The 2024 annual gift tax exclusion is $18,000 per person

You can give up to $18,000 to any one person in 2024 without filing a gift tax return or reducing your lifetime exemption. This amount is called the annual exclusion. The IRS sets it each year, and it changes when inflation crosses certain thresholds. In 2024, it rose from $17,000 in 2023.

If you give more than $18,000 to one person in a single year, you must file Form 709 (the gift tax return) with the IRS. Filing does not mean you owe tax — it means you are using part of your lifetime exemption, which is separate from the annual exclusion. Most people never owe gift tax because the lifetime exemption is very large ($13.61 million in 2024), but you must report gifts over the annual limit.

Married couples can combine their exclusions. If you are married and file jointly, you and your spouse together can give $36,000 to one person per year without filing. Each spouse has their own $18,000 exclusion.

Key Takeaways

  • You can give $18,000 per person per year in 2024 without filing a gift tax return or using your lifetime exemption.
  • Married couples can give $36,000 combined to one person per year without filing.
  • Gifts over $18,000 to one person require you to file Form 709, but most people do not owe tax because the lifetime exemption is $13.61 million.
  • Certain gifts do not count toward the limit: direct payments to schools or medical providers, gifts to spouses, and gifts to charities.
  • The annual exclusion amount changes each year with inflation and is set by the IRS in October.

Gifts that do not count toward the $18,000 limit

Some gifts are completely excluded from the annual limit. If you pay a doctor, hospital, or school directly on someone else's behalf, that payment does not count as a gift to that person, no matter how much it is. You must pay the provider directly — if you give the person money and they pay the bill, it counts as a gift.

Gifts to your spouse do not count toward the limit if your spouse is a U.S. citizen. There is no annual cap on spousal gifts. Gifts to charities also do not count, as long as the charity is registered with the IRS as a may have access to organization.

Political contributions to candidates and committees have their own rules and are not subject to gift tax, though they may be subject to campaign finance limits that vary by state and election type.

What happens if you give more than $18,000 in one year

You must file Form 709 with your tax return. The form reports the excess gift to the IRS. You do not pay tax at that time — instead, the excess reduces your lifetime exemption dollar-for-dollar.

For example, if you give $25,000 to your adult child in 2024, you use $18,000 of the annual exclusion and $7,000 of your lifetime exemption. Your lifetime exemption drops from $13.61 million to $13.603 million. You file Form 709 to report this, but you owe no tax.

The lifetime exemption is so large that most people never exhaust it. Gift tax becomes a real cost only if your total lifetime gifts (plus your estate at death) exceed the exemption amount. In 2024, that threshold is $13.61 million for individuals and $27.22 million for married couples.

How the annual exclusion changes each year

The IRS adjusts the annual exclusion in $1,000 increments when inflation warrants it. The adjustment is announced in October and takes effect January 1 of the following year. In recent years, the exclusion has been $16,000 (2022), $17,000 (2023), and $18,000 (2024).

You do not need to track these changes yourself — tax software and tax preparers know the current year's amount. But if you give large gifts regularly, it is worth checking the IRS website in October to see whether the exclusion has risen.

Gifts to minors and trusts

Gifts to minors count toward the annual exclusion the same way gifts to adults do. You can give $18,000 to your grandchild, niece, or any minor without filing. The money can go into a custodial account, a 529 education savings plan, or directly to a parent who holds it for the child.

Gifts to a trust are treated differently and may not may have access to for the annual exclusion at all, depending on how the trust is written. If the trust is set up so the beneficiary has the right to withdraw the gift immediately (called a Crummey power), the gift may may have access to for the exclusion. If not, the entire gift uses your lifetime exemption. This is a technical area — if you are considering large gifts to trusts, consult a tax professional or estate attorney.

Gifts of property, investments, and real estate

The $18,000 limit applies to gifts of money, stocks, real estate, vehicles, and any other property. The value is measured on the date you give it. If you give 100 shares of stock worth $180 per share, that is an $18,000 gift.

For real estate and other hard-to-value property, you may need a professional appraisal to determine the gift's value. The IRS can challenge your valuation if it seems too low, so keep documentation of how you arrived at the amount.

Forgiving a loan is treated as a gift of the remaining balance. If you lend your adult child $50,000 and later forgive $20,000 of it, the forgiven amount is a gift. You can forgive up to $18,000 per year without filing.

State gift taxes and other considerations

The federal gift tax is the only gift tax most people encounter. However, a few states have their own gift taxes: Connecticut, Delaware, Louisiana, North Carolina, and Tennessee. If you live in one of these states, check your state tax agency's website for rules that may be stricter than federal law.

Gift tax is separate from income tax. Giving money to someone does not create income for them, so they do not owe income tax on the gift. However, if the gift generates income later (such as interest on a savings account or dividends on stock), that income is taxable to whoever receives it.

Frequently Asked Questions

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

Yes. The $18,000 limit is per person per year. You can give $18,000 to your child, $18,000 to your grandchild, $18,000 to your friend, and so on, all in the same year, without filing. Only gifts to the same person over $18,000 in one year require Form 709.

If I give someone $20,000, do I owe tax on the extra $2,000?

No. You file Form 709 to report the $2,000 overage, and it reduces your lifetime exemption by $2,000. You owe no tax unless your total lifetime gifts exceed $13.61 million. Most people never reach that threshold.

Does my spouse's gift to someone count toward my $18,000 limit?

No. Each person has their own $18,000 annual exclusion. If you and your spouse each give $18,000 to your adult child in the same year, that is $36,000 total and requires no filing. Each of you stays within your own limit.

What if I give someone money and they use it to pay for school?

If you give the person money, it counts as a gift subject to the $18,000 limit, even if they spend it on tuition. If you pay the school directly, it does not count as a gift at all. The distinction is who receives the payment — the person or the provider.

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

No. Gifts under $18,000 to one person in one year require no filing and no reporting. You only file Form 709 when a gift to one person exceeds $18,000 in a single calendar year.