The federal gift tax threshold 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. If you give more than $18,000 to one person in a single year, you must file Form 709 with the IRS, even if you do not owe tax.

The $18,000 limit applies to each person you give to separately. If you give $18,000 to your daughter and $18,000 to your son in the same year, neither triggers a return. If you give $25,000 to your daughter, you must file a return for the $7,000 over the limit.

This threshold changes most years. The IRS adjusts it for inflation in $1,000 increments. In 2023 it was $17,000; in 2024 it is $18,000. Check the IRS website or a tax professional for the current year's amount before you give large sums.

Key Takeaways

  • You can give $18,000 per person per year in 2024 without filing a gift tax return, and this limit resets on January 1 each year.
  • Married couples can give $36,000 per person per year if both spouses agree to split the gift, even if only one spouse provided the money.
  • Gifts above the annual limit do not trigger a tax bill immediately; instead, they reduce your lifetime exemption of $13.61 million (2024).
  • Certain gifts are never counted against any limit: tuition paid directly to a school, medical expenses paid directly to a provider, and gifts to your spouse.
  • You must file Form 709 if you give more than the annual limit to any one person, even if you owe no tax.

How the lifetime exemption works

If you give more than $18,000 to one person in a year, the overage does not create a tax bill. Instead, it uses up part of your lifetime gift and estate tax exemption. In 2024, this exemption is $13.61 million per person.

Think of it as a bucket. You have $13.61 million to give away over your lifetime without owing federal gift or estate tax. Every dollar you give above $18,000 in a single year to one person draws from that bucket. When the bucket is empty, any further gifts above $18,000 per person per year are taxed at 40 percent.

For most people, this exemption is so large that they will never use it all. You would have to give away hundreds of thousands of dollars over many years to approach the limit. The exemption also resets — it is scheduled to drop to roughly $7 million per person in 2026 unless Congress changes the law.

Gifts that do not count against any limit

Some gifts are completely exempt from gift tax rules and do not count toward your annual limit or lifetime exemption. The most common are:

  • Tuition and medical expenses: If you pay a school or medical provider directly on someone else's behalf, that payment is not a gift. You can pay unlimited amounts this way. The key is paying the provider directly, not giving money to the person.
  • Gifts to your spouse: You can give your spouse any amount at any time without limit or filing requirements, as long as your spouse is a U.S. citizen.
  • Gifts to charities: Donations to may have access to charities are not subject to gift tax and may be tax-deductible.
  • Gifts to political organizations: Contributions to political campaigns and organizations do not count as taxable gifts.

If you want to pay for a grandchild's college tuition, you can write a check directly to the university for any amount. If you give the grandchild cash to pay tuition themselves, that cash counts as a gift and may trigger the $18,000 limit.

Married couples and gift splitting

If you are married, you and your spouse can split gifts — treat a gift from one spouse as if it came from both. This doubles your annual limit to $36,000 per person per year in 2024.

For example: You give your daughter $36,000 in cash. Normally this would be your gift, and $18,000 of it would exceed the limit. But if your spouse agrees to split the gift, you each report $18,000, and neither of you files a return. Your spouse does not have to provide any of the money; they just have to consent to the split.

To split a gift, both spouses must file Form 709 for that year, even if neither owes tax. You cannot split gifts retroactively — you must elect to split in the year the gift is made. If you are unsure whether to split, file the form; it is easier than amending later.

State gift taxes

The federal government is not the only body that taxes gifts. A small number of states also impose their own gift tax. These state limits are usually lower than the federal limit and operate independently.

Connecticut, Delaware, Louisiana, Mississippi, North Carolina, and Tennessee have state gift taxes. The rules and thresholds vary by state. Connecticut, for instance, taxes gifts over $12,000 per person per year. If you live in or give to someone in one of these states, you may owe state tax even if you do not owe federal tax.

Check your state's tax authority website or speak with a tax professional if you live in or regularly give large sums to someone in a state with a gift tax. Federal and state rules do not align, and you may need to file both a federal and state return.

What happens if you exceed the limit

If you give more than $18,000 to one person in a year, you must file Form 709 with your federal tax return. Filing does not mean you owe tax — it means you are reporting the overage to the IRS.

The IRS will record the overage and reduce your lifetime exemption by that amount. If you give $25,000 to your son, you file Form 709 reporting the $7,000 overage. Your lifetime exemption drops from $13.61 million to $13.603 million. You owe no tax that year.

If you continue to give large amounts over many years and eventually exhaust your lifetime exemption, then any gifts above $18,000 per person per year are taxed at 40 percent. The person receiving the gift does not pay the tax — you do, as the giver. This is rare for most households.

Frequently Asked Questions

Do I owe tax if I give someone more than $18,000?

Not immediately. You must file Form 709 to report the overage, but the excess amount simply reduces your lifetime exemption. You owe no federal tax unless and until you have given away more than $13.61 million over your lifetime. For most people, this never happens.

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

Yes. The $18,000 limit applies per person per year. You can give $18,000 to your daughter, $18,000 to your son, $18,000 to your grandchild, and so on, all in the same year, without filing a return. You only file if you give more than $18,000 to any single person.

What if I give someone a loan instead of a gift?

A loan is not a gift if it is a genuine loan with a written agreement, an interest rate (even if below market rate), and a repayment schedule. The IRS has minimum interest rates that apply; check current rates before you lend. If there is no written agreement or interest rate, the IRS may treat it as a gift.

Can I give my child money for a down payment on a house without it counting as a gift?

If you give the money outright, it is a gift and counts toward the $18,000 limit. If you structure it as a loan with a promissory note and interest, it is not a gift. Many families use a written loan agreement to avoid triggering gift tax rules while still helping a child buy a home.

Does the $18,000 limit reset each year?

Yes. The annual exclusion resets on January 1 each year. If you give $18,000 to someone on December 31, you can give them another $18,000 on January 1 without exceeding the limit. The two gifts are in different tax years.