How to File Federal Form 706 for Tax Year 2022

According to the IRS, the estates of U.S. citizens and residents who died in 2022 face a critical filing requirement if the gross estate value exceeds $12.06 million. That figure may sound high, but it captures more families than many realize once life insurance, retirement accounts, and real estate are added together. The official estate tax return for these cases is Federal Form 706 for tax year 2022, and the stakes for completing it correctly are significant: penalties for late or incorrect filing, missed opportunities for deductions, and even the permanent loss of portability benefits for a surviving spouse.

The responsibility for filing falls squarely on the executor or administrator of the estate. This role carries legal liability, meaning mistakes are not just clerical oversights; they can translate into costly penalties and unnecessary tax bills. Executors who fail to attach crucial documents like the death certificate, Form 712 for life insurance, or prior gift tax returns can face processing delays that leave beneficiaries waiting months. Even worse, overlooking the portability election could deprive a surviving spouse of millions in tax-free transfer potential, an error the IRS cannot always fix after deadlines pass.

This guide will walk you through the filing process, highlighting what has changed for 2022, which documents must be obtained, and which elections provide relief in complex estates. We will explain how to avoid common pitfalls such as inaccurate asset valuations or incomplete schedules, and why taking the time to file thoroughly is a financial and legal advantage. Whether you are handling a large estate above the exemption threshold or filing solely to preserve portability, this article is designed to provide clarity in a process that often feels overwhelming.

Understanding Federal Form 706 for Tax Year 2022

Federal Form 706 is the estate tax return the IRS requires when a decedent’s estate reaches a certain threshold. It calculates the federal estate tax and the generation-skipping transfer (GST) tax. This form ensures that large wealth transfers after a decedent’s death are correctly reported and taxed. Even if the estate does not owe tax, filing may still be required to secure advantages such as the portability election for a surviving spouse.

The form covers the entire taxable estate: real property, securities, insurance policies, retirement accounts, jointly owned assets, and certain transfers made during life. Executors must provide accurate valuations of these assets and complete multiple schedules that document the estate in detail. The return is not just a formality; it is the official tax return that determines whether the estate owes tax and establishes the amount of unused exclusion that can be transferred to a surviving spouse.

Who Is Required to File?

The IRS requires filing when the gross estate, combined with adjusted taxable gifts and specific exemptions, exceeds $12.06 million for decedents who died in 2022. This exclusion is indexed for inflation, so it changes from year to year. Executors should be cautious when calculating because assets like life insurance proceeds or retirement accounts can push an estate above the threshold.

Another essential requirement is the portability election. Even when an estate is below the filing threshold, the executor may need to file Form 706 to allow a surviving spouse to claim the unused exclusion. Failing to do this can permanently forfeit millions of dollars in tax-free transfer potential. Executors are legally required to consider whether portability benefits the family; inaction can create unnecessary tax burdens later.

Who Qualifies as an Executor?

The IRS defines the term “executor” broadly. It includes the court-appointed executor, administrator, or personal representative of the estate. If no one has been formally appointed, any person possessing estate property may be considered an executor for tax purposes. This definition ensures that someone is always responsible for filing when required.

Executors are not only responsible for completing the return; they are accountable for its accuracy. That means gathering certified copies of wills, death certificates, and asset valuations. The IRS does not accept informal statements in place of documentation. Executors who take shortcuts risk IRS rejection, delays in estate settlement, and penalties for incomplete or incorrect filing.

Filing Thresholds and Requirements for Form 706

1. Estate Above $12.06 Million

• When Filing Is Required:
  • Form 706 must be filed within 9 months of the decedent’s death
• Key Considerations:
  • All assets and deductions must be included
  • Federal estate tax may apply

2. Estate Below $12.06 Million With No Portability Election

• When Filing Is Required:
  • No Form 706 filing required
• Key Considerations:
  • The executor should still confirm the total gross estate value
  • Review whether any elections or special circumstances apply

3. Estate Below $12.06 Million With Portability Election Desired

• When Filing Is Required:
  • Form 706 must be filed to transfer the DSUE (Deceased Spousal Unused Exclusion) amount to the surviving spouse
• Key Considerations:
  • A simplified valuation method may be used for marital or charitable deduction property

What Changed for 2022

The IRS adjusts exemption amounts and procedures each year. For tax year 2022, several important updates affect estates and executors. Understanding these changes is essential because they directly influence filing thresholds, portability elections, and administrative requirements.

