The 2024 annual gift tax exclusion is $18,000 per person

In 2024, you can give up to $18,000 to any individual without triggering a gift tax filing requirement or using any of your lifetime exemption. This amount applies to each person you give to — so you can give $18,000 to your child, $18,000 to your grandchild, $18,000 to a friend, and so on, all in the same year, without filing.

The exclusion amount changes most years because it is tied to inflation and rounded to the nearest $1,000. The IRS announced the 2024 figure in October 2023. For 2025, the exclusion will increase to $19,000 per person, reflecting the cost-of-living adjustment.

If you give more than $18,000 to one person in a single year, you do not automatically owe tax. Instead, you must file Form 709 (the gift tax return) with the IRS and report the overage. That overage counts against your lifetime exemption — a separate pool of roughly $13.61 million per person in 2024 that shields you from gift and estate tax over your entire life.

Key Takeaways

  • You can give $18,000 per recipient per year in 2024 without filing a gift tax return or reducing your lifetime exemption.
  • The exclusion applies to each person you give to separately, so married couples can give $36,000 per recipient if they both use their exclusions.
  • Gifts that exceed $18,000 to one person require you to file Form 709, even if you owe no tax, because the overage uses your lifetime exemption.
  • Certain gifts — including tuition paid directly to a school and medical expenses paid directly to a provider — do not count toward the exclusion at all.
  • The exclusion amount increases most years with inflation; it was $17,000 in 2023 and will be $19,000 in 2025.

How the exclusion works with married couples

If you are married, both you and your spouse have separate $18,000 exclusions in 2024. This means a married couple can give $36,000 per recipient per year without filing — $18,000 from each spouse.

To use both exclusions, you do not need your spouse's permission or a joint return. Each of you simply gives your own $18,000. However, if one spouse gives more than $18,000 to a single person, that spouse must file Form 709 to report it. Your spouse does not file unless they also exceeded their own exclusion.

There is one exception: gift splitting. If you want to treat a gift you made alone as if both spouses made it together, you and your spouse can elect gift splitting on Form 709. This is useful if, for example, you gave $25,000 from your own account but want to split it as if you each gave $12,500. Both spouses must consent to the split, and both must file Form 709 that year.

Gifts that do not count toward the exclusion

Some gifts fall outside the exclusion entirely. The most common are direct payments for tuition and direct payments for medical care. If you pay a school or university directly for someone's tuition, or pay a hospital or doctor directly for medical treatment, those payments do not count as gifts and do not use your $18,000 exclusion.

The payment must go directly to the provider — the school or the medical facility. If you give money to the person and they pay the tuition or medical bill themselves, it counts as a regular gift and uses your exclusion.

Gifts to your spouse (if your spouse is a U.S. citizen) and gifts to charities also do not count toward the exclusion. There is no limit on how much you can give to a U.S. citizen spouse or to a may have access to charity without filing.

What happens if you exceed $18,000 in a single year

Exceeding the exclusion does not mean you owe tax immediately. Instead, you file Form 709 with your tax return and report the overage. The amount over $18,000 is subtracted from your lifetime exemption — the pool of money you can transfer tax-free over your entire life and at death.

For example, if you gave $25,000 to your child in 2024, you would file Form 709 reporting the $7,000 overage. That $7,000 would reduce your lifetime exemption from $13.61 million to $13.603 million. You would owe no tax in 2024, but your lifetime exemption would be smaller when you die or make large gifts later.

You only owe gift tax if you have already used up your entire lifetime exemption. For most people, that never happens. The lifetime exemption is so large that only the wealthiest estates trigger gift tax at all.

The difference between the annual exclusion and lifetime exemption

These two numbers are often confused because they work together. The annual exclusion ($18,000 in 2024) is the amount you can give per person per year without any paperwork or consequences. It resets every January 1st.

The lifetime exemption ($13.61 million per person in 2024) is a separate limit that applies over your entire life. Every time you give more than $18,000 to one person in a year, the overage counts against this lifetime pool. When you die, your estate also counts against it. Once you have used the entire lifetime exemption, any additional gifts or estate value above the annual exclusion are taxed at 40%.

The lifetime exemption is set by law and changes only when Congress acts. It is much larger now than it was in 2017, but it is scheduled to drop back to roughly $7 million per person (adjusted for inflation) on January 1, 2026, unless Congress extends the current law.

Reporting gifts on your tax return

If all your gifts in 2024 stayed under $18,000 per person, you do not file anything. No form, no return, no report to the IRS. The exclusion is automatic.

If you gave more than $18,000 to any single person in 2024, you must file Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) with your 2024 tax return. You file it even if you owe no tax, because the IRS needs to see the overage and record it against your lifetime exemption.

Form 709 is due when you file your income tax return — April 15, 2025, for the 2024 tax year (or October 15 if you file an extension). If you file your income tax return early, you can file Form 709 with it, or you can file Form 709 separately by the April 15 deadline.

How inflation affects the exclusion each year

The IRS adjusts the annual exclusion for inflation every January. The adjustment is rounded to the nearest $1,000, so the exclusion does not change every year — it stays the same until inflation pushes it up by $1,000 or more.

Recent exclusion amounts: $17,000 in 2023, $18,000 in 2024, and $19,000 in 2025. Before that, it was $16,000 from 2022 through 2023, and $15,000 from 2018 through 2021. The IRS publishes the new exclusion amount in October of the prior year.

The lifetime exemption also adjusts for inflation each year, but it is much larger and changes more slowly. In 2024 it is $13.61 million per person; in 2025 it will be $13.99 million.

Frequently Asked Questions

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

No. Gifts under $18,000 per person per year require no filing and no report to the IRS. The exclusion is automatic. You only file Form 709 if you gave more than $18,000 to a single person in the year.

Can I carry over unused exclusion to next year?

No. The $18,000 exclusion is per year and does not roll over. If you give $10,000 to your child in 2024, you do not get to give $26,000 in 2025. Each year you have a fresh $18,000 per person.

Does a gift of cash count differently than a gift of property?

No. Cash, stock, real estate, vehicles, and other property all count the same way toward the exclusion. The value of the property on the date you give it is what counts. If you give stock worth $18,000, that uses your full exclusion, just as $18,000 in cash does.

What if I give money to my grandchild's 529 college savings plan?

A contribution to a 529 plan counts as a gift and uses your $18,000 exclusion per grandchild per year. However, 529 plans have a special rule: you can contribute up to five years' worth of exclusions ($90,000 in 2024) in a single year and treat it as if you spread it over five years, as long as you file Form 709 and make the election. This is one of the few ways to give a large sum without immediately using your lifetime exemption.

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

Not unless you have already used your entire $13.61 million lifetime exemption. For most people, exceeding the annual exclusion just means filing Form 709 and reducing your lifetime exemption. You owe no tax in that year. Tax is only due if your lifetime exemption is completely exhausted.