Gift Tax Limit 2026: How Much Money Can You Gift?

For 2026, the annual gift tax exclusion remains $19,000. This means you can give up to $19,000 to as many people as you want in 2026 without any of it being subject to the federal gift tax. The gift tax is imposed by the IRS if you transfer money or property in excess of the exempt amount to another person without receiving at least equal value in return. This could apply to parents giving money or property to their children. While the annual exclusion stays the same, the lifetime exemption rises to $15 million in 2026.

For help with the gift tax or other areas of wealth management, consider working with a financial advisor.

Annual Gift Tax Exclusion

The annual gift tax exclusion of $19,000 for 2026 is the amount of money that you can give as a gift to one person, in any given year, without having to pay any gift tax. This limit rose from $18,000 in 2024 to $19,000 in 2025, where it will remain in 2026.

The annual gift exclusion limit applies on a per-recipient basis. This gift tax limit isn’t a cap on the total sum of all the gifts you make in a year. You can make individual gifts of up to $19,000 to as many people as you want. You just cannot gift any one recipient more than $19,000 within one year without deducting the excess from your lifetime exemption. If you’re married, you and your spouse can each gift up to $19,000 to any one recipient, bringing the total to $38,000 for 2026 in this scenario.

If you gift more than the exclusion to a recipient, you will need to file tax forms to disclose those gifts to the IRS. You may also have to pay taxes on it. If that’s the case, the tax rates range from 18% up to 40%. However, you won’t have to pay any taxes as long as you haven’t hit the lifetime gift tax exemption.

Lifetime Gift Tax Limits

Most taxpayers will never owe federal gift tax because the IRS allows a combined lifetime estate and gift tax exemption of $15 million (as of 2026). Gifts made during your lifetime count against this same exemption that also applies to assets transferred at death, meaning amounts you give away reduce how much of your estate can later pass tax-free. This is the lifetime gift tax exemption, which increased significantly (from $13.99 million in 2025) under the One Big Beautiful Bill Act signed into law in July 2025.

So let’s say that in 2026 you give $220,000 to a family member. This gift is $201,000 over the annual gift exclusion, meaning you’ll need to report it to the IRS. However, you won’t immediately have to pay tax on that gift. Instead, the IRS deducts that $201,000 from your lifetime gift tax exemption.

So assuming you never made any other gifts that exceed the annual exemption, your remaining lifetime exemption is now $14.799 million ($15 million – $201,000). The table below breaks down this example:

Gift Value	$220,000
2026 Gift Tax Exclusion	$19,000
Taxable Amount	$201,000
Lifetime Gift Tax Exemption Limit	$15,000,000
Remaining Lifetime Exemption Limit	$14,799,000

Most taxpayers will not reach the gift tax limit of $15 million over their lifetimes. However, the lifetime gift tax exemption becomes important again when you die and pass on an estate.

How the Gift Tax Works

The IRS defines a gift as “any transfer to an individual, either directly or indirectly, where full consideration is not received in return.” In other words, if you write a big check, gift some investments or give a car to someone other than your spouse, you have made a gift.

The IRS has a gift tax limit, both for the amount you can give each year and for what you can give over the course of your life. If you go over those limits, you will have to pay a tax on the amount of gifts that are over the limit. This tax is the gift tax.

In almost every case, the donor is responsible for paying gift tax, not the recipient. A recipient will only pay gift tax in special circumstances where he or she has elected to pay it through an agreement with the donor. Even though recipients don’t face any immediate tax consequences, they can face capital gains tax if they sell gifted property down the line.

There are two numbers to keep in mind as you think about gift tax: the annual gift tax exclusion and the lifetime gift tax exemption.

How to Calculate the Gift Tax

Just like your federal income tax, the gift tax is based on marginal tax rates. Those rates range between 18% and 40%. If you want to calculate the taxable income for gifts exceeding the annual exclusion limit, the table below breaks down the rate that you will have to pay based on the value of the gifts.

2026 Gift Tax Rates

Gift Value Above the Annual Exclusion Limit	Rate
Up to $10,000	18%
$10,001 to $20,000	20%
$20,001 to $40,000	22%
$40,001 to $60,000	24%
$60,001 to $80,000	26%
$80,001 to $100,000	28%
$100,001 to $150,000	30%
$150,001 to $250,000	32%
$250,001 to $500,000	34%
$500,001 to $750,000	37%
$750,001 to $1,000,000	39%
More than $1,000,000	40%

Gift Tax and Estate Tax

The gift and estate taxes share one lifetime exemption, so taxable gifts made during life reduce what’s available at death.

The federal gift tax and estate tax operate under one unified system because both draw from the same lifetime exemption. The gift tax applies to certain transfers you make during life, while the estate tax applies to what you leave behind at death. Each taxable gift you report reduces the exemption that will be available to your estate later.

In 2026, the federal lifetime exemption is $15 million. Your estate can only use the portion of that exemption that remains after accounting for taxable gifts you have already made. For example, if you gave away $5 million in taxable gifts during your lifetime, your estate would be left with a $10 million exemption. Any amount above that figure could be subject to estate tax.

