IRS Form 706 in Kansas: When to File, Portability, and the K-706NT History

The federal estate tax return — IRS Form 706 — causes significant confusion in Kansas estates, partly because of the state's history with its own version of the form, and partly because the circumstances under which Form 706 must be filed are frequently misunderstood.

Here is a clear breakdown of when Form 706 applies to Kansas estates, what it accomplishes, and what the historical Kansas Form K-706NT was about.

The Federal Estate Tax: Who It Actually Hits

Under the One Big Beautiful Bill Act, the federal estate and gift tax exemption for 2026 is $15 million per individual, inflation-adjusted. For married couples, the combined exemption reaches $30 million. The federal estate tax rate on amounts above the exemption is 40%.

For practical purposes: the overwhelming majority of Kansas estates will never come close to $15 million. The IRS estate tax is primarily a concern for estates with significant business interests, multiple large real estate holdings, or substantial investment portfolios accumulated over decades.

If the total gross estate — all assets, including life insurance proceeds, retirement accounts, and non-probate assets that are pulled into the estate for estate tax purposes — is below the applicable exemption, no federal estate tax is owed and generally no Form 706 needs to be filed.

When Form 706 Must Be Filed in Kansas

Two situations require filing Form 706 even when the estate is not taxable:

1. The estate exceeds $15 million. If the gross estate exceeds the applicable exemption, Form 706 is mandatory. The return is due nine months after the date of death, with an automatic six-month extension available if requested before that deadline. The estate tax on the amount above the exemption is 40%.

2. The portability election for a surviving spouse. This is the more common reason a Kansas executor files Form 706 — even for estates nowhere near the $15 million threshold.

Portability: The Reason Most Kansas Executors Should Consider Form 706

Federal law allows a surviving spouse to claim the "Deceased Spousal Unused Exclusion" (DSUE) — essentially, any portion of the first spouse's $15 million exemption that wasn't used at death. By adding the DSUE to the surviving spouse's own exemption, the couple effectively gets a combined $30 million of protection.

To capture this, the executor of the deceased spouse's estate must file Form 706 and make the portability election. This must happen within nine months of the date of death (extendable to 15 months with an extension).

If the executor does not file Form 706, the portability election is permanently lost. The surviving spouse's future estate loses access to the deceased spouse's unused exemption forever.

For couples with modest estates (say, $2 million to $8 million), portability may seem irrelevant now. But estates grow. Farmland appreciates. Life insurance proceeds are added in. If a surviving spouse lives another 20 years, their estate could grow substantially. Filing Form 706 today to preserve portability costs a few hundred to a few thousand dollars in professional fees — not filing it could cost the estate millions in federal tax decades later if the surviving spouse's estate grows above the exemption.

Executors of married decedents with any meaningful assets should discuss the portability election with a CPA or estate attorney before the nine-month deadline passes.

What IRS Form 706 Contains

Form 706 is a detailed accounting of the gross estate, including:

• All probate and non-probate assets
• Life insurance proceeds (included in the gross estate if the deceased owned the policy)
• Retirement accounts
• Jointly held property
• Taxable gifts made during the deceased's lifetime (reducing the available exemption)
• Deductions: marital deduction, charitable deduction, debts, funeral expenses, and administrative costs
• The portability election

The return must be filed using the estate's EIN, not the deceased's Social Security Number.

What K-706NT Was — and Why It's No Longer Relevant

When Kansas operated its own estate tax, it used forms to track and document estate tax obligations at the state level. Kansas Form K-706NT was a "Request for Determination of No Kansas Estate Tax Liability" — essentially a waiver or clearance document used by executors to formally establish that no Kansas estate tax was owed.

Kansas repealed its estate tax entirely for decedents dying after December 31, 2009. The KDOR no longer requires or processes K-706NT for modern deaths. There is no state-level Form 706 equivalent required for any estate in Kansas today.

The confusion around K-706NT typically arises when title companies or the Register of Deeds encounter older properties — situations involving chains of title where a decedent died in the 2000s or earlier, and the estate was never formally closed with the state. If you're dealing with a property title issue referencing Kansas estate tax history, consult a title attorney who can evaluate whether the issue relates to a pre-2010 death that requires historical documentation.

Deducting Funeral Expenses on Form 706

For estates that do file Form 706, funeral expenses are deductible on Schedule J of the return. This reduces the gross taxable estate dollar-for-dollar.

However, because Kansas has no estate tax, there is no corresponding state-level deduction for funeral expenses. The deduction is exclusively a federal benefit on Form 706.

For Kansas estates below $15 million — where no Form 706 is required for tax purposes — funeral expenses still hold high statutory priority for reimbursement from estate assets under Kansas probate law. The executor can be reimbursed from estate funds regardless.

For a complete guide to every Kansas estate tax obligation, including the portability election timeline and executor filing responsibilities, see the Kansas Final Tax & Estate Tax Guide.

IRS Form 706 instructions are available at irs.gov. The filing deadline is subject to change — verify with a tax professional for the specific year of death.

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