26 U.S.C. § 2010 — Unified credit against estate tax

(a) General rule. Every estate gets a tax credit called the "applicable credit amount." This credit is subtracted from the estate tax that section 2001 would otherwise impose. (b) Adjustment for certain gifts made before 1977. If the decedent made gifts after September 8, 1976, and claimed a specific gift-tax exemption for them under old section 2521, the credit is reduced. The reduction equals 20 percent of that earlier exemption amount. (c) Applicable credit amount. The credit equals the tentative estate tax that would apply to an estate worth exactly the "applicable exclusion amount." That exclusion amount is the "basic exclusion amount," plus, for a surviving spouse, any unused exclusion inherited from a deceased spouse. The basic exclusion amount is $15,000,000. For deaths after 2026, this figure rises each year with inflation, based on a cost-of-living formula, and rounds to the nearest $10,000. A surviving spouse can add a deceased spouse's leftover exclusion. That leftover amount is the smaller of the basic exclusion amount or the unused portion of the deceased spouse's own exclusion. To use a deceased spouse's leftover exclusion, the deceased spouse's executor must file an estate tax return, calculate the amount, and elect to allow it. This election is irrevocable and only available if that return was filed on time. Even after normal deadlines for auditing that return have passed, the Secretary may still examine it to verify this leftover amount. The Secretary may issue regulations to carry out these rules. (d) Limitation based on amount of tax. The credit can never exceed the estate tax actually owed under section 2001.

The record indicates that this section was added by Public Law 94–455, title XX, § 2001(a)(2), enacted October 4, 1976, and reported at 90 Stat. 1848. The source credit shows that the section has since been amended nine times, by Public Law 97–34 (1981), Public Law 101–508 (1990), Public Law 105–34 (1997), Public Law 107–16 (2001), Public Law 111–312 (2010), Public Law 112–240 (2013), Public Law 115–97 (2017), and Public Law 119–21 (2025). This pattern of repeated revision over nearly five decades reflects sustained congressional attention to the credit amount and its mechanics. Public Law 94–455 is the Tax Reform Act of 1976, which is generally understood to have substantially restructured federal estate and gift taxation, including the unification of the estate and gift tax systems into a single rate schedule and a single credit. The creation of a unified credit in place of separate exemptions is commonly described as part of that unification effort, intended to simplify the interaction of lifetime gifts and testamentary transfers under one integrated regime. Beyond this general purpose of the 1976 Act, the record does not establish the specific legislative reasoning behind each subsequent amendment, including the various increases to the exclusion amount, the portability provisions for surviving spouses, or the sunset and inflation-adjustment mechanisms reflected in the current text. Those later changes are generally associated with broader debates over estate tax relief and revenue policy in their respective eras, but this note does not speculate further where the source materials do not specify legislative intent.