The federal gift tax limit for 2024 is $18,000 per person per year

You can give up to $18,000 to any one person in a calendar year without triggering federal gift tax or filing requirements. This amount is called the annual exclusion. If you give more than $18,000 to a single person in one year, you must file a gift tax return — though you may not owe tax itself.

The $18,000 limit resets on January 1 each year. It applies to gifts of money, property, investments, or anything else of value. The person receiving the gift does not pay tax on it; the responsibility falls on the giver if the limit is exceeded.

If you are married, you and your spouse can each give $18,000 to the same person in the same year, for a combined $36,000, without either of you filing a return. This is called gift splitting.

Key Takeaways

  • The annual gift tax exclusion is $18,000 per recipient per year in 2024, and gifts within this limit require no tax filing.
  • Married couples can combine their exclusions to give $36,000 per person per year without filing, using gift splitting.
  • Gifts above the annual limit must be reported on a gift tax return, though you may not owe tax if you have not used your lifetime exemption.
  • Certain gifts — including tuition paid directly to a school and medical expenses paid directly to a provider — do not count toward the limit at all.
  • The annual exclusion amount changes most years based on inflation and is rounded to the nearest $1,000.

What happens if you give more than $18,000 to one person

If you give more than $18,000 to a single person in one calendar year, you must file Form 709 (United States Gift Tax Return) with the IRS, even if you do not owe tax. Filing is required by April 15 of the following year, the same important date as your income tax return.

Filing Form 709 does not automatically mean you owe gift tax. Instead, the excess amount counts against your lifetime exemption, which is $13.61 million in 2024. Once you file, the IRS tracks how much of your lifetime exemption you have used. You only owe tax if your total lifetime gifts exceed the exemption amount.

For most people, the lifetime exemption is so large that they will never owe gift tax, even if they give away more than $18,000 in a single year. However, filing Form 709 is still required to document the gift and protect yourself from IRS questions later.

Gifts that do not count toward the limit

Some gifts are completely exempt from the annual limit. The most common are tuition and medical expenses paid directly to the provider on someone else's behalf. If you pay a university directly for your grandchild's tuition, or pay a hospital directly for your parent's surgery, those payments do not count as gifts and do not use any of your $18,000 annual exclusion.

Gifts to your spouse (if your spouse is a U.S. citizen) are also unlimited and do not count toward the annual exclusion. Gifts to charities registered with the IRS as tax-exempt organizations are unlimited as well.

Gifts to political organizations and candidates are treated differently under campaign finance law, not gift tax law. Check with the Federal Election Commission if you are considering large political donations.

How the annual exclusion changes year to year

The IRS adjusts the annual exclusion amount most years based on inflation. In 2023, the limit was $17,000. In 2024, it rose to $18,000. The amount is always rounded to the nearest $1,000, so small inflation increases do not trigger a change every single year.

The IRS announces the new exclusion amount in late October or early November, and it takes effect on January 1. If you are planning large gifts, check the IRS website in the fall to confirm the current year's limit before year-end.

How gift splitting works for married couples

Gift splitting allows a married couple to treat a gift from one spouse as if it came equally from both spouses, even if only one spouse actually gave the money. This doubles the annual exclusion from $18,000 to $36,000 per recipient per year.

To use gift splitting, both spouses must consent to it, and you must file Form 709 to report the split — even if neither of you owes tax. You do not need your spouse's signature on the form itself, but you must indicate on the return that you are splitting gifts. If you file separately, your spouse must also file Form 709 to report their half of the split gift.

Gift splitting is useful when one spouse has significantly more money than the other, or when you want to make a large gift to a child or grandchild without using up both spouses' lifetime exemptions.

The lifetime exemption and when it matters

The lifetime exemption is a separate pool of money you can give away over your entire life without owing federal gift tax. In 2024, the lifetime exemption is $13.61 million. Every gift above the annual exclusion counts against this amount.

The lifetime exemption is scheduled to drop to roughly $7 million per person on January 1, 2026, unless Congress changes the law. This is a significant change, and people with substantial assets sometimes accelerate large gifts before the exemption shrinks.

For most people, the lifetime exemption is large enough that they will never use it up, even if they give away millions during their lifetime. However, if you are planning gifts of more than a few hundred thousand dollars, consult a tax professional about how your gifts will affect your lifetime exemption and your estate tax liability after you die.

State gift taxes and other considerations

The federal gift tax is separate from state gift taxes. Most states do not have a gift tax, but a few do — including Connecticut, Delaware, Illinois, Louisiana, Mississippi, New York, North Carolina, and Tennessee. State gift tax rules and limits vary, so check your state's tax authority website if you live in one of these states.

Gifts do not affect your income tax return or your standard deduction. Receiving a gift is not taxable income to the recipient, and you cannot deduct gifts you give on your income tax return (unless the gift is to a registered charity).

If you give someone a loan instead of a gift, different rules explore. The IRS requires that loans above a certain amount charge interest at a minimum rate, or the IRS will treat the unpaid interest as a gift. If you are considering lending money to a family member, consult a tax professional about the rules.

Frequently Asked Questions

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

No. Gifts within the annual exclusion do not require any filing or reporting to the IRS. You can give $18,000 to as many people as you want in a year without filing anything, as long as each person receives no more than $18,000 from you.

What if I give $20,000 to my child — do I owe tax?

You do not owe tax, but you must file Form 709 to report the $2,000 excess. The $2,000 counts against your $13.61 million lifetime exemption. Since your lifetime exemption is so large, you will likely never owe tax on this gift, but filing is still required.

Can my spouse and I each give $18,000 to the same person?

Yes. If you are married, you 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 gift splitting, and both spouses must consent to it.

Does paying my grandchild's college tuition count as a gift?

No, if you pay the tuition directly to the school. Tuition paid directly to an educational institution does not count toward the annual exclusion, no matter how much you pay. However, if you give your grandchild money and they pay the tuition themselves, that counts as a gift.

What is the difference between the annual exclusion and the lifetime exemption?

The annual exclusion is $18,000 per person per year and resets every January 1. The lifetime exemption is $13.61 million total over your entire life. Gifts above the annual exclusion count against your lifetime exemption, but most people never use up the lifetime exemption.