Inflation Adjustments

For decedents who died in 2022, the basic exclusion amount was set at $12,060,000. This figure determines whether an estate is required to file Federal Form 706. The corresponding basic credit amount is $4,769,800, which offsets the tax liability. Executors should also note adjustments to related limits: the special-use valuation ceiling rose to $1,230,000, and the Section 6166 installment threshold (for closely held businesses) increased to $1,640,000.

These adjustments may seem technical, but they make a meaningful difference. A farm or small business that misses the exclusion amount in one year may qualify in another. Executors should confirm the exact year of the decedent’s death and apply the appropriate exclusion figure, since using the wrong number can lead to incorrect tax computations and IRS rejection.

New IRS Revenue Procedures

A significant change for 2022 came from Revenue Procedure 2022-32. This ruling created a simplified method for making a portability election long after the original nine-month filing deadline. Estates not otherwise required to file may now elect portability for up to five years after the decedent’s death. To use this option, the executor must clearly state at the top of the return: “Filed Pursuant to Rev. Proc. 2022-32 to Elect Portability under section 2010(c)(5)(A).”

This extension is significant for married couples. In previous years, failure to act within nine months meant the surviving spouse lost the DSUE amount permanently unless they obtained a private letter ruling, a costly and uncertain process. The simplified method now provides relief, but only if the estate was not otherwise required to file under Section 6018(a). Executors should check eligibility carefully before relying on this rule.

Fees and Processing Updates

Another change relevant to 2022 filings involves the estate tax closing letter (ETCL). Since October 28, 2021, the IRS no longer issues these letters automatically. Instead, executors must submit a request through Pay.gov and pay a $67 fee. The IRS recommends waiting at least nine months after filing before requesting the letter.

Although this may feel inconvenient, ETCLs are often needed to satisfy state courts, financial institutions, and beneficiaries. Executors should plan for this cost and include the request in their estate administration timeline. Failure to obtain the letter may delay closing the estate with local courts or distributing assets to heirs.

Step-by-Step Filing Guide

Filing Federal Form 706 for tax year 2022 can feel overwhelming. The form is lengthy, the schedules are detailed, and the IRS requires complete documentation for every reported asset. To make this process manageable, follow these structured steps.

Step 1 – Gather Crucial Documents

Executors should not begin completing Form 706 until all required paperwork is in order. Missing documents will delay processing and may cause penalties.

• Executors must obtain a certified copy of the death certificate. This document is mandatory and must be attached to every Form 706 return submitted to the IRS.
  
  
• Executors should secure a certified copy of the will if one exists. If a certified copy cannot be obtained, a regular copy may be submitted, but it must include a written explanation for why certification is unavailable.
  
  
• A complete inventory of assets must be prepared. This inventory should include real estate, retirement accounts, bank balances, investments, and personal property, and each item must be valued as of the date of death.
  
  
• Executors are required to collect all life insurance information associated with the decedent. If the IRS requires it, Form 712 must be attached for each policy to document policy values and beneficiaries.
  
  
• Executors must locate all prior gift tax returns (Forms 709) filed by the decedent. These forms are essential because they directly affect the estate tax calculation and the adjusted taxable gifts total.
  
  
• Executors should gather proof of all debts and expenses associated with the estate. These may include funeral bills, mortgages, or outstanding loans, and they are essential because they reduce the estate's taxable value.
  
  
• Official executor appointment documentation must be obtained. The IRS will not accept a simple statement of authority, so certified court orders or equivalent legal documentation are required.

Step 2 – Determine the Correct Form Version

Executors must use the August 2019 revision of Form 706 for any decedent who died in 2022. Using the wrong version will result in rejection by the IRS. Always download the official form directly from IRS.gov to ensure accuracy.

Step 3 – Complete Form 706 Sections

The form is divided into multiple parts. Each section must be completed in full, even if values are zero. Leaving blank fields will lead to IRS delays.

