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

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. If you give more than $18,000 to a single person in a calendar year, you must report the excess on Form 709 (the gift tax return) when you file your taxes.

The exclusion applies to gifts of money, property, or anything else of value. It resets on January 1 each year. You can give $18,000 to as many different people as you want in the same year — the limit is per recipient, not per giver.

If you are married and your spouse agrees, you can combine your exclusions and give up to $36,000 to one person without filing a return. This is called gift splitting, and it requires both spouses to consent in writing on the gift tax return.

Key Takeaways

  • The 2024 annual exclusion is $18,000 per person per recipient, and it resets every January 1.
  • Gifts over $18,000 to one person in a year must be reported on Form 709, even if you owe no tax.
  • Married couples can give $36,000 per recipient by electing gift splitting on their tax return.
  • The exclusion applies to cash, property, investments, and any other gift of value.
  • Reporting a gift does not mean you pay tax — it counts against your lifetime exemption instead.

How the exclusion works in practice

The annual exclusion is the amount you can give away each year without any tax consequence. If you give $18,000 or less to one person, you do nothing — no return, no paperwork, no impact on your taxes. If you give $18,001 to that same person, you must file Form 709 to report the $1 excess.

Reporting the excess does not mean you owe gift tax. Instead, the excess counts against your lifetime exemption, which for 2024 is $13.61 million. You only owe actual tax if your total gifts and estate exceed that lifetime amount. Most people never reach it.

The exclusion is per recipient, not per giver. 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 year, and none of it requires a return. But if you give $20,000 to your daughter alone, you report the $2,000 excess.

Gifts that do not count against the exclusion

Some gifts are not subject to the annual exclusion at all. Payments made directly to a school or university for tuition do not count, even if they are very large. Payments made directly to a medical provider for someone's healthcare do not count either. These are called direct payment exclusions, and they exist separately from the annual limit.

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

Gifts to charities that are registered with the IRS as may have access to organizations do not count against the exclusion either. Political contributions to candidates, parties, and committees also do not count.

When you must file Form 709

You file Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) when you give more than the annual exclusion to any one person in a calendar year. You file it with your federal income tax return (Form 1040) by April 15 of the following year, or by the extended important date if you file for an extension.

Filing Form 709 does not mean you owe tax. It straightforward reports the gift to the IRS and uses up part of your lifetime exemption. If your total lifetime gifts and estate stay under $13.61 million, you will never owe gift tax.

If you are married and want to split gifts with your spouse, both of you must file Form 709 even if neither of you would otherwise be required to file. The form includes a section where you both consent to split the gift.

How the exclusion changes each year

The IRS adjusts the annual exclusion amount each year based on inflation. It usually stays the same for several years, then jumps by $1,000 or $2,000. In 2023, it was $17,000. In 2024, it increased to $18,000. The IRS announces the new amount in October or November of the prior year.

The lifetime exemption also changes with inflation. In 2024 it is $13.61 million per person. This amount is set to drop significantly on January 1, 2026, unless Congress changes the law. You can check the IRS website each year for the current amounts.

Gifts to minors and the annual exclusion

You can give up to $18,000 to a minor in 2024 without filing a return, just as you can to an adult. However, there are rules about how the money must be held. If you give money directly to a child under 18, a court may require it to be held in a guardianship or trust until the child reaches adulthood.

To avoid this, many parents and grandparents use a custodial account under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). These accounts let you give money to a minor while a custodian manages it until the child reaches age 18 or 21 (depending on your state). Gifts to a custodial account still count against the annual exclusion.

Another option is a 529 education savings plan. You can give up to $18,000 per year to a 529 account without filing a return. Some states also allow you to make a one-time election to treat a five-year contribution as if it were spread over five years, which lets you give up to $90,000 at once.

Frequently Asked Questions

What happens if I give more than $18,000 to one person?

You must file Form 709 to report the excess. The excess counts against your lifetime exemption of $13.61 million. You do not owe tax unless your total lifetime gifts and estate exceed that amount, which is rare.

Can I give $18,000 to multiple people without filing anything?

Yes. The $18,000 limit is per recipient per year. You can give $18,000 to ten different people in 2024 without filing a return. Each gift is separate.

Does my spouse's gifts count toward my $18,000 limit?

No, unless you elect gift splitting. Each person has their own $18,000 annual exclusion. If you are married and both give to the same person, you can each give $18,000 separately. If you want to combine your exclusions and give $36,000 from joint funds, you both must file Form 709 and consent to split the gift.

Do I owe tax if I file Form 709 for a gift over $18,000?

Not unless your total lifetime gifts exceed $13.61 million. Filing Form 709 straightforward reports the gift and uses up part of your lifetime exemption. Most people never reach the lifetime limit.

What if I give someone a loan instead of a gift?

A loan is not a gift if it is a genuine loan with a written agreement, a real interest rate, and a repayment schedule. The IRS requires you to charge at least the applicable federal rate (AFR) in interest. If you charge no interest or below-market interest, the IRS may treat part of it as a gift.