When is the Final Estate Tax Return Due? (w/Examples) + FAQs

The final federal estate tax return, IRS Form 706, is due nine months after the date of the person’s death. This deadline is not flexible and serves as the starting point for one of the most complex tax filings an individual may ever face.

The central conflict of this process is the rigid nature of the law versus the messy reality of life and death. The Internal Revenue Code § 6075(a) sets a strict nine-month deadline, but gathering the necessary documents, getting assets professionally appraised, and even getting formally appointed as the estate’s executor can take much longer. This clash creates a high-stakes environment where a procedural delay can trigger immense financial penalties, even for estates that ultimately owe no tax. In 2021, only about 2,584 estates in the entire country actually paid federal estate tax, yet the rules for filing can impact many more families.

Here is what you will learn by reading this guide:

🗓️ How to pinpoint the exact, unchangeable due date for your specific situation, down to the calendar day.
💰 Whether you are legally required to file based on the estate’s value and the crucial 2024 and 2025 exemption limits.
⏳ The step-by-step process for getting an automatic six-month filing extension and why it does not give you more time to pay.
💍 How to use a special five-year deadline to save a surviving spouse’s tax exemption, a multi-million dollar benefit many people miss.
❌ The most common and costly mistakes executors make and the clear, actionable steps to avoid them.

The Core Players: Form 706, the Executor, and the IRS

The main document in this process is IRS Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. Its purpose is to calculate the tax on the decedent’s entire taxable estate before any assets are given to heirs. The tax is paid by the estate, not by the people who inherit the money.

It is critical to understand that Form 706 is a one-time return filed after death. It is completely different from other tax forms you might encounter during this process.

The key people involved are the decedent, the executor, and the IRS. A “deceased” person is anyone who has died . The term “decedent” is a specific legal term for a deceased person whose estate is being legally administered, meaning they have financial matters to settle. The executor is the person named in the will (or appointed by a court) who is legally responsible for this entire process.

The Ticking Clock: How to Pinpoint Your Exact Deadline

The law is extremely precise about how to calculate your due date. The countdown starts on the official date of death, which is the date printed on the certified death certificate. You cannot file Form 706 without this document.

The rule, found in the Code of Federal Regulations, is not simply “nine months.” It is the day in the ninth calendar month after death that numerically matches the day of death . For example, if the date of death is March 15, the due date is December 15.

A special rule applies if the ninth month is shorter and doesn’t have a matching day. If a person dies on July 31, the ninth month is April. Since April has no 31st day, the deadline becomes the last day of that month: April 30 .

Finally, if your calculated due date falls on a Saturday, Sunday, or a legal holiday, the deadline automatically moves to the next business day. You must check a calendar to be sure.

The Filing Threshold: Does This Rule Even Apply to You?

A federal estate tax return is only required if the decedent’s assets are worth more than a certain amount. This is determined by calculating the gross estate. The gross estate is the total fair market value of everything the person owned at death, before subtracting any debts.

The net estate is the value left over after you subtract allowable deductions like mortgages, funeral expenses, and legal fees . The tax is calculated on the net estate, but the requirement to file is based on the gross estate.

The federal government allows a large amount of assets, called the exemption, to pass to heirs tax-free. This amount changes with inflation each year.

For people who die in 2024, the exemption is $13,610,000.
For people who die in 2025, the exemption is $13,990,000.

These high exemption amounts are temporary. They were set by the Tax Cuts and Jobs Act of 2017. A “sunset” clause in that law means that on January 1, 2026, the exemption will drop back to about $6 million (adjusted for inflation) unless Congress passes a new law .

Year of Death	Individual Exemption Amount
2018	$11,180,000
2019	$11,400,000
2020	$11,580,000
2021	$11,700,000
2022	$12,060,000
2023	$12,920,000
2024	$13,610,000
2025	$13,990,000
Source:

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Hitting Pause: How to Get an Automatic Six-Month Extension

The IRS understands that valuing an entire estate in nine months is difficult. Because of this, it provides an automatic six-month extension of time to file Form 706. This request is made by filing Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate Taxes.

