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

In 2024, you can give up to $18,000 to any one person without filing a gift tax return or using any of your lifetime exemption. This amount is called the annual exclusion. If you give more than $18,000 to a single person in a calendar year, you must report the excess on Form 709 when you file your taxes, even if you do not owe tax on it.

The exclusion applies per recipient, not per gift. You can give $18,000 to ten different people in the same year and stay under the limit with each one. Married couples can each give $18,000 to the same person, meaning a couple can give $36,000 to one recipient without reporting.

The $18,000 figure is set by the IRS and changes most years based on inflation. It was $17,000 in 2023 and will likely increase again in 2025. The exclusion resets on January 1 each year, so a gift on December 31 and another on January 1 are counted in separate years.

Key Takeaways

  • You can give $18,000 per person per year in 2024 without filing a gift tax return or reducing your lifetime exemption.
  • The limit is per recipient, so you can give $18,000 to multiple people in the same year without triggering reporting.
  • Married couples can each give $18,000 to the same person, allowing $36,000 total per recipient per year.
  • Gifts over $18,000 to one person require you to file Form 709, though you may not owe tax if you have remaining lifetime exemption.
  • The annual exclusion amount changes yearly with inflation and resets on January 1.

What counts as a gift for exclusion purposes

A gift is any transfer of money or property to another person where you receive nothing of equal value in return. Cash, stocks, real estate, vehicles, and artwork all count. Forgiving a loan also counts as a gift of the amount forgiven.

Some transfers do not count as gifts and do not use your exclusion. Payments made directly to a school or medical provider for tuition or medical care are not gifts, even if you pay on someone else's behalf. Payments to a spouse are not gifts. Charitable donations to may have access to organizations are not gifts. Political contributions are not gifts. These exceptions exist regardless of the amount.

Gifts to spouses who are U.S. citizens have no limit and no reporting requirement. Gifts to non-citizen spouses are limited to $18,000 per year (the same as the annual exclusion for other recipients) and must be reported if exceeded.

How the lifetime exemption works with the annual exclusion

The annual exclusion and the lifetime exemption are separate. The annual exclusion lets you give $18,000 per person per year with no paperwork. The lifetime exemption is a larger pool of money you can give away over your entire life before federal gift or estate tax applies.

In 2024, the lifetime exemption is $13.61 million per person. If you give more than $18,000 to one person in a year, the excess counts against your lifetime exemption. For example, if you give $25,000 to your child, the $7,000 over the annual exclusion reduces your lifetime exemption from $13.61 million to $13.603 million. You still file Form 709 to report it, but you do not owe tax.

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 in 2024 or 2025.

State gift taxes and when you might owe tax

Most states do not have a gift tax. However, Connecticut, Delaware, Illinois, Louisiana, Mississippi, New York, North Carolina, and Tennessee have had gift taxes at various points, though most are no longer active. Check your state's tax authority website if you live in one of these states or give property located there.

Federal gift tax is rare. You owe it only if you have used up your entire lifetime exemption and continue to give away money or property. For most people, this does not happen. The tax is paid by the giver, not the recipient, and the recipient never owes tax on a gift received.

If you are married and file jointly, you and your spouse can combine your lifetime exemptions, effectively doubling the amount either of you can give before owing tax. This is called exemption portability and requires filing Form 709 even if you do not owe tax.

Reporting gifts over $18,000

If you give more than $18,000 to one person in 2024, you must file Form 709 (United States Gift Tax Return) with your federal tax return for that year. The form is due by April 15 of the following year, the same deadline as your income tax return. You can request an extension if you need more time.

Form 709 requires you to list the recipient's name, address, and relationship to you; the date of the gift; a description of what was given; and the value of the gift. If you are married and your spouse consents, you can split the gift on one Form 709 instead of each filing separately.

Filing Form 709 does not mean you owe tax. It means you are reporting the excess and applying it to your lifetime exemption. Keep a copy of the form for your records. The IRS uses it to track how much of your lifetime exemption you have used.

Gifts to minors and trusts

Gifts to minors count toward the annual exclusion the same way gifts to adults do. You can give $18,000 to a minor in 2024 without reporting. However, money given to a minor must be managed by a custodian or guardian until the child reaches the age of majority (usually 18 or 21, depending on state law).

Gifts to a trust may or may not may have access to for the annual exclusion, depending on how the trust is written. A gift to a trust that gives the beneficiary the right to withdraw the gift immediately (called a Crummey power) can may have access to for the exclusion. A gift to a trust with no withdrawal rights does not may have access to and must be reported even if it is under $18,000.

If you are giving to a trust, consult the trust document or speak with the trustee before making the gift. The structure of the trust determines whether your gift uses the annual exclusion or counts entirely against your lifetime exemption.

Frequently Asked Questions

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

Not necessarily. You owe federal gift tax only if you have used up your entire $13.61 million lifetime exemption in 2024. Most people never reach this limit. You must file Form 709 to report gifts over $18,000, but filing does not mean you owe tax — it means you are documenting the excess against your lifetime exemption.

Can I give $18,000 on December 31 and another $18,000 on January 1 to the same person?

Yes. The annual exclusion resets on January 1 each year. A gift on December 31, 2024 counts toward your 2024 limit, and a gift on January 1, 2025 counts toward your 2025 limit. You can give $18,000 in each calendar year to the same person without reporting either gift.

What if I give a gift and do not report it?

The IRS may assess penalties and interest if you do not file Form 709 when required. The penalty is typically 5 percent per month of the unpaid tax, up to 25 percent. Even if you do not owe tax, filing the form protects you and creates a clear record of how much lifetime exemption you have used.

Does my spouse's gift to someone count against my annual exclusion?

No. Each person has their own $18,000 annual exclusion. Your spouse's gifts do not reduce your exclusion. However, if you are married and want to treat a gift as coming from both of you, you can file Form 709 together and split the gift, which doubles the amount you can give without reporting.