extension by filing Form 4768 before the original nine-month deadline.8eCFR. 26 CFR 20.6081-1 – Extension of Time for Filing the Return The extension is granted automatically as long as the form is submitted on time, and it pushes the filing deadline to 15 months after the date of death.
The extension gives more time to file, not more time to pay. Any estimated tax must still be paid by the original nine-month deadline.7Internal Revenue Service. Filing Estate and Gift Tax Returns The executor is expected to make a good-faith estimate of the liability and submit payment with the extension request. Interest begins accruing on any shortfall from the original due date, whether or not a filing extension is in place.
Installment Payments for Closely Held Business Interests
Estates where a closely held business makes up more than 35% of the adjusted gross estate can elect under Section 6166 to pay the estate tax attributable to that business in installments.9Office of the Law Revision Counsel. 26 USC 6166 – Extension of Time for Payment of Estate Tax Where Estate Consists Largely of Interest in Closely Held Business The executor can defer the first installment for up to five years after the normal payment due date, then spread the remaining balance over up to ten annual payments. The business must be a trade or business (not a passive investment) with 45 or fewer owners, or the deceased must have owned at least 20% of the entity. The election must be made on a timely filed return.
Penalties for a Late Return or Late Payment
Late filing and late payment carry separate penalties that stack. The failure-to-file penalty is 5% of the unpaid tax for each month or partial month the return is overdue, capped at 25%.10Internal Revenue Service. Failure to File Penalty The failure-to-pay penalty adds 0.5% per month on any unpaid balance, also capped at 25%.11Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges
Interest accrues separately from both penalties, running from the original due date until the tax is paid in full.11Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges On a $2 million tax bill, five months of combined penalties alone could exceed $275,000 before interest is calculated. The IRS can waive penalties if the executor shows reasonable cause for the delay. Interest is never waived.
Late Portability-Only Filings
For estates that were not otherwise required to file, the IRS offers a simplified late portability election through Revenue Procedure 2022-32. The executor can file a late portability return up to five years after the date of death, as long as the estate fell below the normal filing threshold.12Internal Revenue Service. Revenue Procedure 2022-32 The return must state at the top that it is filed pursuant to that revenue procedure. Miss the five-year window and the unused exclusion is gone permanently.
This relief is not available to estates that were required to file under the regular rules. For those estates, the nine-month deadline (or 15 months with an extension) is the only window.
Non-Resident Non-Citizen Estates
The $15 million threshold applies only to U.S. citizens and residents. A non-resident non-citizen’s estate must file when U.S.-situated property exceeds $60,000.2Office of the Law Revision Counsel. 26 USC 6018 – Estate Tax Returns These estates file Form 706-NA. The same nine-month deadline applies, and the same extension procedures are available.
State Filings Run on Their Own Clocks
About a dozen states and the District of Columbia impose their own estate taxes, and their exemptions can be far lower than the federal amount — some as low as $1 million. An estate that owes nothing to the IRS can still owe six figures to a state. A federal extension does not automatically extend a state deadline; most states require their own extension form. Real estate creates a filing obligation in the state where the property sits, even if the deceased lived somewhere else. A handful of states impose an inheritance tax instead of or in addition to an estate tax, and that tax is paid by the beneficiary rather than the estate.
Form 706 Is Not the Estate Income Tax Return
Form 706 (the estate tax return) and Form 1041 (the estate income tax return) are separate obligations, and executors confuse them regularly. Form 1041 is required when the estate earns $600 or more in gross income after the date of death, covering interest, dividends, rental income, and gains from selling estate assets during administration.13Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 Its deadline is the 15th day of the fourth month after the estate’s tax year closes, with a six-month extension available on Form 7004. Many estates below the $15 million threshold still owe income tax on post-death earnings, and missing that return is a separate violation with its own penalties.