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Possible Reduction In The DC Estate Tax Credit?

Ten D.C. Councilmembers have introduced the Estate Tax Clarification Amendment Act of 2018 in order to decouple the DC estate tax from the federal.

As you may recall, the D.C. estate tax credit in 2017 was limited to $2 million and was supposed to increase to the federal level of $5.6 million. However, with the passage of The Tax Cut and Jobs Act in December, the federal exemption amount is now approximately $11.2 million.  The D.C. Council did not anticipate such a substantial increase in the federal estate tax exemption when it passed its own legislation in 2014 increasing the estate tax.

With the new Amendment, D.C. Council is limiting the unified credit to $2,185,800, to be adjusted annually on January 1st in accordance with the most recent local CPI. The Amendment also decreases the estate exemption to $5.6 million (adjusted annually on January 1 in accordance with the most recent local Consumer Price Index). Under this revised law, a D.C. estate tax return would need to be filed if the value of an estate exceeds $5.6 million.

We will be sure to keep you updated on this Amendment but please check in with your own advisor on this.



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