The 2024 annual exclusion amount is $18,000 per person

You can give up to $18,000 to as many people as you want in 2024 without filing a gift tax return or using any of your lifetime exemption. This is the annual exclusion. The IRS sets this number each year, and it rose from $17,000 in 2023.

The exclusion applies per giver and per receiver. If you are married and your spouse also gives, each of you has your own $18,000 limit. If you give $18,000 to your daughter and $18,000 to your son, both gifts are covered. If you give $20,000 to one person, only $18,000 is excluded — the extra $2,000 counts against your lifetime limit.

The exclusion covers 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 charity. Tuition paid directly to a school and medical bills paid directly to a provider do not count as gifts and are not limited, even if they exceed $18,000.

Key Takeaways

  • You can give $18,000 per person per year in 2024 without filing a gift tax return or reducing your lifetime exemption.
  • If you are married, you and your spouse each have a separate $18,000 limit, so you can give $36,000 to one person together.
  • Gifts over $18,000 to one person require you to file Form 709 and count against your $13.61 million lifetime exemption.
  • Tuition and medical bills paid directly to the provider are not counted as gifts, no matter the amount.
  • The annual exclusion amount changes each year based on inflation and is announced by the IRS in October.

Your lifetime exemption and how gifts over $18,000 affect it

If you give more than $18,000 to one person in a year, the amount over $18,000 uses your lifetime exemption. In 2024, your lifetime exemption is $13.61 million. This is the total amount you can give away over your lifetime without owing federal gift tax.

When you exceed the annual exclusion, you must file Form 709 (Gift Tax Return) with the IRS, even if you do not owe tax. The form tells the IRS how much of your lifetime exemption you have used. For example, if you give $25,000 to your niece, you file Form 709 to report the $7,000 overage. That $7,000 reduces your lifetime exemption from $13.61 million to $13.603 million.

You do not pay tax on the overage unless you have already used up your entire lifetime exemption. Most people never reach $13.61 million in lifetime gifts, so they never owe gift tax. But the IRS tracks every dollar you report on Form 709.

Married couples and the gift-splitting election

If you are married, you and your spouse can combine your annual exclusions through gift splitting. This means you can give $36,000 to one person ($18,000 from each of you) without either of you filing a return. You do not need your spouse's permission — you can split gifts even if your spouse does not know about them.

To use gift splitting, you must be married on December 31 of the year you make the gift. If you divorce later that year, you cannot split gifts made before the divorce. If you remarry, your new spouse can split gifts made after the marriage, but not before.

Gift splitting is automatic if you file a joint tax return. If you file separately, you must both file Form 709 and elect to split gifts on both returns. If you are not married, you cannot split gifts — each person has only their own $18,000 limit.

What counts as a gift and what does not

A gift is any transfer of money or property where you receive nothing of equal value in return. If you lend money to a family member with a written promissory note and a real interest rate, it is a loan, not a gift. If you forgive the loan later, the forgiven amount becomes a gift at that time.

Payments for tuition go directly to the school and are not limited by gift tax, even if you pay $100,000 or more. The same rule applies to medical bills paid directly to the provider. These are not considered gifts because they are payments for services, not transfers to the person receiving the service.

Gifts to your spouse are not limited at all if your spouse is a U.S. citizen. You can give your spouse any amount without filing a return or using your lifetime exemption. If your spouse is not a U.S. citizen, the annual exclusion is $18,000 in 2024, but the lifetime exemption for non-citizen spouses is much lower.

Gifts to charities are not limited and do not use your annual exclusion. You can give any amount to a may have access to charity. However, you must have a receipt or written acknowledgment from the charity, and the charity must be registered with the IRS.

When you must file Form 709

You must file Form 709 if you give more than $18,000 to one person in a calendar year, even if you do not owe tax. You must also file if you split gifts with your spouse and file a separate return instead of jointly. File Form 709 with your federal income tax return by April 15 of the following year, or by October 15 if you file an extension.

If you give exactly $18,000 or less to each person and you are not splitting gifts, you do not file Form 709. If you give tuition or medical bills directly to the provider, you do not file Form 709 for those payments, even if they exceed $18,000.

Late filing of Form 709 can result in penalties and interest. The IRS may also assess tax on gifts you did not report. If you made gifts in prior years and did not file, you can still file Form 709 for those years, though penalties may explore.

How the lifetime exemption changes after 2025

The lifetime exemption of $13.61 million in 2024 is set to drop significantly after December 31, 2025. Under current law, the exemption will fall to approximately $7 million per person (adjusted for inflation) on January 1, 2026. This is a major change that affects anyone planning large gifts.

If you are considering gifts over the annual exclusion, the timing matters. Some people give large amounts before the exemption drops to lock in the higher limit. However, this strategy only makes sense if you have substantial assets and plan to give away more than $7 million in your lifetime.

The annual exclusion of $18,000 is separate from the lifetime exemption and is not scheduled to change after 2025. It will continue to adjust each year for inflation.

Frequently Asked Questions

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

Yes. The $18,000 annual exclusion applies to each person you give to. You can give $18,000 to your daughter, $18,000 to your son, $18,000 to your friend, and $18,000 to your niece — all in the same year — without filing Form 709 or using your lifetime exemption.

What happens if I give someone $20,000 in 2024?

The first $18,000 is covered by your annual exclusion. The extra $2,000 counts against your $13.61 million lifetime exemption. You must file Form 709 to report the $2,000 overage, but you do not owe tax unless you have already used up your entire lifetime exemption.

If my spouse and I give $36,000 together, do we both have to file Form 709?

No. If you file a joint tax return, gift splitting is automatic and you do not file Form 709. If you file separate returns, you must both file Form 709 and elect to split gifts on both returns.

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

No, if you pay the tuition directly to the school. Tuition paid directly to an educational institution is not a gift and is not limited by the annual exclusion or lifetime exemption, no matter the amount. If you give your child money and they pay the tuition, that is a gift and counts toward the $18,000 limit.

Can I give my non-citizen spouse more than $18,000?

You can give your non-citizen spouse $18,000 per year without filing a return. Amounts over $18,000 count against a separate lifetime exemption for non-citizen spouses, which is much lower than $13.61 million. Consult a tax professional if you plan to give a non-citizen spouse large amounts.