2026 key numbers at a glance
- Annual gift exclusion: $19,000 per recipient
- Estate and gift tax exclusion: $15 million per person
- Generation-skipping transfer exemption (GST): Up to $15 million per individual or up to $30 million per couple if each spouse’s separate exemption is properly allocated.
- 401(k) contribution limit: $24,500
- IRA contribution limit: $7,500
- Medicare Part B premium: $202.90 per month
- Maximum Social Security benefit at full retirement amount: $4,152 per month
For families with significant wealth and complex financial lives, the value of year-end planning often lies not in the limits themselves, but in how they work together across a broader wealth strategy. With that in mind, here are some of the key 2026 figures to use as a useful framework for discussions with your wealth, tax and legal advisors before year-end.
1. What is the estate tax exemption for 2026?
Sophisticated estate planning begins with purpose: how do you want capital to support family members, future generations, philanthropic priorities and the enterprises or properties you intend to retain? For this reason, you may want to consider how you use these tax thresholds within your broader plan for control, governance, liquidity and succession.
Good news for families contemplating significant lifetime gifts or multigenerational transfers. The 2026 federal generation-skipping transfer (GST) exemption has increased to $15 million per individual, while married couples can take advantage of a separate $15 million basic exclusion amount for each spouse. Depending on prior taxable gifts and the couple’s circumstances, up to $30 million may potentially be sheltered from federal estate and gift tax. Preservation of a deceased spouse’s unused exclusion generally requires a portability election on a timely filed Form 706.1,2
If your spouse is not a U.S. citizen, the unlimited marital deduction generally does not apply. However, in 2026, up to $194,000 in qualifying gifts may be transferred to your non-citizen spouse under the special annual exclusion.3
2026 key numbers: Estate and gift tax
| Threshold | 2026 amount |
|---|---|
| Annual gift exclusion | $19,000 per donor, per recipient; $38,000 if each spouse makes a $19,000 gift |
| Estate and gift tax basic exclusion amount | $15 million per individual |
| Generation-skipping transfer exemption | Up to $15M each, or $30M for married couples, when exemptions are properly allocated1,2 |
| Noncitizen spouse annual gift exclusion | $194,000 |
| Federal estate and gift tax rate | Up to 40% for taxable gifts and estates above the exemption4 |
Wealth perspective: If you’re considering large transfers, your relationship manager at The Private Bank can serve as your holistic guide, helping to coordinate discussions with your estate-planning attorney and tax advisor.
2. What are the capital gains tax rates for 2026?
Long-term capital gains and qualified dividends are generally taxed at 0%, 15% or 20%, depending on taxable income.5 However, return is only one measure of success. The timing, character and location of investment income can materially affect your after-tax results, particularly when a portfolio includes concentrated equity, privately held businesses, real estate or multiple taxable and tax-advantaged accounts.
Here’s a special consideration if you have a trust. Trusts can reach the highest long-term capital gains rate at substantially lower taxable-income levels than individuals. For 2026, the 0% capital gains bracket for estates and trusts extends through $3,300 of taxable income, the 15% bracket applies above $3,300 through $16,250, and the 20% rate applies above $16,250.5
2026 key numbers: Long-term capital gains
| Filing status | 0% rate | 15% rate | 20% rate |
|---|---|---|---|
| Single | Up to $49,450 | $49,451 to $545,500 | Over $545,500 |
| Married filing separately | Up to $49,450 | $49,451 to $306,850 | Over $306,850 |
| Married filing jointly | Up to $98,900 | $98,901 to $613,700 | Over $613,700 |
| Head of household | Up to $66,200 | $66,201 to $579,600 | Over $579,600 |
A 3.8% Net Investment Income Tax may also apply when modified adjusted gross income exceeds $250,000 for married couples filing jointly or qualifying widow(er)s with a child, $125,000 for married individuals filing separately, and $200,000 for single filers or heads of household.6
Wealth perspective: Evaluate the potential tax consequences and explore strategies with your relationship manager before you make a move to realize a substantial gain or reduce a concentrated position.
Read more: One Simple Way to Prevent High Estate Taxes
3. How can education funding be included in a family wealth strategy?
Education funding may serve several objectives at once: supporting younger generations, moving assets outside an estate, and creating a disciplined pool of capital for future expenses. In addition to how much to save, you might also include which family members should fund the account, when to make the transfer, and how the strategy fits with other gifts and trusts.
In 2026, an individual may contribute up to $19,000 to a 529 plan for a beneficiary without using any lifetime gift and estate tax exemption. A married couple may contribute up to $38,000 per beneficiary if each spouse contributes $19,000. Five-year election rules may permit a contribution of up to $95,000 per donor, per beneficiary, or $190,000 for a married couple, treated as gifts made ratably over five years for federal gift tax purposes.7
2026 key numbers: Education planning
| Provision | 2026 amount |
|---|---|
| 529 plan annual gifting | $19,000 per donor, per beneficiary; $38,000 for a married couple |
| 529 plan five-year “superfunding” | Up to $95,000 per donor, per beneficiary; $190,000 for a married couple |
| Coverdell Education Savings Account contribution limit | Up to $2,000 per beneficiary8 |
| American Opportunity Tax Credit | Up to $2,500 per eligible student9 |
| Lifetime Learning Credit | Up to $2,000 per return9 |
| Student Loan Interest Deduction | Deduct up to $2,500 in interest paid on qualified student loans; income limits apply10 |
Wealth perspective: Coordinate educational funding with annual gifting, trust distributions and your broader transfer strategy.
