The One Deduction With No Dollar Limit
Most tax deductions come with a cap, but the federal marital deduction doesn't. Under U.S. law, you can leave an unlimited amount of assets to a surviving spouse who is a U.S. citizen and it passes completely free of federal estate tax — whether that's $500,000 or $50 million. This is fundamentally different from deduction structures based on legal shares of an estate; here, the dollar amount simply doesn't matter as long as the recipient is a qualifying spouse. Only the portion of your estate that goes to someone other than your spouse — children, other relatives, or anyone else — gets measured against the standard federal estate tax exemption (about $13.99 million per person in 2025) before the roughly 40% top rate applies to what's left. One catch: this only fully applies to U.S. citizen spouses. Non-citizen spouses generally need assets to pass through a Qualified Domestic Trust (QDOT) instead to get similar deferral treatment. And remember, deferring tax isn't eliminating it — assets that pass to your spouse become part of their own taxable estate down the road.
How It's Calculated
| Step | Item | Formula |
|---|---|---|
| 1 | Marital Deduction | 100% of amount left to U.S. citizen spouse (no limit) |
| 2 | Amount to Other Heirs | Total Estate − Amount to Spouse |
| 3 | Taxable After Exemption | Other Heirs Amount − $13.99M Federal Exemption |
| 4 | Estimated Tax | Taxable Amount × ~40% (top federal rate) |
Frequently Asked Questions
Correct — any amount left to a U.S. citizen spouse passes completely free of federal estate tax, with no dollar cap.
No, non-citizen spouses generally need assets to pass through a Qualified Domestic Trust (QDOT) instead.
It defers tax at the first death, but assets become part of your spouse's own taxable estate later.
※ Uses the approximate 2025 federal exemption and a simplified flat 40% top rate. Actual estate tax uses a graduated schedule and may involve portability elections and state-level taxes.