You must file Form 4768 before the original nine-month deadline passes. If you do, your new deadline to submit Form 706 will be 15 months after the date of death. The extension is “automatic,” which means you do not need to wait for approval. The IRS will only contact you if your request is denied.

The single most important rule about extensions is this: an extension of time to file is NOT an extension of time to pay . Any estate tax you owe is still due on the original nine-month deadline. Failing to pay on time will result in penalties and interest, even if you have a valid filing extension.

When you file Form 4768, you must provide a reasonable estimate of the estate tax you expect to owe and pay that amount. This forces you to do a preliminary valuation of all assets and debts well before the nine-month mark. If you later find you overpaid, you will get a refund. If you underpaid, you will owe the difference plus interest and penalties.

The “Portability” Lifeline: A Five-Year Exception You Can’t Ignore

A powerful tool called “portability” creates a major exception to the normal deadlines. Portability allows a surviving spouse to use any of their deceased spouse’s unused federal estate tax exemption. This is officially called the Deceased Spousal Unused Exclusion, or DSUE.

For example, a husband dies in 2024 with a $4 million estate. He has a $13.61 million exemption, so he uses $4 million and has $9.61 million unused. Through portability, that unused $9.61 million can be transferred to his surviving wife, adding to her own exemption.

Portability is not automatic. To claim it, the executor of the first spouse to die must file a Form 706 and make the election, even if the estate is below the filing threshold and owes no tax. Forgetting to file this form means the unused exemption is lost forever, a mistake that could cost a family millions of dollars in future taxes.

Because many people were missing this opportunity, the IRS created a special safe harbor. Under Revenue Procedure 2022-32, an estate that is not otherwise required to file a tax return has up to the fifth anniversary of the date of death to file Form 706 and elect portability . To use this relief, you must write the following statement at the top of Form 706: “FILED PURSUANT TO REV. PROC. 2022-32 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)”.

Pros of Filing for Portability	Cons of Filing for Portability
Preserves Millions in Exemptions: Locks in the deceased spouse’s unused exemption, which could be worth millions in future tax savings.	Costs Money Now: Preparing Form 706 requires professional help (attorneys, accountants, appraisers), which can be expensive.
Hedge Against Law Changes: Protects against the scheduled drop in the exemption amount in 2026.	Requires Full Asset Valuation: You must still identify and value all of the decedent’s assets as of the date of death.
Covers Future Growth: Protects the surviving spouse if their assets grow significantly in value over time.	May Seem Unnecessary: If the combined estate is very small, the cost may outweigh the potential future benefit.
Provides Flexibility: Gives the surviving spouse more options for making large gifts to family during their lifetime.	IRS Scrutiny: Filing a return opens the door for the IRS to review the asset valuations, though audits are rare for these returns.
Peace of Mind: Acts as an insurance policy against unexpected windfalls, like a large inheritance for the surviving spouse.	Time and Effort: The process of gathering documents and working with professionals requires significant effort from the executor.

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Three Popular Scenarios: Putting the Rules into Action

Seeing how these rules apply in real life can make them easier to understand. Here are three common situations an executor might face.

Scenario 1: The Large Estate with a Family Business

A person dies in January 2024 with an estate valued at $18 million. The main asset is a family-owned manufacturing business that is very difficult to value. The executor knows they cannot get a proper business appraisal and file a complete return in just nine months.

Executor’s Action	Financial Consequence
Files Form 4768 in September 2024: The executor gets an automatic six-month filing extension. The new due date for Form 706 is in July 2025 (15 months after death).	Avoids a Late-Filing Penalty: This prevents the 5% per month penalty, which could have been over $40,000 per month on the estimated tax due.
Pays Estimated Tax in September 2024: With the help of an accountant, the executor makes a good-faith estimate of the tax owed ($1.75 million) and pays it by the original nine-month deadline.	Minimizes Interest and Penalties: This stops the clock on the 0.5% per month late-payment penalty and the daily compounding interest on the unpaid tax.

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Scenario 2: The Portability Play for a Surviving Spouse

A wife dies in 2024 with assets of $5 million, all left to her husband. Their combined assets are $12 million, which is below the current federal threshold. The husband is 65, in good health, and has a successful investment portfolio. No federal tax is due, so a Form 706 is not required.

