The IRS recently extended the time period for estates to elect portability of their deceased spouse’s unused estate tax exemption with Revenue Procedure 2022-32. Estates now have five years, instead of two, after the decedent’s date of death to make a portability election.
Portability allows a surviving spouse to claim the unused portion of their deceased spouse’s estate tax exemption, providing additional estate tax exemption for the surviving spouse’s estate. The extension is significant because the United States estate tax exemption is scheduled to reduce by 50% in 2026. The current estate tax exemption is $12.06 million per spouse, or about $24 million combined, but it will reduce to $6.03 million per spouse, or about $12 million combined, in 2026.
The IRS has streamlined portability elections for executors not required to file an estate tax return under § 6018(a), utilizing Form 706 to elect for portability of deceased spousal unused exclusion amount (DSUE). Portability is an effective and simplified estate planning tool, and the recent extension provides surviving spouses additional opportunity to increase their estate tax exemption before the 2026 reduction.