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 or reducing your lifetime exemption. This amount is the annual exclusion set by the IRS for 2024. 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, even if you do not owe tax.

The annual exclusion amount changes most years. The IRS adjusts it for inflation in $1,000 increments. For 2023 it was $17,000; for 2025 it will be $19,000. You can find the current year's amount on the IRS website or by calling the IRS directly.

The exclusion applies to gifts of money, property, investments, or anything else of value. It does not matter whether the gift is in cash, a check, a transfer to a bank account, or a deed to real estate. What matters is the fair market value of what you gave on the date you gave it.

Key Takeaways

  • You can give $18,000 per person per year (in 2024) without filing a gift tax return or using any of your lifetime exemption.
  • If you give more than the annual exclusion to one person in one year, you must file Form 709 with your tax return, but you may still owe no tax.
  • Married couples can each give $18,000 to the same person in the same year, for a combined $36,000 with no return required.
  • Gifts to spouses and to charities are generally not subject to gift tax limits, regardless of amount.
  • The annual exclusion amount changes yearly and is set by the IRS based on inflation.

How the annual exclusion works if you are married

If you are married and file jointly, you and your spouse each have a separate $18,000 annual exclusion. This means you can give a combined $36,000 to one person in one year without either of you filing a return. Each spouse's exclusion is independent—you do not combine them or share them.

If one spouse gives more than $18,000 to a single person, that spouse must file Form 709. The other spouse does not have to file unless they also exceeded their own $18,000 limit with that person or someone else. Married couples often use this rule to give larger amounts to children or grandchildren by having both spouses participate.

What happens when you exceed the annual exclusion

If you give more than $18,000 to one person in one year, the excess amount counts against your lifetime exemption. The lifetime exemption for 2024 is $13.61 million. This is the total amount you can give away during your lifetime (or at death) before owing federal gift or estate tax.

Filing Form 709 does not mean you owe tax immediately. It means you are reporting the excess gift and using part of your lifetime exemption. Most people never reach the $13.61 million lifetime limit, so they file the form but pay no tax. The form is a record for the IRS of how much of your exemption you have used.

If you give $25,000 to your daughter in 2024, you file Form 709 and report the $7,000 overage. That $7,000 reduces your lifetime exemption from $13.61 million to $13.603 million. You owe no tax unless and until your total lifetime gifts exceed $13.61 million.

Gifts that do not count toward the limit

Certain gifts are not subject to gift tax at all, no matter the amount. Gifts to your spouse (if your spouse is a U.S. citizen) have no limit. You can give your spouse $1 million, $10 million, or any amount, and it does not trigger gift tax or use your exemption.

Gifts to charities that are registered with the IRS as tax-exempt organizations also have no limit. You can give a charity $500,000 and owe no gift tax. Gifts that pay someone's medical bills or tuition directly to the provider (not to the person) are also unlimited—you can pay a grandchild's college tuition or surgery costs directly to the school or hospital with no tax consequence.

Gifts to political organizations and certain other entities may also be unlimited. The key is that the gift must go directly to the provider (the hospital, the university, the charity), not to the person receiving the benefit.

State gift tax rules

Most states do not have a gift tax. However, a few states—Connecticut, Delaware, Illinois, Louisiana, Mississippi, North Carolina, and Tennessee—have or had gift tax laws. The rules and limits vary by state and change over time. If you live in or are giving to someone in one of these states, check with a tax professional or your state's revenue department for current rules.

State gift tax is separate from federal gift tax. You can owe state tax even if you do not owe federal tax, or vice versa. The annual exclusion amounts and lifetime exemptions are also different at the state level.

How to report gifts on your taxes

If all your gifts in a year are under the annual exclusion ($18,000 per person), you do not file any form or report them to the IRS. You simply keep records of what you gave and to whom, in case the IRS asks later.

If you exceed the annual exclusion with any person, you file Form 709 (United States Gift Tax Return) with your federal tax return. Form 709 is filed with your 1040 return, not separately. You must file it even if you owe no tax. The deadline is the same as your income tax return deadline, usually April 15 of the following year. If you file an extension for your income tax return, your Form 709 extension deadline is also extended.

Keep records of the date, amount, and recipient of any gift over the annual exclusion. If the gift is property or an investment, document its fair market value on the date you gave it. These records support your Form 709 filing and protect you if the IRS questions the gift later.

Frequently Asked Questions

Can I give someone $18,000 multiple times in one year without filing?

No. The $18,000 limit is per person per calendar year, not per transaction. If you give your son $10,000 in January and $10,000 in December, you have given him $20,000 in one year and must file Form 709. It does not matter how many separate gifts you made.

Do I have to tell the person I gave them a gift for tax purposes?

No. The gift tax is the giver's responsibility, not the recipient's. The person who receives the gift does not report it as income and does not owe tax on it. You are responsible for filing Form 709 if required and for keeping records.

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

If it is a true loan with a written agreement, a stated interest rate, and a repayment schedule, it is not a gift and does not count toward the annual exclusion. However, if you forgive the loan later, the forgiven amount becomes a gift and counts toward the exclusion in the year you forgive it. If you charge no interest, the IRS may require you to charge at least the applicable federal rate (AFR), which changes monthly.

Does giving money to my child for college count against the limit?

It depends. If you give money directly to your child and they pay the college, it counts as a gift toward the $18,000 limit. If you pay the college directly, it does not count—tuition and fees paid directly to the educational institution are unlimited gifts. The same rule applies to medical expenses paid directly to the provider.

What if I give someone a car or property?

The gift is valued at its fair market value on the date you gave it. A car worth $20,000 is a $20,000 gift. Real estate is valued at its appraised value. If the value exceeds $18,000, you must file Form 709 and the excess counts against your lifetime exemption.