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 with the IRS. This amount is called the annual exclusion. If you give more than this to any one person in a single year, you must file Form 709 (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. In 2023 it was $17,000. In 2025 it will likely be $19,000, though the IRS has not yet announced the final figure. You can check the IRS website each January for the current year's amount.
This limit 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 car, or real estate — the $18,000 threshold applies the same way.
Key Takeaways
- You can give $18,000 per person per year (in 2024) without filing a gift tax return, and this amount changes annually for inflation.
- The annual exclusion applies separately to each person you give to, so you can give $18,000 to your son and $18,000 to your daughter in the same year without reporting either gift.
- If you are married, you and your spouse can each give $18,000 to the same person, meaning a married couple can give $36,000 per person per year without filing.
- Gifts above the annual exclusion must be reported on Form 709, but you typically do not owe tax unless you have exceeded your lifetime gift and estate tax exemption of $13.61 million (in 2024).
- Certain gifts do not count toward the limit at all: tuition paid directly to a school, medical expenses paid directly to a provider, and gifts to your spouse or to charities.
How the annual exclusion works when you give to multiple people
The $18,000 limit is per recipient, per year. This means you can give $18,000 to your daughter, $18,000 to your son, $18,000 to your grandchild, and $18,000 to a friend all in the same calendar year without filing a return or owing tax on any of it.
The calendar year runs January 1 through December 31. If you give $10,000 to someone in December and another $10,000 to that same person in January of the next year, those are two separate gifts under two separate annual exclusions. The first counts toward the prior year's limit, the second toward the new year's limit.
If you give more than $18,000 to one person in a single year, you must report the excess on Form 709. The excess does not disappear — it counts against your lifetime exemption, which is a much larger pool of money you can give away over your entire life before owing federal gift tax.
Married couples and the annual exclusion
If you are married, you and your spouse can each use your own $18,000 annual exclusion. This means a married couple can give $36,000 per person per year without filing a return. You can give $36,000 to your son, $36,000 to your daughter, and $36,000 to a grandchild all in the same year.
To use both exclusions, the gift must come from both spouses' assets, or you must make an election on Form 709 called gift splitting. Gift splitting lets you treat a gift from one spouse as if it came from both of you, even if only one spouse actually gave the money. This is useful if one spouse has significantly more assets than the other.
If you use gift splitting, you must file Form 709 even if the total gift is under $36,000, because the form is how you elect to split the gift. You do not owe tax, but the IRS needs the filing to record your election.
Gifts that do not count toward the annual exclusion
Some gifts are completely excluded from the annual limit. These are called may have access to gifts, and you can give unlimited amounts of them without filing a return or using any of your exemption.
Tuition and medical expenses are the most common may have access to gifts. You can pay someone's college tuition or medical bills directly to the school or provider with no limit and no reporting required. The key is that you must pay the institution directly — if you give the money to the person and they pay the bill, it counts as a regular gift and uses your annual exclusion.
Gifts to your spouse have no limit if your spouse is a U.S. citizen. You can give your spouse any amount of money or property without filing a return or using your exemption. If your spouse is not a U.S. citizen, the limit is higher than the annual exclusion but not unlimited — it was $185,000 in 2024.
Gifts to charities do not count toward the annual exclusion. You can give any amount to a may have access to charity and receive a tax deduction on your income tax return (subject to income limits). Charitable gifts are reported on your income tax return, not on Form 709.
What happens if you exceed the annual exclusion
If you give more than $18,000 to one person in a year, you must file Form 709 with the IRS. Filing the form does not mean you owe gift tax — it simply reports the excess gift to the IRS.
The excess amount counts against your lifetime exemption, which in 2024 is $13.61 million per person. This is a cumulative total of all gifts over the annual exclusion that you can make during your lifetime before owing federal gift tax. Most people never reach this limit, so filing Form 709 is a reporting requirement, not a tax bill.
The lifetime exemption is scheduled to drop to roughly $7 million per person on January 1, 2026, unless Congress changes the law. This is important to know if you are planning large gifts — you may want to make them before 2026 to use the higher exemption.
If you do not file Form 709 when required, the IRS may assess penalties. The penalty is usually 5% of the unpaid tax per month, though if you have reasonable cause for not filing, you may be able to avoid it.
State gift taxes
A few states have their own gift tax in addition to the federal tax. As of 2024, only Connecticut, Delaware, Illinois, Louisiana, North Carolina, and Tennessee impose a state gift tax. If you live in one of these states, you may need to file a state gift tax return even if you do not owe federal tax.
State gift tax rules vary widely. Some states use the same annual exclusion as the federal government; others use a different amount. Connecticut, for example, has a $17,000 annual exclusion (in 2024) and a lifetime exemption of $6.94 million. You should check your state's tax department website or speak with a tax professional if you live in a state with a gift tax and are making large gifts.
Most states do not have a gift tax. If you live in a state without one, you only need to worry about the federal rules.
Frequently Asked Questions
Do I have to report gifts under $18,000?
No. Gifts under the annual exclusion 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. Keep records for your own files, but no filing is required.
What if I give someone $20,000 — do I owe tax on the extra $2,000?
You do not owe tax on the $2,000 excess unless you have already used up your $13.61 million lifetime exemption, which almost no one has. You must file Form 709 to report the excess $2,000, but it simply counts against your lifetime exemption. No tax is due.
Can I give $18,000 to my child and $18,000 to my grandchild in the same year?
Yes. The $18,000 limit applies per person per year. You can give $18,000 to each of your children, each of your grandchildren, and anyone else, all in the same calendar year, without filing a return or owing tax.
Does paying someone's rent or mortgage count as a gift?
Yes, if you give money directly to the person. If you pay the landlord or mortgage lender directly on their behalf, it still counts as a gift and uses your annual exclusion. The exception is if you pay tuition or medical expenses directly to the provider — those are may have access to gifts with no limit.
If my spouse and I give $36,000 to our son, do we both have to file Form 709?
No, only one of you files. The spouse who actually gave the money files Form 709 and elects gift splitting on the form. The other spouse does not file separately. Both of your annual exclusions are used, but only one return is filed.