Updated July 29, 2026. Quick answer: It must be elected. IRC §2010(c)(5)(A) provides that the deceased spousal unused exclusion “may not be taken into account … unless the executor … files an estate tax return on which such amount is computed and makes an election.” That means filing a return even when no return would otherwise be required — and the election, once made, is irrevocable.
The failure mode
An estate well under the exclusion owes no tax and has no filing obligation, so no return is filed. The unused exclusion is simply lost. Years later the survivor’s own estate discovers it needed the amount that was never claimed.
There is a simplified late-election route. A revenue procedure effective in 2022 — superseding an earlier one that allowed only two years — permits the return to be filed on or before the fifth annual anniversary of the date of death, with specific language required at the top of the form and no user fee. It is not available if the estate was independently required to file.
The trap inside the fix. The same procedure provides that if the added exclusion produces an overpayment by the surviving spouse or their estate, no claim for credit or refund may be made once the ordinary limitations period for that transfer has expired. So you can make the election late, have it accepted, and still be unable to recover the tax you already paid. The five years are for the election, not for the money.
Worth doing even when it looks unnecessary
The exclusion amount is scheduled to move, portfolios grow, and the survivor may remarry or receive an inheritance. Filing to preserve the election costs a return; failing to file costs an amount nobody can predict at the time. It is one of the few decisions here where the cautious answer is clearly correct.
Every dollar figure in this area is indexed and none is quoted here. The rate-schedule thresholds, the standard deduction, the estate exclusion and the IRMAA tiers all move annually, and two of them move on their own separate schedules. Take current figures from the IRS or the Social Security Administration for the year in question.
Sources
IRC §1(j)(2)(A) and (j)(2)(C); §2(a) and §2(b); §6013(a); §63(c)(2), (c)(7) and (f)(3); §121(a), (b)(2)(A) and (b)(4); §72(t)(2)(A); Treas. Reg. §1.408-8(c); §408(d)(3)(C); §2010(c)(5)(A); Rev. Proc. 2022-32; 42 U.S.C. §402(k)(3)(A) and §1395r(i); 20 C.F.R. §418.1201 and §418.1205. All read July 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.