1. Part 1 – Decedent and Executor Information: Enter the decedent’s full name, Social Security number, and date of death. Provide the executor’s contact details and check the appropriate boxes if multiple executors exist.
   
   
2. Part 2 – Tax Computation: Calculate the tentative tax by adding the taxable estate and adjusted taxable gifts. Apply credits and subtract prior gift taxes to determine the final estate tax due.
   
   
3. Part 3 – Elections by the Executor: Choose whether to use alternate valuation, special-use valuation, installment payments under Section 6166, or postponement under Section 6163. Each election must be carefully considered because it affects tax liability.
   
   
4. Part 4 – General Information: Report details about trusts, powers of appointment, and transfers made during life. This section ensures the IRS has a complete picture of the estate.
   
   
5. Part 5 – Recapitulation: Summarize totals from all schedules. Accuracy is critical here since errors can cause mismatches and IRS notices.
   
   
6. Part 6 – DSUE portability: Complete this section if you elect portability. This is how the surviving spouse may use the deceased spouse’s unused exclusion.

Step 4 – Prepare Required Schedules

Each schedule corresponds to a type of asset or transaction. Executors must carefully review which ones apply.

Required Schedules by Asset Type (Form 706)

Schedule A – Real Estate

• Description: Real estate owned by the decedent
• When Required: For all real property held at the time of death

Schedule B – Stocks and Bonds

• Description: Stocks, bonds, and other securities
• When Required: For all securities included in the estate

Schedule C – Mortgages, Notes, and Cash

• Description: Loans, mortgages, promissory notes, and cash balances
• When Required: When the estate includes loans receivable, mortgages, or cash assets

Schedule D – Insurance

• Description: Life insurance policies
• When Required: For life insurance policies owned by the decedent

Schedule E – Jointly Owned Property

• Description: Property or accounts owned jointly
• When Required: For joint bank accounts or jointly owned property

Schedule F – Other Miscellaneous Property

• Description: Personal property, digital assets, and collectibles
• When Required: When the estate includes miscellaneous or nontraditional assets

Schedule G – Transfers During Life

• Description: Gifts and transfers made before death
• When Required: For lifetime gifts or transfers subject to estate tax review

Schedule H – Powers of Appointment

• Description: Assets subject to general powers of appointment
• When Required: When the decedent held authority over certain assets

Schedule I – Annuities

• Description: Annuity contracts
• When Required: For annuities included in the estate

Executors must also file Schedule R-1 if the generation-skipping transfer tax applies. In estates electing special valuation, Schedule A-1 is required. Schedule U must be included for estates claiming conservation easements.

Step 5 – Final Filing Checklist

Before mailing, executors should confirm every page is complete. The IRS has noted that incomplete forms are not processed.

• Executors must ensure that pages 1 through 4 of Form 706 are fully completed, signed, and dated. The IRS will not accept a return that lacks proper signatures or dates.
  
  
• The return must include the death certificate, a certified copy of the will, Form 712 for each life insurance policy, and all prior gift tax returns. Without these attachments, the IRS may delay processing or reject the filing.
  
  
• Executors should double-check that the totals listed in Part 5 of the form match the numbers carried over from the individual schedules. Any inconsistencies between totals and schedules can result in IRS notices and time-consuming corrections.
  
  
• All elections in Part 3 of the return must be consistent with the estate’s situation. Executors should also confirm that each election is supported with the required documentation.
  
  
• The return must be stapled correctly: Form pages first, followed by schedules, and finally all supporting documents. Proper organization helps ensure that the IRS processes the return without unnecessary delays.
  
  
• Executors should include a payment or a payment voucher if estate tax is due. The IRS requires full payment unless an extension for payment has been specifically requested and approved.
  
  
• Finally, the return must be mailed to the correct IRS address. Executors should verify whether the filing is an initial or an amended return, since each has a different destination address.

A well-prepared package reduces the risk of delays, IRS correspondence, and penalties. Executors should keep complete copies for their records and consider a professional accounting review before submission.

Filing Methods and Deadlines

Executors must complete Form 706 accurately and submit it correctly and on time. The IRS sets strict deadlines, and late or incorrect filing can result in costly penalties or the loss of key elections. Understanding how and where to file is as important as completing the form.