Decision	Long-Term Outcome for Surviving Spouse
Executor Files Form 706: The executor files a “portability-only” return to transfer the wife’s unused $8.61 million exemption ($13.61M – $5M) to the husband.	Massive Tax Shield Created: The husband now has his own exemption plus the $8.61 million DSUE. If he dies after 2025 when the exemption is only ~$7 million, he can pass on ~$15.61 million tax-free instead of just ~$7 million.
Executor Does NOT File Form 706: The executor decides filing is too expensive and complicated since no tax is due.	$8.61 Million Exemption is Lost Forever: The wife’s unused exemption vanishes. If the husband’s assets grow and he dies when the exemption is lower, his estate could face a tax bill of over $3.4 million (40% of the unprotected $8.61 million).

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Scenario 3: The Market Crash After Death

A person dies on March 1, 2024, with an estate of $16 million, consisting mostly of stocks. By September 1, 2024 (six months later), a major market correction causes the value of the same stocks to drop to $14 million. The estate is over the $13.61 million exemption in both cases.

Valuation Choice	Tax Savings
Value Assets at Date of Death: The executor uses the $16 million value. The taxable amount is $2.39 million ($16M – $13.61M). The federal estate tax is approximately $956,000.	$0 (This is the baseline tax).
Elect Alternate Valuation Date (AVD): The executor elects on Form 706 to value the assets six months later. The taxable amount is $390,000 ($14M – $13.61M). The federal estate tax is approximately $156,000.	$800,000 in direct tax savings for the estate’s beneficiaries.

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Special Situations That Change the Game

Beyond the standard rules, certain circumstances require special attention. These can create both opportunities and traps for an unprepared executor.

The Alternate Valuation Date (AVD)

If the assets in an estate go down in value in the six months after death, the executor can choose to use this lower value to calculate the estate tax. This is called the Alternate Valuation Date (AVD). This choice is made on Form 706 itself.

There are two critical rules for using the AVD. First, choosing the AVD does not change the filing deadline. The return is still due nine months from the date of death (or 15 months with an extension). Second, you can only elect the AVD if it lowers both the value of the gross estate AND the amount of estate tax owed.

Rules for Non-Residents Who Are Not U.S. Citizens

The rules are completely different for a decedent who was not a U.S. citizen and did not live in the U.S. Their estates must file Form 706-NA. The filing threshold is not millions of dollars; it is just $60,000 in assets located in the United States.

U.S.-situs assets include things like American real estate or stock in U.S. companies. Most importantly, the powerful tool of portability is not available to the estates of non-resident, non-citizen decedents.

The State vs. Federal Maze

Meeting the federal deadline is only half the battle. Twelve states and the District of Columbia have their own separate estate tax, and six states have an inheritance tax . These state taxes often have much lower exemption thresholds.

For example, in 2025, Massachusetts taxes estates over $2 million, and Oregon’s threshold is only $1 million. New York’s exemption is $6.94 million. An estate could easily owe state estate tax even if it owes no federal tax. Each state has its own forms and deadlines, and a federal extension does not automatically extend a state deadline.

The High Cost of Being Late: Penalties and Interest

Missing the filing and payment deadlines triggers severe financial penalties from the IRS. These penalties are separate and can accumulate quickly.

The penalty for filing late is much harsher than the penalty for paying late. This is because the IRS prioritizes getting the information it needs to determine a tax liability.

Penalty Type	How It’s Calculated	Maximum Penalty
Failure-to-File	5% of the net tax due for each month (or part of a month) the return is late.	25% of the net tax due.
Failure-to-Pay	0.5% of the unpaid tax for each month (or part of a month) the tax is unpaid.	25% of the unpaid tax.

On top of penalties, the IRS charges interest on any unpaid tax from the original due date until it is paid in full. The interest rate is the federal short-term rate plus 3 percentage points, and it is compounded daily . This combination of penalties and daily interest can cause the total amount owed to grow at a shocking speed.

