The federal gift tax annual exclusion 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 filing a gift tax return or reducing your lifetime exemption. This limit applies to each recipient separately — you can give $18,000 to your child, $18,000 to your spouse, $18,000 to a friend, and so on, all in the same year, and none of it counts as a taxable gift.

The $18,000 figure changes most years. The IRS adjusts it for inflation in $1,000 increments, so it may be different in 2025 and beyond. Check the IRS website or ask a tax professional for the current year's limit before you give large amounts.

Married couples can combine their exclusions. If you are married and file jointly, you and your spouse together can give $36,000 per recipient per year without triggering tax consequences. This is called "gift splitting" and requires both spouses to agree, but you do not need to file anything special to use it — you simply each give up to your own $18,000 limit.

Key Takeaways

  • You can give $18,000 per person per year (in 2024) without filing a gift tax return or owing tax, and this limit resets on January 1 each year.
  • Married couples can give $36,000 per recipient per year by combining both spouses' annual exclusions.
  • Gifts above the annual limit do not automatically trigger tax — they reduce your lifetime exemption of $13.61 million (in 2024), which most people never reach.
  • Certain gifts are never taxable: tuition paid directly to a school, medical expenses paid directly to a provider, gifts to your spouse, and gifts to charities.
  • The annual exclusion and lifetime exemption amounts change yearly for inflation, so verify the current limits before making large gifts.

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

If you give more than $18,000 to a single person in one calendar year, you must file Form 709 (the gift tax return) with the IRS. Filing the form does not mean you owe tax — it means you are reporting the excess amount against your lifetime exemption.

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 per person. If you give $25,000 to your child in one year, you file Form 709 to report the $7,000 overage, and that $7,000 reduces your lifetime exemption from $13.61 million to $13.603 million. You still owe no tax.

Most people never reach their lifetime exemption. You would have to give away millions of dollars over many years to trigger actual gift tax. The lifetime exemption is also scheduled to drop significantly after 2025 — it will fall to roughly $7 million per person unless Congress changes the law — so the rules may shift.

Gifts that do not count toward the annual limit

Some gifts are never taxable and do not count against your $18,000 annual exclusion. These are called unlimited exclusions. The most common ones are:

  • Tuition and medical expenses: If you pay a school or medical provider directly on someone else's behalf, that payment is not a taxable gift, no matter the amount. You cannot pay the person the money and have them pay the school — it must go directly from you to the institution.
  • Gifts to your spouse: If your spouse is a U.S. citizen, you can give them any amount with no tax consequences. If your spouse is not a U.S. citizen, the annual exclusion is higher ($185,000 in 2024) but still limited.
  • Gifts to charities: Donations to may have access to charitable organizations are not taxable gifts and may be tax-deductible on your income tax return.
  • Gifts that are not "gifts" for tax purposes: Payments for someone's living expenses (rent, utilities, groceries) made directly to the provider or landlord are generally not treated as gifts if they are part of your normal support obligation.

The tuition and medical expense rule is the most useful for families. If you want to help a grandchild with college, you can pay the university directly without using any of your annual exclusion. If you want to help a parent with a surgery, you can pay the hospital directly. The key is that the money goes to the institution, not to the person.

How the annual exclusion resets each January

The $18,000 limit is per calendar year. If you give $18,000 to your child on December 15, you can give that same child another $18,000 on January 2 of the next year, and neither gift is taxable. The clock resets on January 1.

This matters if you are planning large gifts. Some people time gifts to split them across two calendar years to stay under the annual limit and avoid filing Form 709. For example, if you want to give your child $30,000, you could give $18,000 in December and $12,000 in January, staying within the annual exclusion both years.

The annual exclusion applies separately to each recipient. You do not have a single $18,000 pool to divide among all your children. You have $18,000 per child per year.

State gift taxes and how they differ from federal tax

The federal government is not the only body that can tax gifts. A handful of states also have their own gift tax: Connecticut, Delaware, Louisiana, Mississippi, North Carolina, and Tennessee. State gift tax rules vary widely and are separate from federal rules.

If you live in one of these states or are giving to someone who does, check your state's tax agency website or speak with a tax professional about state-level limits. Some states have lower annual exclusions or lower lifetime exemptions than the federal government, which means you could owe state tax even if you do not owe federal tax.

Most states do not have a gift tax at all. If you live in a state without one, you only need to worry about federal rules.

Frequently Asked Questions

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

No. Gifts under the annual exclusion do not require you to file Form 709 or report them to the IRS. You only file if you give more than $18,000 to one person in one year. Keep records of large gifts for your own records, but reporting is not required below the limit.

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

Yes. The $18,000 limit is per recipient per year. You can give $18,000 to your child, $18,000 to your grandchild, $18,000 to your sibling, and $18,000 to a friend all in the same year without filing anything. Each person gets their own $18,000 exclusion.

What if I give someone money and they use it to pay my mortgage?

That is still a gift. The IRS cares about the direction of the money, not what the recipient does with it afterward. If you give someone $20,000 and they use it to pay down your mortgage, you have made a $20,000 gift and must file Form 709 to report the $2,000 overage. The fact that they spent it on your behalf does not change the tax treatment.

Does a gift of stock or property count the same way as cash?

Yes. The annual exclusion applies to gifts of any kind — cash, stock, real estate, vehicles, artwork. The value of the gift is what matters. If you give someone stock worth $25,000, that is a $25,000 gift, and you must file Form 709 to report the $7,000 overage. Use the fair market value on the date you give it.

If I file Form 709, do I automatically owe tax?

No. Filing Form 709 simply reports the gift to the IRS and reduces your lifetime exemption. Unless you have already used up your $13.61 million lifetime exemption (which almost no one has), you will not owe any tax. Form 709 is a reporting form, not a tax bill.