Paper Filing vs. Electronic Filing

The IRS still requires most estate tax returns to be filed on paper. Executors must mail the completed Form 706 and all schedules and attachments to the proper IRS address.

• For regular mail submissions, the return should be sent to: Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999. Executors should allow extra time for postal delivery and keep proof of mailing.
  
  
• For private delivery services, the return must be sent to: Internal Revenue Submission Processing Center, 333 W. Pershing Road, Kansas City, MO 64108. Private delivery is often faster and provides detailed tracking information.
  
  
• The address for amended returns is different: Internal Revenue Service Center, Attn: E&G, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915. Executors should clearly mark the return as amended to avoid confusion.

Electronic filing for Form 706 is limited. While the IRS has authorized some providers, most estate tax returns are still processed through paper submission. Executors should check IRS.gov for the latest guidance on electronic options, but should plan primarily for mailing.

Deadlines and Extensions

Form 706 must be filed within nine months of the decedent’s death. This deadline applies to both estate tax liability and portability elections.

• Executors may file Form 4768 before the original deadline expires to request an automatic six-month extension. This extension applies only to filing, not payment.
  
  
• To extend the time to pay, executors must also request a payment extension on Form 4768 and demonstrate that immediate payment would cause undue hardship. The IRS reviews such requests carefully and does not approve them automatically.
  
  
• Executors should track deadlines carefully and spend extra time gathering appraisals, preparing schedules, and obtaining professional reviews. Missing the nine-month window without extension is a grave error.

Consequences of Missing Deadlines

Failing to file or pay on time has immediate consequences under the Internal Revenue Code. Penalties are steep, and they grow the longer the executor delays.

• The IRS imposes a failure-to-file penalty of 5 percent of the unpaid tax for each month the return is late. This penalty can grow to a maximum of 25 percent.
  
  
• Unpaid balances are also subject to a 0.5 percent failure-to-pay penalty per month, which continues until the estate satisfies the full tax obligation.
  
  
• Interest accrues on any unpaid balance from the original due date, regardless of extensions. Executors who delay payment quickly increase the estate’s total liability.
  
  
• Perhaps most costly, missing the deadline may also forfeit the portability election. Without Form 706 filed in time, the surviving spouse cannot claim the DSUE amount unless relief under Revenue Procedure 2022-32 applies.

Executors should recognize that filing on time is not optional. It is a legal requirement and directly affects the financial security of beneficiaries and surviving spouses.

Payment Options and IRS Relief

Filing Form 706 is only part of the executor’s responsibility. Estate and generation-skipping transfer taxes must also be paid by the due date. Executors who fail to pay on time will face interest charges and penalties, even if an extension for filing has been granted. The IRS does allow several payment options and special relief provisions, but they must be followed precisely.

Standard Payment Methods

The IRS provides two primary ways to pay estate tax: by check or electronically. Executors should choose the method that ensures proof of payment and timely posting.

• Check payments must be made payable to “United States Treasury.” The check should include the decedent’s name, Social Security number, and the words “Form 706” on the memo line. Executors should avoid mailing a single check exceeding $100 million; instead, multiple smaller checks should be issued if necessary.
  
  
• Electronic payments are made through the Electronic Federal Tax Payment System (EFTPS). This system is a free service of the Department of the Treasury, allowing executors to schedule payments in advance. Payments must be finalized by 8:00 p.m. Eastern time on the day before the due date.

Special Payment Elections

The Internal Revenue Code provides relief for estates with limited liquidity, especially when a closely held business makes up a significant portion of the estate. Executors should consider these elections if immediate payment would cause financial strain.

• Section 6166 installment payments allow an estate with a closely held business interest worth more than 35 percent of the adjusted gross estate to pay tax over time. Payments may extend for up to 14 years, with reduced interest on the first $1,640,000 tax due for 2022. Executors must make this election on a timely filed return.
  
  
• Section 6163 postponement permits delaying tax payment attributable to specific remainder or reversionary interests. This election is less common but may apply in particular estate situations. Executors must document the election clearly on the return.

Relief and Extensions

When unusual circumstances make payment within nine months impossible, the IRS may allow additional relief. Executors must understand that extensions to the filing do not automatically extend the time to pay.

