The 2025 federal gift tax limit is $18,000 per person per year

You can give up to $18,000 to any one person in 2025 without filing a gift tax return or using any of your lifetime exemption. This amount is called the annual exclusion. If you give more than $18,000 to a single person in one calendar year, you must report the overage on Form 709, even if you owe no tax on it.

The annual exclusion applies to gifts of money, property, investments, or anything else of value. It resets on January 1 each year. If you give $18,000 to your daughter on December 31, 2025, and another $18,000 on January 1, 2026, both gifts are within the limit because they fall in different calendar years.

Married couples can combine their exclusions. If you are married, you and your spouse can each give $18,000 to the same person in the same year, for a total of $36,000, without filing a return or reducing your lifetime exemption.

Key Takeaways

  • You can give $18,000 per person per calendar year in 2025 without filing a gift tax return or using your lifetime exemption.
  • Married couples can give $36,000 combined to one person per year without triggering gift tax reporting.
  • Gifts to spouses who are U.S. citizens and gifts to charities have no dollar limit and never count against your exemption.
  • If you give more than $18,000 to one person in a year, you report the overage on Form 709, but you likely owe no tax unless you have already used your $13.61 million lifetime exemption.
  • The annual exclusion amount increases most years based on inflation; it was $17,000 in 2023 and $18,000 in 2024 and 2025.

Gifts that do not count toward the annual limit

Certain gifts fall outside the annual exclusion entirely. Gifts to your spouse (if your spouse is a U.S. citizen) have no limit. You can give your spouse $1 million, $10 million, or any amount, and none of it counts as a taxable gift.

Gifts to charities registered with the IRS also have no limit. If you donate $50,000 to a may have access to charity, it does not use any of your $18,000 annual exclusion and does not reduce your lifetime exemption. You may also be able to deduct the donation on your income tax return.

Tuition and medical expenses paid directly to the school or medical provider do not count as gifts at all, even if you pay them for someone else. If you pay your grandchild's college tuition directly to the university, or pay a hospital bill directly to the hospital on behalf of your parent, those payments are not subject to gift tax limits. You must pay the provider directly; reimbursing the person after they have paid does count as a gift.

What happens if you give more than $18,000 in one year

If you give $25,000 to your son in 2025, you must file Form 709 with the IRS to report the $7,000 overage. Filing the form does not mean you owe tax. Instead, the $7,000 is subtracted from your lifetime exemption, which is $13.61 million in 2025.

Most people never owe gift tax because the lifetime exemption is so large. You would have to give away more than $13.61 million total over your lifetime (or at death) before owing any federal gift tax. For that reason, filing Form 709 is usually a reporting requirement, not a tax bill.

However, the lifetime exemption is set to drop to roughly $7 million per person on January 1, 2026, unless Congress changes the law. If you plan to give large gifts, the timing matters. Gifts made in 2025 use the higher $13.61 million exemption; gifts made in 2026 will use the lower amount.

State gift taxes and other rules

The federal gift tax limit applies nationwide, but a few states also have their own gift taxes. Connecticut, Delaware, Illinois, Louisiana, Mississippi, New York, North Carolina, and Tennessee have imposed gift taxes at various times, though most are no longer active. Check your state's tax authority website to confirm whether your state taxes gifts.

If you are not a U.S. citizen or your recipient is not a U.S. citizen, different rules may explore. Non-citizen spouses have a much lower annual exclusion ($18,000 in 2025, but it does not increase with inflation). Non-citizen recipients of large gifts may also face different reporting requirements.

How the annual exclusion works with married couples

If you are married, you and your spouse can each use your own $18,000 annual exclusion. This is called gift splitting. If you give $30,000 to your child, you can treat it as if you gave $15,000 and your spouse gave $15,000, keeping both of you under the limit.

To use gift splitting, you must file Form 709 even if neither of you exceeds the annual exclusion individually. Both spouses must consent to split the gift, and both must file the form (or one spouse files on behalf of both). This is one of the few situations where you file Form 709 even though you owe no tax and have not exceeded your lifetime exemption.

Gifts to minors and trusts

Gifts to minors count toward the annual exclusion the same way gifts to adults do. If you give $18,000 to your 10-year-old grandchild, that is within the limit. However, the money must be structured so the child has the right to use it. If you put $18,000 in a trust that the child cannot touch until age 25, the IRS may not treat it as a gift within the annual exclusion, and you could use part of your lifetime exemption instead.

The most common way to avoid this problem is to use a Uniform Transfers to Minors Act (UTMA) account or Uniform Gifts to Minors Act (UGMA) account, which are available in most states. These accounts let you give money to a minor while keeping it in a custodian's control until the child reaches a certain age. Gifts to these accounts count as gifts of present interest and fall within the annual exclusion.

Loans versus gifts

If you lend money to a family member, it is not a gift and does not count toward the annual exclusion — but only if it is a real loan. A real loan must have a written agreement, a stated interest rate, and a repayment schedule. The IRS publishes minimum interest rates each month; if you charge less than that rate, the difference may be treated as a gift.

If you lend $50,000 to your adult child with no paperwork and no expectation of repayment, the IRS will treat it as a gift. You will have to report it on Form 709 and it will use part of your lifetime exemption. To keep a loan from being reclassified as a gift, document it in writing and charge at least the IRS minimum rate, which changes monthly.

Frequently Asked Questions

Can I give $18,000 to multiple people without filing a return?

Yes. The $18,000 limit applies per person per year. You can give $18,000 to your daughter, $18,000 to your son, $18,000 to your grandchild, and $18,000 to a friend all in the same year, and none of it requires a gift tax return as long as you stay within $18,000 per recipient.

What if I give someone $18,000 and they give it back to me?

A gift that is returned is still a gift. If you give your sister $18,000 and she returns it three months later, you have made a taxable gift of $18,000. The return of the money does not erase the gift or let you reclaim the annual exclusion.

Do I have to report gifts under $18,000?

No. If you give $5,000 to your nephew, you do not file Form 709 or report it to the IRS. You only file Form 709 if you give more than $18,000 to one person in one calendar year, or if you and your spouse are splitting a gift.

Does paying someone's credit card bill count as a gift?

Yes, if you pay it directly to the credit card company on their behalf. If you give them cash and they pay the bill themselves, it is a gift of cash. Either way, it counts toward the $18,000 annual exclusion if the total gifts to that person exceed that amount in the year.

What happens to unused annual exclusion?

The annual exclusion does not roll over. If you give only $10,000 to your daughter in 2025, you cannot give her $26,000 in 2026 and stay under the limit. Each calendar year starts fresh with a new $18,000 per-person allowance.