The annual limit is $18,000 per child in 2024

You can give up to $18,000 per year to each child without filing a gift tax return or owing any gift tax. This amount is called the annual exclusion, and it resets on January 1 each year. If you give more than $18,000 to one child in a single year, you must file a gift tax return (Form 709) with the IRS, even if you do not owe tax.

The $18,000 figure applies to gifts made in 2024. The IRS adjusts this amount every year for inflation, usually in increments of $1,000. In 2023, the limit was $17,000. In 2025, it will likely be $19,000, though the IRS has not yet announced the exact figure. Check the IRS website each January to confirm the current year's limit.

This limit applies to each child separately. If you have three children, you can give $18,000 to each one in the same year without triggering a gift tax return. A spouse can also give $18,000 to each child, meaning a married couple can together give $36,000 per child annually without filing.

Key Takeaways

  • You can give $18,000 per child per year (in 2024) without filing a gift tax return or owing tax.
  • The annual exclusion resets on January 1, so gifts made on December 31 and January 1 count toward different years.
  • If you exceed the limit, you must file Form 709 with the IRS, though you likely will not owe tax unless you have already used your lifetime exemption.
  • Married couples can each give $18,000 to the same child in one year, totaling $36,000 without filing.
  • Gifts to spouses and to charities have different rules and are not subject to the annual exclusion limit.

What counts as a gift for tax purposes

A gift is any transfer of money or property where you receive nothing of equal value in return. Cash, stocks, real estate, vehicles, jewelry, and tuition payments all count as gifts. The IRS does not care whether the gift was voluntary or whether you intended it as a tax strategy — if you gave something away and got nothing back, it is a gift.

Some transfers do not count as gifts, even though they look like them. If you pay someone's medical bills or tuition directly to the provider (the hospital or school, not the person), those payments do not count toward your annual limit. You can pay unlimited amounts this way. Similarly, gifts to your spouse and gifts to registered charities do not count against the $18,000 limit.

Loans are not gifts, even if you never expect to be repaid. However, if you lend money to a family member without charging interest, the IRS may treat the unpaid interest as a gift. To avoid this, you can use the IRS Applicable Federal Rate (AFR), which is a minimum interest rate you should charge. The AFR changes monthly and is published on the IRS website.

What happens if you give more than $18,000 in one year

If you give more than $18,000 to one child in a calendar year, you must file Form 709 (Gift Tax Return) with your tax return. Filing the form does not mean you owe tax — it straightforward reports the excess gift to the IRS. Most people who file Form 709 do not pay any tax at that time.

The excess amount is subtracted from your lifetime exemption, which is a separate pool of money you can give away tax-free over your entire life. In 2024, your lifetime exemption is $13.61 million. This is a very high number, and most people will never use it up. When you file Form 709 to report a gift over $18,000, you are straightforward documenting that you have used some of this lifetime exemption.

You only owe actual gift tax if you have already given away more than $13.61 million in your lifetime (or if you are married and your combined gifts exceed the limit for both spouses). For nearly all families, this never happens. The lifetime exemption is set to drop significantly in 2026 unless Congress acts, but that is a separate planning question.

Gifts to minors and custodial accounts

You can give money or property directly to a minor child, and the $18,000 annual exclusion still applies. However, minors cannot legally manage large sums of money, so you may want to set up a structure to hold the gift. A custodial account (also called an UTMA or UGMA account, depending on your state) lets you give money to a minor while you or another adult manages it until the child reaches adulthood (usually age 18 or 21).

Gifts to a custodial account count toward your annual exclusion just like direct gifts do. You can give $18,000 per year to a custodial account for each child without filing a gift tax return. The money in the account grows tax-deferred, though the child may owe income tax on earnings above a certain threshold.

A 529 college savings plan is another option. You can give $18,000 per year to a 529 account per child without filing. Additionally, 529 plans have a special rule that lets you give up to $90,000 in one year (five years' worth of annual exclusions) if you file a special election on Form 709. This is useful if you want to fund a child's education in one large gift.

Timing gifts across calendar years

The annual exclusion is based on the calendar year, not on any other period. A gift made on December 31 counts toward that year's limit. A gift made on January 1 counts toward the next year's limit. If you are close to the $18,000 limit late in the year, you can wait until January 1 to give the next gift and use the fresh annual exclusion.

This timing rule applies to all gifts, whether cash, checks, or property transfers. If you write a check on December 31 but the recipient does not cash it until January, the gift still counts in the year you wrote the check. If you transfer stock on December 31, it counts in that year even if the transfer takes a few days to settle.

Gifts from married couples and split gifts

If you are married, you and your spouse can each use your own $18,000 annual exclusion. This means you can together give $36,000 to one child in a year without filing a gift tax return. You do not need to do anything special — each spouse straightforward gives their own $18,000.

If one spouse gives more than $18,000 and the other gives less, you can file Form 709 and elect gift splitting. This treats the gifts as if each spouse gave half, which may keep you under the annual exclusion. For example, if one spouse gives $25,000 and the other gives $5,000, you can elect to split and treat it as each spouse giving $15,000. Gift splitting requires both spouses to consent and to file Form 709 together.

State gift taxes and other considerations

The federal gift tax is the main tax you need to know about, but a few states also have their own gift taxes. Connecticut, Delaware, Louisiana, North Carolina, and Tennessee have gift taxes, though the rules and thresholds vary. If you live in one of these states, check your state tax authority's website for rules specific to your situation.

Gifts do not affect your child's income tax return or your own, as long as you are not giving away income-producing property that generates earnings in your child's name. If you give a child stock that pays dividends, the child may owe income tax on those dividends, but the gift itself is not taxable income.

If you are concerned about how a large gift might affect your child's financial aid for college, speak with the college's financial aid office. Gifts to a student can reduce their may be able to access for need-based aid, though the impact varies by school and by how the gift is structured.

Frequently Asked Questions

Can I give my child more than $18,000 if I do not tell the IRS?

The IRS does not have a way to know about most gifts unless someone reports them. However, filing Form 709 is a legal requirement if you give more than $18,000 to one person in a year. Not filing when required is tax evasion. The safe and legal approach is to file the form if you exceed the limit — it does not mean you owe tax, only that you are reporting the gift.

Do gifts to my child reduce my estate tax exemption?

Yes. Gifts over the annual exclusion reduce your lifetime exemption dollar-for-dollar. If you give your child $25,000 in one year, the $7,000 excess reduces your $13.61 million lifetime exemption to $13.603 million. For most families, this does not matter because the lifetime exemption is so large. However, if you are very wealthy or expect to leave a large estate, this is worth discussing with an estate planning attorney.

What if I give my child a loan instead of a gift?

A loan is not a gift if you charge interest and document the loan in writing. Use the IRS Applicable Federal Rate (AFR) as your minimum interest rate — you can charge more, but not less. If you do not charge interest, the IRS may treat the unpaid interest as a gift. The AFR is published monthly on the IRS website and is usually quite low.

Can I give my child money for college without it counting as a gift?

If you pay the college or university directly for tuition, that payment does not count toward your annual exclusion limit. You can pay unlimited tuition this way. However, if you give money to your child and they pay the tuition, it counts as a gift. The key is whether you pay the school directly or give the money to the child.

Does my child have to report the gift on their tax return?

No. Gifts are not income, so your child does not report them on their tax return. Your child only reports income from the gift — such as interest, dividends, or capital gains — if the gift is invested and generates earnings.