• Executors may use Form 4768 to apply for both filing and payment extensions. To obtain a payment extension, they must show that immediate payment would cause undue hardship to the estate.
  
  
• Executors can seek relief through a private letter ruling in minimal cases. This process involves a formal request to the IRS for individualized consideration and often requires professional legal or accounting services.
  
  
• Executors should weigh the cost of requesting relief against the potential nonpayment penalties. Sometimes, planning and securing liquidity through asset sales or loans may be the more practical approach.

Common Mistakes to Avoid

Even the most careful executors can make errors when filing Federal Form 706 for tax year 2022. Many mistakes come from overlooking details, rushing the filing process, or misunderstanding IRS requirements. Knowing these common pitfalls can prevent penalties, delays, and unnecessary costs.

Filing Errors

Executors often fail to file within the nine-month deadline, one of the most damaging mistakes. Missing this deadline without an extension triggers failure-to-file penalties and may also cause the surviving spouse to lose portability. Executors should always file Form 4768 in advance if additional time is needed.

Another standard error is failing to elect portability when it would benefit the surviving spouse. Even when the estate owes no tax, skipping the filing means that the DSUE amount cannot be transferred later. This oversight can cost families millions of dollars in lost tax savings.

Valuation Errors

Many estates submit returns that are incomplete or incorrectly value assets. Executors sometimes rely on estimates rather than obtaining qualified appraisals, especially for real estate, closely held businesses, or artwork. Wrong values can trigger penalties under Section 6662 and expose the estate to additional tax.

Executors may also misuse the alternate valuation method. This election should only be used if it reduces the gross estate and the estate tax. Filing with an alternate valuation that increases liability defeats its purpose and creates additional complexity for the estate.

Documentation Errors

Returns are frequently delayed or rejected because required attachments are missing. The IRS requires the death certificate, a certified copy of the will, and Form 712 for insurance policies when applicable. Submitting the return without these documents guarantees correspondence and delay.

Another issue is incomplete schedule information. Executors sometimes leave blank fields or provide partial details, believing the IRS will fill in the gaps. Instead, the IRS may reject the return entirely if every required field is not completed with a value, zero, or “N/A.”

Election Errors

Executors occasionally make elections that contradict the estate’s circumstances. For example, choosing Section 6166 installment payments when the business interest does not meet the 35 percent requirement results in disallowing the election. This mistake forces immediate payment and can disrupt estate administration.

FAQs

Do all estates have to pay estate tax when filing Form 706?

Not every estate owes estate tax. The filing requirement applies when the gross estate plus adjusted taxable gifts exceeds the annual exclusion threshold, or when the executor files solely for portability. The IRS reviews the estate as an entity, not just individual assets, so executors must provide a full accounting. The intended outcome is a fair tax calculation, ensuring the correct sum is reported for compliance.

Why is filing important for a surviving spouse?

A surviving spouse may use the deceased spouse’s unused exclusion (DSUE) to shelter future transfers from estate tax. If Form 706 is not filed, the DSUE is lost outright and cannot be reclaimed. Executors must file even when no tax is due to protect this benefit. The matter often requires clear communication between family members, since decisions made previously can affect long-term financial outcomes for the surviving spouse.

What happens if the estate previously missed the nine-month deadline?

If the executor previously failed to meet the nine-month deadline, relief may still be possible. Revenue Procedure 2022-32 created a simplified method allowing some estates to file within five years of the decedent’s death. Executors must clearly mark the return to show it is filed under this rule. The team handling the estate should keep in mind that relief is not automatic and depends on eligibility.

Can estates in another country still be required to file Form 706?

Yes, estates of U.S. citizens and residents must file Form 706 even if the decedent had property in another country. Executors must include worldwide assets and may claim foreign death tax credits if applicable. Documentation from the foreign probate court or tax authority may also be required. Executors should remember that cross-border communication and compliance can take longer, so early preparation is a practical matter.

Should executors handle Form 706 alone or seek professional help?

While some executors prepare Form 706 without assistance, the process can be complex. Estate tax returns involve valuation, elections, and schedules that must be accurate and consistent. A professional team of accountants or attorneys often ensures compliance and prevents errors. Executors should weigh the sum of potential penalties against professional costs. In most cases, keeping peace of mind and resolving the matter efficiently makes