The federal gift tax threshold for 2024

You can give up to $18,000 per person per year without filing a gift tax return with the IRS. This amount is called the annual exclusion. If you give more than $18,000 to any single person in a calendar year, you must file Form 709 (Gift Tax Return) with your tax return, even if you do not owe tax.

The $18,000 figure changes each year. 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 see the current year's amount, because it may have risen again.

This threshold applies to gifts of money, property, investments, or anything else of value. It does not matter whether the recipient is a family member, a friend, or a stranger. The rule is per recipient, not per giver — you can give $18,000 to your daughter and $18,000 to your son in the same year without triggering the return requirement.

Key Takeaways

  • You can give $18,000 per person per year (in 2024) without filing a gift tax return, and this amount increases with inflation each year.
  • Married couples can combine their exclusions, allowing them to give $36,000 per person per year without filing.
  • Gifts to spouses who are U.S. citizens and gifts that pay tuition or medical bills directly to providers do not count toward the annual limit.
  • Filing Form 709 when you exceed the limit does not mean you owe tax — it only becomes tax if you exceed your lifetime exemption of $13.61 million (in 2024).
  • The lifetime exemption shrinks to roughly $7 million per person on January 1, 2026, unless Congress changes the law.

How married couples can double their giving

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 either of you filing a return. This is called gift splitting. You do not need your spouse's permission to split gifts — the IRS allows it automatically for married couples filing jointly.

Gift splitting works even if only one spouse earned the money or owns the property being given. If you give your daughter $36,000 from your own account, you and your spouse can treat it as if you each gave $18,000. You do not file anything unless you exceed $36,000 to that person in that year.

Gifts that do not count toward the limit

Some gifts are exempt from the annual exclusion entirely. Gifts to a spouse who is a U.S. citizen have no limit — you can give your spouse any amount without filing a return or using any of your lifetime exemption. If your spouse is not a U.S. citizen, the annual exclusion is higher ($185,000 in 2024) but still limited.

Payments made directly to a school for tuition do not count as gifts, even if you pay for someone else's education. The same applies to payments made directly to a medical provider for someone else's medical bills. You can pay unlimited tuition and medical expenses without triggering the gift tax, as long as you pay the provider directly, not the person receiving the education or care.

Gifts to registered charities also do not count toward the limit. You can give any amount to a may have access to charity and receive a charitable deduction on your tax return.

What happens when you exceed the annual limit

If you give more than $18,000 to one person in a year, you must file Form 709 with your tax return. Filing the form does not mean you owe gift tax. Instead, the excess amount counts against your lifetime exemption.

The lifetime exemption is the total amount you can give away (beyond the annual exclusion) before owing federal gift tax. In 2024, the lifetime exemption is $13.61 million per person. If you give $25,000 to your daughter in one year, you file Form 709, and $7,000 of that gift uses up $7,000 of your $13.61 million exemption. You still owe no tax.

You only owe gift tax if the total of all your gifts (minus the annual exclusions and special exemptions) exceeds your lifetime exemption. For most people, this never happens. The lifetime exemption is so large that only wealthy individuals with substantial estates typically encounter gift tax.

The lifetime exemption shrinks in 2026

The current lifetime exemption of $13.61 million is set to expire on December 31, 2025. On January 1, 2026, unless Congress passes new legislation, the exemption will drop to roughly $7 million per person (adjusted for inflation). This change is built into current tax law and is not a proposal — it is scheduled to happen automatically.

If you plan to give away large amounts, the timing matters. Some people with substantial wealth choose to make large gifts before 2026 to use the higher exemption while it is still in effect. This is a decision to discuss with a tax professional or estate attorney, not something you need to act on when ready.

The annual exclusion ($18,000 in 2024) is not affected by the 2026 change. It will continue to adjust for inflation each year, regardless of what happens to the lifetime exemption.

State gift taxes and other considerations

The federal government is not the only body that taxes gifts. A few states — Connecticut, Delaware, Illinois, Louisiana, Mississippi, North Carolina, and Tennessee — have their own gift taxes or inheritance taxes. If you live in one of these states, you may owe state tax on gifts even if you do not owe federal tax. Check your state's tax authority website for the rules in your state.

Most states have no gift tax. If you live in a state without a gift tax and give to someone in another state, you generally do not owe that state's tax. The tax depends on where you live, not where the recipient lives.

When to file Form 709 and what to keep

You file Form 709 with your federal tax return for the year in which you made the gift. If you made gifts over $18,000 to one person in 2024, you file the form with your 2024 tax return (due April 15, 2025). You can file electronically or on paper, depending on how you file your main return.

Keep records of any large gifts: the date, the amount, who received it, and what it was (money, property, investments, etc.). If you give property instead of cash, you may need to document its fair market value on the date of the gift. These records help if the IRS ever questions your return, and they are also useful for your own estate planning.

Frequently Asked Questions

Do I owe gift tax if I give my child $25,000 in one year?

No. You file Form 709 to report the gift, and $7,000 of it counts against your lifetime exemption of $13.61 million (in 2024). You owe no tax unless your total lifetime gifts exceed $13.61 million. For most people, this never happens.

Can I split a gift with my spouse if we are not filing taxes jointly?

No. Gift splitting is only available to married couples who file a joint tax return. If you file separately, each spouse has their own $18,000 annual exclusion, but you cannot combine them for a single gift.

If I pay my grandchild's college tuition directly to the school, does it count toward the gift limit?

No. Tuition paid directly to an educational institution does not count as a gift and does not use any of your annual exclusion or lifetime exemption. You can pay unlimited tuition this way. If you give your grandchild money and they pay the tuition themselves, that counts as a regular gift.

What if I give someone a gift and they give me money back — does that cancel out?

No. The IRS looks at each transaction separately. If you give $20,000 and receive $5,000 back, you have made a $20,000 gift (which requires filing Form 709) and received a $5,000 gift. The transactions do not offset each other.

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

No. Gifts under the annual exclusion do not require any filing or reporting. You can give $18,000 or less to as many people as you want in a year without filing anything with the IRS.