$3.5 Million and $7 Million Exemption Levels PERMANENT for Individuals, Married Couples
At the end of April, the House and Senate each approved a Fiscal 2010 Budget Resolution which calls for extending the federal estate tax into 2010.
[Under Bush-era tax legislation enacted in 2001, the estate tax was due to disappear at the stroke of midnight on January 1, 2010.]
According to a press release issued April 29 by the Senate Budget Committee, the budget resolution “matches the President’s estate tax relief … .” Thus, in 2010 the estate tax exemption amount will be frozen at $3.5 million for single taxpayers and $7 million for married couples – the same rule that applies in 2009. In addition, the Obama Administration has called for indexing the exemption amounts for inflation beginning in 2010.
Thanks to the peculiarities of the Congressional law-making process, yet another piece of legislation – separate and distinct from this budget resolution – is still necessary to make the estate tax permanent. In other words, the budget resolution simply reflects that a majority of lawmakers in each chamber supports the President’s estate tax plan for 2010 and beyond. Just the same, an Act of Congress, spelling out all the details for 2010 and beyond, is still necessary and is expected before the end of 2009. So, stay tuned, dear readers, to this LexisNexis Tax Law Center for continuing coverage of this issue.