The annual limit is $18,000 per person in 2024, but most people never file a gift tax return

You can give up to $18,000 to any one person in a calendar year without filing a federal gift tax return. That amount resets on January 1 each year. If you give more than $18,000 to a single person in one year, you must file Form 709 (United States Gift Tax Return) with the IRS, even if you owe no tax.

The $18,000 figure is the 2024 annual exclusion amount. This number changes most years — it is adjusted for inflation and rounded to the nearest $1,000. In 2023 it was $17,000. In 2025 it will likely be $19,000, though the IRS announces the new amount in late October of the prior year. If you are married and your spouse agrees, you can each give $18,000 to the same person in the same year, for a combined $36,000, without either of you filing a return. This is called gift splitting and requires both spouses to consent on Form 709 if the gift exceeds the limit.

Key Takeaways

  • You can give $18,000 per person per year (in 2024) without filing a gift tax return, and this limit resets every January 1.
  • Gifts to spouses and to charities are unlimited and never count toward the annual exclusion, regardless of amount.
  • If you give more than $18,000 to one person in a year, you must file Form 709 even if you owe no tax, but the excess does not automatically trigger a tax bill.
  • Married couples can combine their exclusions to give $36,000 per person per year if both spouses consent in writing on the tax return.
  • The annual exclusion amount changes yearly with inflation; check the IRS website each October for the next year's limit.

What happens when you give more than $18,000 to one person

If you give $25,000 to your child in 2024, you have exceeded the annual exclusion by $7,000. You must file Form 709 with the IRS. However, filing the form does not mean you owe gift tax on that $7,000.

Instead, the $7,000 overage is subtracted from your lifetime gift and estate tax exemption. In 2024, that exemption is $13.61 million per person. Most people will never reach that limit in their lifetime, so they never actually pay gift tax. The form simply documents the overage for IRS records. You only owe gift tax if your total gifts over your lifetime (plus the value of your estate when you die) exceed $13.61 million. For most households, that threshold is unreachable. The lifetime exemption amount also changes yearly and is set to drop significantly in 2026 unless Congress acts.

Gifts that do not count toward the annual limit

Certain gifts are unlimited and never count against the $18,000 annual exclusion, no matter how large:

  • Gifts to your spouse — if your spouse is a U.S. citizen, you can give them any amount without limit or filing requirements.
  • Gifts to charities — donations to may have access to charitable organizations are unlimited and often deductible on your income tax return.
  • Tuition and medical expenses paid directly to the provider — if you pay a school or hospital directly on someone else's behalf, that payment does not count as a gift, even if the amount is large. You must pay the provider directly; reimbursing the person does count as a gift.
  • Gifts to non-citizen spouses — these have a higher annual exclusion ($185,000 in 2024) but are still limited, unlike gifts to citizen spouses.

The direct-payment rule is the most commonly overlooked. If you want to help a grandchild with college, contact the university's bursar office and pay the tuition bill yourself. That payment avoids the annual exclusion entirely. If instead you give your grandchild $30,000 and they pay tuition, the full $30,000 counts as a gift and exceeds your limit by $12,000.

How to track gifts across multiple people

The $18,000 limit applies per recipient, not per giver. If you give $18,000 to your daughter and $18,000 to your son in the same year, you have not exceeded the limit for either of them. You owe no return and no tax.

If you give $20,000 to your daughter and $20,000 to your son, you have exceeded the limit for each of them by $2,000 each. You must file Form 709, and $4,000 total is subtracted from your lifetime exemption. Again, you likely owe no tax unless you have already used most of your $13.61 million lifetime exemption. Keep records of all gifts you make in a year, including the date, recipient, and amount. If you give cash, a check, or a transfer, document it. If you give property or investments, record the fair market value on the date of the gift. These records help you and your tax preparer determine whether you need to file Form 709.

When to file Form 709 even if you owe no tax

You must file Form 709 if you gave more than $18,000 to any single person during the calendar year. You file it with your federal income tax return (Form 1040) by the tax deadline, usually April 15 of the following year. You can request an extension if you need more time.

Filing the form does not mean you owe tax. It is a disclosure form that tells the IRS about the overage and reduces your lifetime exemption. Many people file Form 709 year after year and never pay a dime in gift tax because they stay well below the $13.61 million lifetime threshold. If you do not file Form 709 when required, the IRS may assess penalties and interest. The penalty is usually 5 percent per month of the unpaid tax (if any), up to 25 percent. Even if no tax is owed, filing on time protects you from penalties and keeps your lifetime exemption records clear.

State gift taxes and other rules

The federal gift tax is separate from state gift taxes. Most states do not have a gift tax, but a few do: Connecticut, Delaware, Louisiana, Mississippi, North Carolina, and Tennessee have some form of gift or inheritance tax. If you live in one of these states, check your state's rules, as the limits and rules may differ from federal law.

Some states have no gift tax but do have an inheritance tax, which applies to what heirs receive, not what you give. That is a different matter and does not affect your annual exclusion for federal purposes. State rules can be complex, and a state may tax a gift that the federal government does not, or vice versa. If you make large gifts and live in a state with a gift or inheritance tax, consult a tax professional in your state to understand your obligations.

Frequently Asked Questions

Do I have to report gifts to the IRS if they are under $18,000?

No. Gifts under the annual exclusion ($18,000 in 2024) 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.

If I give my child $20,000, do I owe gift tax right now?

No. You must file Form 709 to report the $2,000 overage, but you do not owe tax unless your lifetime gifts (plus your estate) exceed $13.61 million. The overage simply reduces your lifetime exemption by $2,000.

Can my spouse and I each give $18,000 to the same person?

Yes, if you both consent. This is called gift splitting. You can each give $18,000 to one person in the same year for a combined $36,000. Both spouses must agree and sign Form 709 if the total exceeds either spouse's individual limit.

What if I give someone a car or stock instead of cash?

The same rules apply. You must value the car or stock at its fair market value on the date you give it. That value counts toward the $18,000 annual exclusion. If the car is worth $25,000, you have exceeded the limit by $7,000 and must file Form 709.

Does paying someone's medical bill or tuition count as a gift?

Only if you give money to the person. If you pay the hospital or school directly, it does not count as a gift and does not use your annual exclusion. But if you give the person money and they pay the bill, that counts as a gift.