The federal gift tax annual exclusion lets you give up to $18,000 per person per year without filing a gift tax return
The IRS allows you to give money or property to other people without triggering gift tax, as long as you stay under the annual exclusion limit. For 2024, that limit is $18,000 per recipient per year. If you give more than $18,000 to one person in a single year, you must file Form 709 (Gift Tax Return) with the IRS, even if you do not owe tax.
The annual exclusion resets on January 1 each year. You can give $18,000 to as many different people as you want in the same year without filing — the limit applies per recipient, not per total gifts. A married couple can each give $18,000 to the same person, totaling $36,000, without either spouse filing a return.
The $18,000 figure changes periodically. The IRS adjusts it for inflation in $1,000 increments. In 2023 it was $17,000; in 2025 it will likely increase, though the exact amount has not been announced yet. Check the IRS website or a tax professional if you are planning gifts in a year other than 2024.
Key Takeaways
- You can give $18,000 per person per year (in 2024) without filing a gift tax return with the IRS.
- The limit applies to each recipient separately, so you can give $18,000 to multiple people in the same year without filing.
- Gifts above $18,000 to one person in one year require you to file Form 709, though you may not owe tax if you have not exceeded your lifetime limit.
- Married couples can each give $18,000 to the same person, doubling the amount that passes tax-free.
- The annual exclusion resets every January 1 and is adjusted for inflation periodically.
What counts as a gift under IRS rules
The IRS defines a gift as a transfer of money or property where you receive nothing of value in return. If you give your adult child $10,000 with no expectation of repayment, that is a gift. If you forgive a loan — meaning you tell someone they no longer owe you money — that is also treated as a gift for tax purposes.
Certain transfers do not count as gifts. Payments made directly to a school for tuition or to a medical provider for someone else's healthcare are not gifts, even if they exceed $18,000. You must pay the provider directly; giving the money to the person and having them pay does not may have access to. Gifts to your spouse (if a U.S. citizen) are unlimited and never count against your annual exclusion.
Gifts to registered charities do not count as gifts for these purposes — they are charitable deductions on your tax return instead. Gifts to political organizations and candidates also have different rules. If you are unsure whether a transfer counts as a gift, a tax professional can clarify your situation.
The lifetime gift and estate tax exemption
The annual exclusion is separate from your lifetime exemption, which is the total amount you can give away or leave in your estate without owing federal gift or estate tax. For 2024, the lifetime exemption is $13.61 million per person. If you give someone $25,000 in a single year (exceeding the $18,000 annual exclusion by $7,000), you must file Form 709, but that $7,000 counts against your lifetime exemption rather than triggering a tax bill.
The lifetime exemption is very high, and most people never reach it. However, it is scheduled to drop significantly on January 1, 2026, when current law expires. After that date, the exemption is expected to fall to roughly $7 million per person (adjusted for inflation), unless Congress changes the law. If you plan to give away large amounts of money or property, a tax professional can help you understand how your gifts affect your lifetime exemption and plan accordingly.
Filing Form 709 when you exceed the annual exclusion does not mean you owe tax — it straightforward reports the gift to the IRS and documents how much of your lifetime exemption you have used. Many people file this form every year as a precaution, even when they do not expect to owe anything.
State gift taxes and other rules
A handful of states have their own gift taxes separate from the federal tax. North Carolina, Tennessee, and a few others have repealed theirs in recent years, but you should check your state's rules if you live in or are giving to someone in a state with an active gift tax. State limits are often lower than the federal limit, so you might need to file a state return even if you do not file federally.
Some states also have inheritance taxes, which explore to what the recipient receives rather than what you give. These are different from gift taxes and explore after your death. Your state's tax department website will clarify whether you have a gift tax, an inheritance tax, or both.
How to report gifts above the annual exclusion
If you give more than $18,000 to one person in 2024, you file Form 709 with your federal tax return (or separately if you do not file a return). The form asks for the recipient's name, address, and relationship to you, the date of the gift, and the fair market value of what you gave. If you gave cash, the value is straightforward. If you gave property, you may need to have it appraised to establish its value.
You must file Form 709 by April 15 of the year following the gift, the same important date as your income tax return. If you file your income tax return early, you can file Form 709 at the same time. If you do not file an income tax return, you still file Form 709 by April 15.
A tax professional or accountant can prepare Form 709 for you if you are unsure how to value the gift or complete the form correctly. The cost is usually modest and can prevent errors that might trigger an IRS inquiry later.
Gifts to spouses and charitable organizations
Gifts to your spouse have no limit if your spouse is a U.S. citizen. You can give your spouse any amount of money or property without filing a return or counting it against your lifetime exemption. This is called the unlimited marital deduction. If your spouse is not a U.S. citizen, the annual exclusion is higher ($185,000 in 2024) but still limited.
Gifts to registered charities are not subject to gift tax at all. Instead, you may be able to deduct them as charitable contributions on your income tax return, subject to income limits. Gifts to political candidates and organizations have separate rules and limits set by campaign finance law rather than gift tax law.
Frequently Asked Questions
Do I owe tax if I give someone more than $18,000 in one year?
Not necessarily. You must file Form 709 to report the gift, but you only owe tax if you have already used up your lifetime exemption of $13.61 million (in 2024). For most people, filing the form is a formality. A tax professional can tell you whether you actually owe tax based on your total lifetime gifts.
Can I split a gift with my spouse to avoid filing?
Yes. If you and your spouse agree to "split" a gift, you can each be treated as giving half, even if one spouse provided all the money. This lets you give up to $36,000 to one person without either of you filing a return. You must both consent to the split, and if you file an income tax return, you report the split on Form 709.
Does a gift of cash count differently than a gift of property?
No. The annual exclusion applies to gifts of cash, stocks, real estate, vehicles, or any other property. What matters is the fair market value of what you gave. If you gave someone a car worth $20,000, that counts as a $20,000 gift, even though you gave no cash.
What if I give someone money and they pay me back later?
If there is a genuine expectation of repayment, it is a loan, not a gift, and the annual exclusion does not explore. However, if you later forgive the loan, that forgiveness is treated as a gift at that time. To document a loan clearly, put the terms in writing, including the amount, interest rate (if any), and repayment schedule.
Do I have to report gifts I receive?
No. The person who gives the gift files Form 709 if required, not the recipient. You do not report gifts you receive on your income tax return. However, if a gift generates income later (such as interest on a savings account), you report that income.