Read more: The Best Ways to Save for Your Child's College Education
4. How does Social Security and Medicare work within a retirement plan?
Social Security and Medicare may represent a smaller share of retirement resources for affluent households, but claiming decisions and income-related Medicare premiums remain relevant to tax and cash-flow planning.
Social Security benefits depend on earnings history, claiming age and retirement year. Claiming before full retirement age generally reduces your monthly benefit while delaying beyond full retirement age, up to age 70, may increase it. Earnings before full retirement age can also temporarily reduce benefits.
The maximum retirement benefits shown below are Social Security Administration examples for workers who earned the taxable maximum each year beginning at age 22 and first claim benefits in 2026. Actual benefits vary based on earnings history and claiming age.1
Medicare Part B premiums increase as income rises. Before making moves such as Roth conversions or realizing significant investment gains, it may be helpful to consider how those decisions could affect your future Medicare costs.
2026 key numbers: Social Security and Medicare
| Provision | 2026 amount |
|---|---|
| Social Security taxable wage base | $184,50011 |
| Maximum monthly Social Security retirement benefit* | $2,969 at age 62; $4,152 at full retirement age; $5,181 at age 7012 |
| Cost-of-living adjustment | 2.8%13 |
| Medicare Part B premium | Standard premium: $202.90 per month; higher-income beneficiaries may pay more14 |
| Earnings test, under full retirement age for all of 2026 | $24,480 per year; benefits generally reduced by $1 for every $2 earned above the limit15 |
*For someone who earned the taxable maximum each year beginning at age 22 and claims at full retirement age in 2026.
Wealth perspective: Evaluate Social Security and Medicare in the context of the household’s full income map, including portfolio withdrawals, pensions, deferred compensation, required distributions and potential Roth conversions.
Read more: Aging Well: The Best Ways for Seniors to Manage the Expense of Assisted Living
5. How to use retirement accounts to improve tax diversification in 2026?
A well-designed retirement strategy considers how different sources of retirement capital work together. That may include coordinating employer plans, individual retirement accounts, deferred compensation and other assets across taxable, tax-deferred and tax-free accounts to create greater flexibility over time.
In 2026, the employee contribution limit is $24,500 for most 401(k), 403(b) and governmental 457 plans. The IRA contribution limit is $7,500.16 Year-end may also be an appropriate time to evaluate Roth conversions, contribution capacity and the tax character of future withdrawals.
Wealth perspective: At The Private Bank, your relationship manager can work with your CPA and legal advisors to review contribution limits alongside cash-balance or pension benefits, executive compensation, charitable plans, future required distributions and estate objectives.
Make the most of your year-end planning window
Every family's circumstances and aspirations are unique. At The Private Bank, we can help identify planning opportunities and coordinate discussions across your advisory team.
A year-end review with The Private Bank is an opportunity to discuss what's most important to you, whether that's preserving wealth, supporting future generations, advancing charitable goals or preparing for a significant transition. Contact your relationship manager to see how we can help support the future you envision for your family.
The content in this article is for informational purposes only and should not be construed as tax, legal, accounting, or investment advice or as a recommendation of any investment strategy or product by Bank of Hawaii or its affiliates. The information is general in nature, may not apply to your individual circumstances, and is subject to change. You should consult your own tax, legal, accounting, and investment advisors before making financial or investment decisions.
References
- Internal Revenue Service, “IRS releases tax inflation adjustments for tax year 2026.” View source
- Internal Revenue Service, “Generation-skipping transfer tax.” View source
- Internal Revenue Service, “Frequently asked questions on gift taxes for nonresidents not citizens of the United States." View source
- Internal Revenue Service, “Federal estate and gift tax rate” View source
- Internal Revenue Service, “Capital gains tax rates.” View source
- Internal Revenue Service, “Net Investment Income Tax." View source
- Internal Revenue Service, “529 contribution limits.” View source
- Internal Revenue Service, “Topic no. 310, Coverdell Education Savings Accounts.” View source
- Internal Revenue Service, “Education credits: AOTC and LLC.” View source
- Internal Revenue Service, “Topic no. 456, Student loan interest deduction.” View source
- Social Security Administration, “Contribution and benefit base.” View source
- Social Security Administration, “Maximum Social Security retirement benefit.” View source
- Social Security Administration, “2026 COLA fact sheet.” View source
- Centers for Medicare & Medicaid Services, “2026 Medicare Parts B premiums and deductibles.” View source
- Social Security Administration, “2026 Social Security changes.” View source
- Internal Revenue Service, “401(k) limit increases to $24,500 for 2026; IRA limit increases to $7,500.” View source
