The federal gift tax threshold for 2024

You can give away up to $18,000 per person per year without filing a gift tax return or using any of your lifetime exemption. This is called the annual exclusion. If you give more than $18,000 to a single person in one calendar year, you must file Form 709 with the IRS, even if you do not owe tax.

The $18,000 limit applies to each person you give to separately. You can give $18,000 to your child, $18,000 to your spouse, $18,000 to a friend, and so on, all in the same year without triggering a return requirement. Married couples can combine their exclusions, meaning a married couple can give $36,000 per person per year.

This threshold changes most years. The IRS adjusts it for inflation in $1,000 increments. In 2023 it was $17,000; in 2024 it is $18,000. Check the IRS website each January to confirm the current year's limit.

Key Takeaways

  • You can give up to $18,000 per person per year in 2024 without filing a gift tax return, and married couples can give $36,000 per person per year combined.
  • Gifts above the annual limit require you to file Form 709, but you typically do not owe tax unless you exceed your lifetime exemption of $13.61 million.
  • Certain gifts are never taxed, including direct payments to schools or medical providers, gifts to spouses, and gifts to charities.
  • The annual exclusion resets on January 1 each year, so a gift on December 31 and another on January 1 count toward separate years.
  • State gift taxes exist in a few states and have their own limits separate from federal rules.

What happens when you exceed the annual limit

If you give more than $18,000 to one person in a single year, you file Form 709 to report the excess. The excess amount counts against your lifetime exemption, which is $13.61 million as of 2024. Most people never reach this lifetime limit, so filing the form does not mean you owe tax that year.

The lifetime exemption is shared between gifts you make during your life and your estate after you die. If you use $100,000 of your exemption on gifts now, your heirs will have $100,000 less to inherit tax-free when you pass away. For most households, this trade-off is not a concern because the exemption is so large.

The lifetime exemption amount changes with new tax laws. It is scheduled to drop to roughly $7 million per person on January 1, 2026, unless Congress extends the current rules. This is important to know if you are planning large gifts in the next few years.

Gifts that do not count toward the limit

Some gifts are never taxed and do not count toward your annual exclusion. Direct payments to a school or medical provider for someone else's tuition or medical bills are unlimited and tax-free. You must pay the provider directly—if you give money to the person and they pay the provider, it counts as a regular gift.

Gifts to your spouse are unlimited if your spouse is a U.S. citizen. Gifts to charities are also unlimited and may be tax-deductible. Gifts to political organizations and candidates have their own rules and are generally not deductible.

Payments for someone's living expenses—rent, groceries, utilities—are not gifts if you are legally obligated to support them, such as a parent supporting a minor child. If you support an adult child or parent voluntarily, those payments may count as gifts depending on the circumstances.

How the calendar year works for gift timing

The annual exclusion is based on the calendar year, January 1 through December 31. A gift on December 31 counts toward that year's limit. A gift on January 1 counts toward the next year's limit. This matters if you are close to the $18,000 threshold.

Some people time gifts to split them across two years. If you want to give $30,000 to your child, you could give $18,000 on December 31 of one year and $12,000 on January 1 of the next year. Both gifts stay within the annual limit and require no return filing.

State gift taxes and additional rules

Most states do not have a gift tax, but Connecticut, Delaware, Illinois, Louisiana, Mississippi, New York, North Carolina, and Tennessee have had gift taxes at various points. As of 2024, only a handful of states actively enforce gift taxes, and the rules vary widely. Check your state's tax authority website if you live in or give to someone in one of these states.

Some states have inheritance taxes instead, which explore to what heirs receive rather than what you give. These are different from gift taxes and do not affect your ability to give during your lifetime.

Gifts to minors and custodial accounts

You can give up to $18,000 per year to a minor without triggering a return, just as you would with an adult. If you want to give more and have it managed for the child until they reach adulthood, you can use a custodial account under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). These accounts still count toward your annual exclusion and lifetime exemption.

A 529 college savings plan allows a special election: you can give up to $18,000 per year per beneficiary, or you can elect to treat a single large gift as if it were spread over five years. This means you could give $90,000 to a 529 plan in one year and treat it as $18,000 per year for five years, avoiding the need to file Form 709. Only one person per beneficiary can use this election in any five-year period.

Frequently Asked Questions

Do I owe gift tax if I give more than $18,000?

Not necessarily. You owe tax only if you exceed your lifetime exemption of $13.61 million. Most people file Form 709 to report the excess but do not owe tax. The excess straightforward reduces the amount you can pass to heirs tax-free when you die.

Can I give cash, or does it have to be a check?

Cash, checks, stocks, real estate, and personal property all count as gifts. The form of the gift does not matter. What matters is the fair market value of what you give on the date you give it.

What if I give money to someone and they use it to pay my medical bills?

That is a gift to them, not a direct payment to the medical provider. It counts toward your annual limit. To avoid the limit, pay the provider directly yourself.

Does my spouse's gift to someone reduce my annual limit?

No. Each person has their own $18,000 annual exclusion. Your spouse's gifts do not affect yours. If you are married and want to give jointly, you can combine your exclusions to give $36,000 per person per year.

What if I made large gifts years ago—do they still count?

Yes. All gifts you have made during your lifetime count toward your $13.61 million lifetime exemption. The IRS tracks cumulative gifts on Form 709 filings. If you filed Form 709 in past years, those amounts are already recorded.