The Federal Tax Cuts and Jobs Act of 2017 (TCJA) was a sweeping tax reform package. A key feature of that legislation was that many of its provisions, especially those affecting individual taxpayers, were temporary. These tax provisions are currently scheduled to “sunset,” meaning that they will expire, effective January 1, 2026, and the tax laws will revert to their pre-TCJA state unless Congress steps in with new legislation. For example, the federal estate tax exemption under TCJA which is currently $13.99 million per person (indexed for inflation), would revert to approximately $6.8 million per person, and continue to be indexed for inflation.
However, the Trump Administration and the Republican Congress generally favor extending most of the current TCJA provisions and are considering making them permanent. There have also been bills in both the House and the Senate to repeal certain parts of the TCJA, including a repeal of the estate tax entirely. But these are merely preliminary discussions at this point. In summary, although the current federal estate tax exemption of $13.99 million is slated to sunset to approximately $6.8 million starting January 1, 2026, it is anticipated that the current exemption will at least be extended, with the possibility of permanency.
On May 20, 2025, Washington State enacted Bill ESSB 5813, which takes effect immediately. This means that for individuals dying on or after July 1, 2025, the applicable Washington estate tax exemption has increased from $2.193 million to $3 million, with annual adjustments based on the Consumer Price Index for the Seattle metropolitan area. ESSB 5813 also increased the current 10-20% tax brackets to a 10-35% tax bracket. Individuals who die owning more than $9 million can expect to hit the highest tax backet of 35%. However, Washington maintains the qualifying family-owned business interests (QFOBI) deduction enacted on January 1, 2014.
Several bills have also been introduced in the Oregon legislature that aim to modify the state estate tax. Among the proposed bills: HB 2058 proposes that for individuals who pass away on or after January 1, 2026, the current Oregon estate tax exemption of $1 million would be increased to $13.99 million; HB 2301 proposes raising the Oregon estate tax exemption to $7 million and replacing the current 10-16% tax brackets with a flat 7% tax; HB 3844 proposes that the Oregon estate tax exemption merely be adjusted and indexed for inflation; and HB 3934 proposes “portability” for the Oregon estate tax, more easily allowing a surviving spouse to use the exemption of a deceased spouse. It’s important to note, however, that the legislative process is ongoing, and the outcome of these bills is still uncertain. The legislature seems to be paying attention to a recent study showing that Oregon’s high estate tax is influencing migration to and from the state; enough so that the state may be losing more money in income, property, and other taxes than it is gaining from the estate tax.
Our office will continue to monitor these legal developments and provide additional details as they unfold. Thank you.
The information in this letter is not intended to provide legal advice. For professional consultation, please contact the Saalfeld Griggs Estate Planning team.
Salem Office: 503.399.1070. Bend Office: 541.693.1070.
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