The 2024 annual gift 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 using any of your lifetime gift and estate tax exemption. This amount is called the annual exclusion, and it resets every January 1st. The IRS adjusts it most years for inflation, so the limit changes — it was $17,000 in 2023.

The key rule: you can give $18,000 to as many different people as you want in a single year, and none of it counts toward your lifetime exemption. If you give more than $18,000 to one person in one year, you must file Form 709 (the gift tax return) with the IRS, even if you do not owe any tax.

If you are married, you and your spouse can each give $18,000 to the same person in the same year — that is $36,000 total — and neither of you files a return. This is called gift splitting, and it requires both spouses to consent on the return if either one gives more than the limit.

Key Takeaways

  • The 2024 annual exclusion is $18,000 per recipient, and you can give this amount to any number of people without filing a gift tax return.
  • Married couples can each give $18,000 to the same person, totaling $36,000, through gift splitting.
  • Gifts that exceed the annual exclusion must be reported on Form 709, but you typically do not owe tax unless you have already used your lifetime exemption.
  • Certain gifts do not count toward the limit at all, including direct payments for tuition and medical expenses, and gifts to spouses and charities.
  • The annual exclusion amount changes most years due to inflation, so you should check the current limit before making large gifts.

What happens when you give more than $18,000 to one person

If you give $25,000 to your adult child in 2024, the first $18,000 is covered by the annual exclusion. The remaining $7,000 is a taxable gift. You must file Form 709 to report it, but you do not owe any tax on it right away — instead, it counts against your lifetime exemption.

Your lifetime exemption is the total amount you can give away (or leave at death) before federal gift and estate tax actually applies. For 2024, that limit is $13.61 million per person. So if you give away $7,000 over the annual exclusion, you have $13.603 million left in your lifetime exemption. You only owe tax if you exceed that $13.61 million total.

The lifetime exemption is set to drop significantly after 2025 — it is scheduled to fall to roughly $7 million per person (adjusted for inflation) unless Congress changes the law. This is important if you are planning large gifts: giving away money now uses your current, higher exemption rather than a lower one later.

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

Some gifts are completely exempt from the annual exclusion and do not count toward it at all. The most common are direct payments for tuition or medical expenses. If you pay a university directly for your grandchild's tuition, or pay a hospital directly for your parent's surgery, those payments do not use any of your $18,000 limit — you can make them in addition to the annual exclusion gift.

Gifts to your spouse (if they are a U.S. citizen) have no limit and do not count toward the annual exclusion. Gifts to registered charities also have no limit. Gifts to political organizations and candidates are treated differently under campaign finance law, not gift tax law.

Gifts of future interests — such as the right to use a vacation home starting in five years — are generally not covered by the annual exclusion. Only gifts of present interests (the ability to use or enjoy something right now) may have access to. This distinction matters most when you are setting up trusts or complex arrangements.

How to report gifts over the annual exclusion

If you give more than $18,000 to one person in 2024, you file Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return. You submit it with your federal income tax return (Form 1040) by April 15 of the following year, or by October 15 if you file an extension.

Form 709 requires you to list each gift over the annual exclusion, the date, the recipient's name and address, and the value of the gift. You also declare whether you and your spouse are splitting the gift (if applicable). The form calculates how much of your lifetime exemption you have used.

Filing Form 709 does not mean you owe tax that year. It straightforward documents the gift for the IRS. You only owe tax if your total lifetime gifts exceed $13.61 million. Many people file Form 709 and owe nothing because they are still well below their lifetime exemption.

How the annual exclusion works for married couples

If you are married, you and your spouse are treated as separate people for gift tax purposes. Each of you has your own $18,000 annual exclusion and your own $13.61 million lifetime exemption. This means you can give $36,000 to your adult child together — $18,000 from each spouse — without either of you filing a return.

Gift splitting allows you to treat a gift from one spouse as if it came equally from both, even if only one spouse gave the money. For example, if you give $36,000 from your bank account to your child, you can split it so that $18,000 is treated as coming from you and $18,000 as coming from your spouse. Both spouses must consent to the split, usually by both signing Form 709 if the gift exceeds the annual exclusion.

Gift splitting is useful when one spouse has more assets or income than the other. It lets you use both spouses' annual exclusions and lifetime exemptions, which doubles the amount you can give tax-free.

State gift tax and the federal limit

The $18,000 annual exclusion is a federal limit. Most states do not have a separate gift tax, so you only need to worry about the federal rules. However, a few states — including Connecticut, Delaware, Illinois, Louisiana, Mississippi, New York, North Carolina, and Tennessee — have their own estate taxes that may affect very large estates, though they do not typically impose a separate gift tax during your lifetime.

If you live in one of these states or are giving to someone in one of these states, the federal annual exclusion still applies. You do not need to file separate state gift tax returns for gifts under $18,000 per person. For gifts over that amount, check your state's rules, as some states may have different reporting requirements.

How inflation changes the annual exclusion each year

The IRS adjusts the annual exclusion for inflation every year. It rounds to the nearest $1,000. The exclusion was $17,000 in 2023, jumped to $18,000 in 2024, and will likely be $18,000 again in 2025 unless inflation pushes it higher. The IRS announces the new limit in late October or early November of each year.

The lifetime exemption also adjusts for inflation. It was $12.92 million in 2023 and is $13.61 million in 2024. Both numbers are per person, so a married couple has a combined lifetime exemption of $27.22 million in 2024.

If you are planning a large gift, it is worth checking the current year's limits on the IRS website before you transfer money. The limits change, and using the wrong number could mean filing an unnecessary return or miscalculating how much of your exemption you have left.

Frequently Asked Questions

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

Yes. You can give $18,000 to as many different people as you want in 2024 without filing Form 709. The limit applies per recipient, not per year total. If you give $18,000 to your child, $18,000 to your grandchild, and $18,000 to your sibling, you do not file a return.

What if I give someone $20,000 — do I owe tax on the extra $2,000?

No, you do not owe tax. The $2,000 over the annual exclusion counts against your $13.61 million lifetime exemption, but you only owe actual tax if you exceed that lifetime limit. You must file Form 709 to report the $2,000, but no tax is due unless you have already used up your lifetime exemption.

Do gifts to my spouse count toward the $18,000 limit?

No. Gifts to a U.S. citizen spouse have no limit and do not count toward the annual exclusion. You can give your spouse any amount without filing a return or using any of your lifetime exemption.

If I pay my grandchild's college tuition directly to the university, does that count toward the $18,000 limit?

No. Direct payments for tuition to an educational institution are completely exempt from the annual exclusion. You can pay tuition in addition to giving your grandchild $18,000 in cash or other gifts, and the tuition payment does not count toward the limit.

What happens to my unused annual exclusion if I do not use it in 2024?

The annual exclusion does not carry over. If you give only $10,000 to someone in 2024, you do not get to give $26,000 in 2025 (the $8,000 unused plus the new year's $18,000). Each year's exclusion is separate and resets on January 1st.