This structure exists to prevent people from avoiding estate tax by giving away assets shortly before death. However, you can still share wealth freely through the annual exclusion, which does not reduce the lifetime exemption. Certain qualified payments, such as tuition paid directly to a school or medical expenses paid directly to a provider, also fall outside the gift tax system entirely.

What Gifts Are Safe From Taxes?

Taxable gifts can include cash, checks, property and even interest-free loans. It also applies to anything you sell below fair market value. For instance, if you sell your home to your non-dependent child for $175,000 when it’s worth $250,000, the $75,000 difference could be considered a gift. That surpasses the annual gift tax limit and thus is deducted from your lifetime gift tax limit.

What constitutes a gift that counts toward your gift tax limit is generally easy to understand. There are several things that the IRS doesn’t consider a gift, however. You can give unlimited gifts in these categories without facing a gift tax or having to file gift tax paperwork:

Anything given to a spouse who is a U.S. citizen
Support for a dependent
Charitable donations to qualified organizations
Political donations
Funds paid directly to educational institutions on behalf of someone else
Funds paid directly to medical service or health insurance providers on behalf of someone else

There are, of course, a few exceptions to keep in mind. If your spouse is not a U.S. citizen, you can only give them up to $194,000 in 2026. Anything above that is subject to gift tax and counts against your lifetime limit.

Funds that cover educational expenses refer only to tuition. That does not include books, dorms or meal plans. You can skirt the gift tax by contributing to someone’s 529 college savings plan with a lump sum and then spreading it over five years for tax purposes. The IRS allows taxpayers to contribute up to $95,000 to a 529 plan (per beneficiary) without paying tax or reducing your lifetime limit. The only caveat is that any additional gifts for the same recipient will count toward your lifetime limit.

Lastly, it’s important to note that charitable donations are not only exempt from gift tax, they may also be eligible as an itemized deduction on your individual income tax return.

How to File Your Gift Tax Return

The first step in paying gift tax is reporting your gift. Complete IRS Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, on or before your tax filing deadline. Download the document, complete each relevant line and sign and date along the bottom. You then send the form in with the rest of your tax return.

You should complete Form 709 anytime you gift in excess of $19,000, even if you’re within the $15 million lifetime limit for 2026. You’ll have to file a Form 709 each year you give a reportable gift, and each form should list all reportable gifts made during the calendar year.

If you live in Connecticut, you may also have to file a state gift tax return. This is the only state that has its own gift tax. In most cases, you can file a gift tax return on your own.

Gift Tax Checklist for Givers and Recipients

Gifts shift ownership, but they do not automatically trigger income tax for the person receiving them. Under federal tax rules, the obligation to track and report a gift generally rests with the person making it, not the recipient. A transfer may be treated as a gift even when no cash changes hands, such as discounted property sales, forgiven loans or assets transferred without full compensation. Identifying whether a transfer qualifies as a gift is the starting point for both sides.

For individuals giving a gift, the key issue is reporting, not immediate payment. Gifts that exceed the annual exclusion amount must be disclosed on a federal gift tax return. Filing this form does not usually result in tax due, but it reduces the giver’s remaining lifetime estate and gift tax exemption. Once the gift is completed, the giver gives up control of the asset, which can affect cash flow, future planning and estate structure.

Recipients should focus on the tax characteristics that transfer with the asset. Most lifetime gifts retain the original owner’s cost basis, meaning future capital gains are calculated using what the giver paid, not the value on the date of transfer. This becomes relevant only if the asset is sold later, but missing basis records can create higher taxable gains. Gifts of appreciated property often carry different long-term consequences than gifts of cash.

Both parties should also account for asset type and location. Certain transfers, such as retirement accounts, trust interests or business ownership, follow rules that differ from standard gifts. State-level tax treatment can also vary, particularly when the giver or recipient lives in a state with inheritance or transfer taxes. Reviewing documentation, valuation and timing before completing the transfer helps prevent reporting errors and unexpected tax outcomes later.

Bottom Line

Gifts above the annual limit only reduce your lifetime gift and estate tax exemption.

The IRS allows every taxpayer to gift up to $19,000 to an individual recipient in one year. There is no limit to the number of recipients you can give a gift to. There is also a lifetime exemption of $15 million. Even if you gift someone more than $19,000 in one year, you will not have to pay any gift taxes unless you go over that lifetime gift tax limit.

You will still need to report gifts over the annual exclusion to the IRS via Form 709. The IRS will lower your remaining lifetime exclusion over time and then use that amount to determine how much of your estate is subject to estate tax.

Tips for Getting Through Tax Season

Working with a financial advisor throughout the year may potentially make tax season run smoother for you. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Any charitable donations that you make are tax deductible. As you plan for your taxes, it’s important to keep track of your potential deductions throughout the year. They could save you money if you make deductions worth more than the standard deduction.
One way to maximize your deductions is to use the right tax filing service. Two of the best filing services, H&R Block and TurboTax, both offer tools to help you maximize your deductions. And while both services are easy-to-use, certain taxpayers may prefer one over the other. Here’s a breakdown of H&R Block vs. TurboTax to help you decide which is best for you.