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

You can give up to $18,000 to any one person in 2024 without filing a gift tax return or reducing your lifetime gift and estate tax exemption. This amount is called the annual exclusion. The IRS adjusts it each year for inflation, so the number changes — it was $17,000 in 2023 and will be $18,000 again in 2024.

If you give more than $18,000 to a single person in a calendar year, you must file Form 709 (United States Gift Tax Return) with the IRS, even if you owe no tax. The excess amount counts against your lifetime exemption, which is the total amount you can give away or leave to heirs without owing federal gift or estate tax. For 2024, that lifetime exemption is $13.61 million per person.

The annual exclusion applies per recipient, not per giver. If you and your spouse both give to the same person, you each get your own $18,000 exclusion — meaning you can give $36,000 combined without filing.

Key Takeaways

  • You can give $18,000 to any one person in 2024 without filing a gift tax return or using your lifetime exemption.
  • Gifts to spouses who are U.S. citizens have no limit, and gifts for someone's medical or education expenses do not count toward the annual exclusion if paid directly to the provider.
  • If you give more than $18,000 to one person in a year, you file Form 709 but may owe no tax if the excess stays within your $13.61 million lifetime exemption.
  • The annual exclusion amount changes each year — check the IRS website or your tax preparer to confirm the current year's limit.

Gifts that do not count toward the $18,000 limit

Certain gifts fall outside the annual exclusion entirely. If you pay someone's medical bills directly to the hospital, doctor, or clinic, that payment does not count toward your $18,000 limit — no matter how large. The same rule applies to tuition paid directly to a school or university. You can make these payments in addition to giving the person $18,000 in cash or other gifts.

Gifts to your spouse who is a U.S. citizen have no limit at all. You can give your spouse any amount without filing a return or using your lifetime exemption. (If your spouse is not a U.S. citizen, the annual exclusion is higher — $185,000 in 2024 — but still applies.)

Gifts to political organizations and certain charitable organizations also do not count. If you give to a may have access to charity, you may even deduct the gift on your tax return, though that is a separate calculation from the gift tax rules.

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

If you give $25,000 to your adult child in 2024, the first $18,000 is covered by your annual exclusion. The remaining $7,000 is a taxable gift. You must file Form 709 with the IRS to report it.

Filing Form 709 does not mean you owe tax when ready. Instead, the $7,000 counts against your lifetime exemption of $13.61 million. As long as your total gifts and estate stay under that lifetime limit, you owe no federal gift tax. The form is a record-keeping step, not a bill.

If you give away more than your lifetime exemption over your lifetime and at death, then the excess is subject to the federal gift and estate tax, which is 40 percent. For most people, the lifetime exemption is so large that they never reach it. But the form must be filed to document where you stand.

Gifts between spouses and to non-citizens

Gifts to a spouse who is a U.S. citizen are unlimited. You can transfer any amount — $100,000, $1 million, your entire bank account — without filing a return or using your exemption. This rule is called the marital deduction.

If your spouse is not a U.S. citizen, the rule is different. You can give up to $185,000 per year (in 2024) without filing. Amounts above that count toward your lifetime exemption. The higher limit exists because non-citizen spouses do not automatically inherit the unlimited marital deduction at death, so the law gives a larger annual cushion during life.

Gifts paid directly to providers do not count

When you pay a medical or education provider directly on someone's behalf, that payment is not treated as a gift to that person. It does not count toward the $18,000 annual exclusion and does not require a gift tax return.

The key is that you pay the provider directly, not the person. If you give your grandchild $10,000 in cash and they use it to pay tuition, that $10,000 counts as a gift to them and uses part of your $18,000 exclusion. But if you write a check to the university for $10,000 on their behalf, it does not count at all.

This rule applies to any medical expense — surgery, dental work, therapy, prescription drugs — and any tuition or education fee. Room and board at college does not may have access to; only tuition and fees do. If you are unsure whether a specific expense qualifies, ask the provider or your tax preparer before paying.

How the annual exclusion and lifetime exemption work together

Think of the lifetime exemption as a pool of money you can give away over your lifetime and at death without owing federal tax. The annual exclusion is a yearly allowance that does not touch that pool.

Each year, you get a fresh $18,000 per recipient. If you give $18,000 to your child and $18,000 to your grandchild in 2024, you have used $0 of your lifetime exemption — both gifts are covered by the annual exclusion. If you give $25,000 to your child, the extra $7,000 comes out of your lifetime pool.

Your lifetime exemption in 2024 is $13.61 million. If you give away $5 million during your lifetime, you have $8.61 million left. When you die, your estate can pass $8.61 million to heirs tax-free; anything above that is taxed at 40 percent. The annual exclusion does not reduce this number — it just lets you give $18,000 per person per year without tracking or filing.

The annual exclusion amount changes each year

The IRS adjusts the annual exclusion for inflation every January. In recent years it has been $16,000 (2022), $17,000 (2023), and $18,000 (2024). The lifetime exemption also changes — it was $12.92 million in 2023 and $13.61 million in 2024.

These amounts are set by law and adjusted by formula. You cannot predict the exact number for future years, but you can check the IRS website each January or ask your tax preparer what the current year's limit is. If you plan to make large gifts, knowing the current exclusion helps you decide whether to file a return.

Frequently Asked Questions

Do I owe tax if I give someone more than $18,000 in 2024?

Not necessarily. You must file Form 709 to report the excess, but you owe no tax as long as your total lifetime gifts stay under $13.61 million. The excess counts against your lifetime exemption, not your current-year tax bill. Most people never reach the lifetime limit.

Can my spouse and I each give $18,000 to the same person without filing?

Yes. Each person gets their own $18,000 annual exclusion. If you and your spouse both give to your adult child, you can give $36,000 combined in 2024 without either of you filing a return.

What if I give someone a gift and they give me money back — does that count as a gift?

No. A gift is a transfer with no expectation of repayment. If someone repays you, it is a loan or a return of funds, not a gift. You do not file a gift tax return for money someone gives back to you.

Do I have to report gifts to the IRS if they are under $18,000?

No. Gifts under the annual exclusion do not require a return. You only file Form 709 if you give more than $18,000 to one person in a calendar year, or if you give to someone who is not a U.S. citizen spouse (different rules explore).

If I give someone $18,000 every year, does my lifetime exemption go down?

No. The annual exclusion is separate from the lifetime exemption. Gifts within the annual exclusion do not reduce your lifetime exemption at all. You can give $18,000 per person every year for the rest of your life and never touch your $13.61 million lifetime pool.