Common Mistakes to Avoid

Navigating the Form 706 process is filled with potential traps. Being aware of the most common errors is the best way to avoid them.

Assuming No Return is Needed if No Tax is Due. This is the most expensive mistake. Failing to file a return for a non-taxable estate means you lose the chance to elect portability, potentially costing the surviving spouse millions.
Confusing an Extension to File with an Extension to Pay. Getting a six-month filing extension from Form 4768 does not move the payment deadline. You must still pay your estimated tax by the original nine-month due date to avoid penalties and interest.
Miscalculating the Nine-Month Deadline. Simply adding nine months is not enough. You must use the specific “numerically corresponding day” rule and account for short months like February, or you could be a day or two late, which the IRS considers a full month for penalty purposes.
Underestimating Time for Valuations. Getting professional appraisals for assets like a business or unique real estate takes a long time. Waiting too long to start this process is a primary reason executors miss the deadline.
Forgetting About State Estate Taxes. Many executors focus only on the high federal exemption and forget to check their state’s laws. A state like Massachusetts or Oregon may require a return and tax payment for an estate that is far below the federal radar.

Do’s and Don’ts for Executors

Do’s	Don’ts
✅ Secure the Death Certificate Immediately. This is the official starting gun for the nine-month deadline and is required for almost every administrative task.	❌ Don’t Confuse Form 706 and Form 1041. They are for different taxes (estate transfer vs. estate income) and have different rules and deadlines.
✅ Hire Professional Appraisers Early. Valuing complex assets is the most time-consuming part of the process. Start immediately.	❌ Don’t Assume Portability is Automatic. You must file a complete Form 706 to transfer a deceased spouse’s unused exemption. It is never automatic.
✅ File Form 4768 for an Extension. Even if you think you can meet the deadline, file for the automatic six-month extension. It is free and provides a crucial safety net.	❌ Don’t Wait Until the Last Minute. The amount of paperwork required is enormous. Start gathering documents on day one.
✅ Pay an Estimated Tax by the Nine-Month Deadline. Work with a CPA to make a reasonable estimate of the tax due and pay it on time, even with an extension.	❌ Don’t Ignore State Tax Laws. Your state may have a much lower exemption and a separate deadline. Check your state’s department of revenue website.
✅ Communicate with Beneficiaries. Keep heirs informed about the process and timelines to manage expectations and prevent disputes.	❌ Don’t Try to E-File Form 706. As of now, Form 706 and Form 4768 must be physically printed and mailed to the IRS.

Frequently Asked Questions (FAQs)

1. Is Form 706 an annual return? No. Form 706 is a one-time return filed for the decedent’s estate. The estate’s income tax return (Form 1041) may be required annually until the estate is closed .

2. Can I file Form 706 electronically? No. Form 706 and its extension form (Form 4768) cannot be e-filed. They must be printed and physically mailed to the IRS service center listed in the form instructions.

3. Do I have to file Form 706 if no tax is due? No, unless you want to make the portability election. To transfer a deceased spouse’s unused exemption (DSUE) to the surviving spouse, you must file Form 706 even if no tax is owed.

4. Does choosing the Alternate Valuation Date (AVD) change my filing deadline? No. The AVD only changes the date on which assets are valued (to six months after death). The filing deadline remains nine months from the date of death, or 15 months with an extension.

5. How long do I have to elect portability if I missed the original deadline? For estates not otherwise required to file, you have up to five years from the date of death to file Form 706 and elect portability under a special IRS safe harbor, Revenue Procedure 2022-32.

6. What is the difference between an estate tax and an inheritance tax? An estate tax is paid by the estate itself before assets are distributed. An inheritance tax is paid by the person who inherits the assets. The federal government only has an estate tax .

7. If I get a filing extension, does that also give me more time to pay the tax? No. An extension to file is never an extension to pay. Any tax owed is still due nine months after the date of death, and late payments will incur penalties and interest.

8. What is the filing threshold for a non-resident who was not a U.S. citizen? A Form 706-NA must be filed if the value of the decedent’s assets located in the U.S. is more than $60,000. This is much lower than the multi-million dollar threshold for U.S. citizens.