The federal gift tax annual exclusion for 2024
You can give up to $18,000 per person per year without filing a gift tax return with the IRS. This is the annual exclusion amount for 2024. If you give more than this to any one person in a single year, you must file Form 709 (United States Gift Tax Return) with the IRS, even if you owe no tax.
The annual exclusion amount changes most years. The IRS adjusts it for inflation in $1,000 increments. In 2023 it was $17,000. In 2025 it will likely be $18,000 or $19,000, depending on inflation data released in October 2024. You can check the IRS website or call 1-800-829-1040 to confirm the current year's amount before you give a large gift.
This exclusion applies to gifts of cash, property, investments, or anything else of value. It does not matter whether the recipient is a family member, friend, or stranger. Each person you give to has their own separate $18,000 limit.
Key Takeaways
- You can give $18,000 per person per year in 2024 without filing a gift tax return, and this amount changes annually for inflation.
- If you give more than the annual exclusion to one person in one year, you must file Form 709 even if you owe no tax.
- Married couples can give $36,000 per person per year by combining their exclusions, and each spouse files their own Form 709 if needed.
- Gifts to spouses who are U.S. citizens have no limit at all, and gifts to charity are never subject to gift tax.
- Amounts over the annual exclusion reduce your lifetime gift and estate tax exemption, which is currently $13.61 million per person.
How married couples can give more
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 per person. This is called gift splitting. You do not need your spouse's permission to count their exclusion—you straightforward both file Form 709 if either of you gave more than your individual exclusion.
Gift splitting requires that you are married on December 31 of the year you make the gift. If you divorce or your spouse dies before that date, you cannot use gift splitting for gifts made that year. You must both agree to split gifts; if one spouse refuses, you can only use your own $18,000 exclusion.
Gifts that do not count against your limit
Certain gifts are never subject to the annual exclusion or gift tax. Gifts to your spouse (if your spouse is a U.S. citizen) have no dollar limit. You can give your spouse any amount of money or property without filing a return or using any of your lifetime exemption.
Gifts to charity are also unlimited. If you donate to a may have access to charitable organization, that donation does not count toward your annual exclusion and does not trigger a gift tax return. You may be able to deduct the donation on your income tax return instead.
Tuition and medical payments paid directly to the school or medical provider do not count as gifts at all. If you pay a grandchild's college tuition directly to the university, or pay a family member's hospital bill directly to the hospital, those payments are not subject to gift tax and do not use your annual exclusion. The payment must go directly to the provider, not to the person receiving the education or care.
What happens when you exceed the annual exclusion
If you give more than $18,000 to one person in one year, you must file Form 709 with the IRS. Filing the form does not mean you owe gift tax when ready. Instead, the excess amount reduces your lifetime gift and estate tax exemption.
For 2024, your lifetime exemption is $13.61 million per person. This means you can give away (or leave in your will) up to $13.61 million total during your lifetime and at death before owing any federal gift or estate tax. Every dollar you give over the annual exclusion in a single year counts against this $13.61 million pool. Once you use up your lifetime exemption, gifts over the annual exclusion are taxed at 40 percent.
The lifetime exemption is temporary. It is scheduled to drop to roughly $7 million per person (adjusted for inflation) on January 1, 2026, unless Congress changes the law. This means that large gifts made now may have different tax consequences later, depending on what happens in Congress.
When you must file Form 709
You file Form 709 with your federal income tax return. If you do not normally file an income tax return, you still must file Form 709 if you gave more than the annual exclusion to any one person. The important date is April 15 of the year after you made the gift, the same as your income tax important date. You can request an extension to October 15 if you need more time.
Form 709 has multiple pages. You list each person you gave gifts to, the date of each gift, the value of each gift, and whether you and your spouse are splitting the gift. You calculate how much of your lifetime exemption you used. If you owe no tax (because you still have lifetime exemption remaining), you still file the form—it is a record that you used part of your exemption.
Many people file Form 709 even when they are not required to, straightforward to document large gifts and protect themselves if the IRS later questions the value of a gift. This is especially common when gifts are of property, artwork, or business interests where value is hard to prove.
Gifts to non-citizen spouses
If your spouse is not a U.S. citizen, the rules are different. You can give your non-citizen spouse up to $185,000 per year (in 2024) without filing a gift tax return. This amount is much higher than the standard annual exclusion but still has a limit, unlike gifts to a U.S. citizen spouse. The $185,000 limit also changes annually for inflation.
If you give more than $185,000 to a non-citizen spouse in one year, you must file Form 709. The excess counts against your lifetime exemption, just as it would for any other person.
State gift taxes
A few states have their own gift tax in addition to the federal gift tax. Connecticut, Delaware, Louisiana, North Carolina, and Tennessee have state-level gift taxes with their own rules and exclusion amounts. If you live in one of these states, you may owe state gift tax even if you owe no federal gift tax.
Most states do not have a gift tax. If you live in a state without a gift tax, you only need to worry about the federal rules described above. You can check your state's tax agency website to confirm whether your state taxes gifts.
Frequently Asked Questions
Do I have to report gifts under $18,000?
No. Gifts under the annual exclusion do not require a Form 709 filing. You can give $18,000 or less to as many people as you want without reporting anything to the IRS. Keep your own records of large gifts in case questions arise later.
What if I give someone $20,000 in one year?
You must file Form 709 because you exceeded the $18,000 annual exclusion by $2,000. The $2,000 excess counts against your $13.61 million lifetime exemption. You owe no tax unless and until you use up your entire lifetime exemption, but you must file the form to document the excess.
Can I give $9,000 twice in one year to avoid reporting?
No. The annual exclusion is per person per calendar year, not per transaction. If you give the same person $9,000 in January and $9,000 in December, that is $18,000 total for the year and does not require a return. If you give them $9,000 in January and $9,500 in December, that is $18,500 total and you must file Form 709 for the $500 excess.
Does a gift count as income to the person who receives it?
No. The person who receives a gift does not report it as income on their tax return. Gift tax is paid by the giver, not the receiver. The receiver has no tax obligation related to receiving a gift, regardless of the amount.
What if I give a gift and the person gives me money back later?
If the money is truly a loan, document it in writing with a promissory note that includes a repayment schedule and interest rate. Without written documentation, the IRS may treat the entire transaction as a gift. If it is a gift and the person later gives you money for an unrelated reason, those are two separate transactions and do not cancel each other out.