High earners · Gift tax
The 2026 gift tax limit lets you give $19,000 to each person without filing a return.
That $19,000 is the annual gift tax exclusion for 2026. Give one person more, and you report the excess on Form 709 as a taxable gift. No tax is due until your taxable gifts, added up over your life, pass the $15 million lifetime exemption.
Updated · Sources
Gifts made in 2026
- $19,000
- per person is excluded, or $38,000 when you and your spouse split a gift.
- $15M
- is the lifetime exemption, which your taxable gifts share with your estate.
- 40%
- is the tax on taxable gifts above the exemption, and the giver pays it.
The annual exclusion resets each calendar year, so complete 2026 gifts by December 31. A gift by check should be deposited by then. Form 709 for 2026 gifts is due April 15, 2027, and an income tax extension extends it too.
Do you need to file a gift tax return for 2026?
You file Form 709 if any one of these applies, whether or not any tax is due.
More than $19,000 to one person
If your 2026 gifts to one person total more than $19,000, they go on the return. Stock and other property count at fair market value on the day you give them. For listed stock, that is the average of the day’s high and low prices.
A gift the person cannot use yet
A gift the person can use only later is a future interest, so it gets no annual exclusion. Many gifts to a trust are future interests, and they go on Form 709 at any size. Section 2503(c) lets a minor’s trust get the exclusion if it can spend the gift on them and pays out the rest at 21.
A gift split with your spouse
If you and your spouse are both US citizens or residents, a gift from one of you can count as made half by each. Splitting always takes a Form 709, even when each half is under $19,000. You must both agree, and the choice then covers every gift either of you makes to others that year.
A 529 contribution spread over five years
A 529 plan contribution above the annual exclusion can count as made evenly over five years. For 2026, that covers up to $95,000 per beneficiary, or $190,000 if you and your spouse split it. It uses your annual exclusion for that person in each of the five years. You make the choice on Form 709.
Some transfers let you avoid gift tax and the return at any size. Outright gifts to a spouse who is a US citizen are fully deductible. Tuition paid straight to a school, and medical bills paid straight to the provider, are not gifts. Only tuition qualifies, so room and board, and 529 contributions, still count as gifts.
You owe no gift tax on $75,000 toward a down payment.
Splitting a $75,000 gift with your spouse uses $19,000 less lifetime exemption, though each of you then files a return.
The gift
$75,000
Cash he can use now is a present interest, so the annual exclusion applies.
Taxable if you give alone
$56,000
The exclusion covers $19,000, and you report the rest on Form 709.
Taxable if your spouse splits it
$37,000
Each of you is treated as giving $37,500, so each has a taxable gift of $18,500.
Gift tax to pay
$0
Your lifetime exemption covers the tax either way.
These are 2026 figures for US citizens. Giving alone leaves $14,944,000 of the $15,000,000 exemption. When you split the gift, both returns are needed because the gift to one person is over $38,000.
How did the lifetime gift tax exemption change from 2025 to 2026?
From 2018 through 2025, the lifetime gift tax exemption started from a $10 million base and rose with inflation each year. The One Big Beautiful Bill Act raised it to $15 million for 2026.
| 2025 | 2026 | |
|---|---|---|
| Lifetime exemption | $13,990,000 | $15,000,000 Indexed for inflation from 2027 |
| Annual exclusion | $19,000 | $19,000 |
| With gift splitting | $38,000 | $38,000 |
| Spouse not a US citizen | $190,000 | $194,000 Unlimited for a US citizen |
| Scheduled end | A cut to about half in 2026 | None Congress can still change it |
As of September 2026, the IRS has not published the 2027 gift tax limits. It usually does so in the fall, and the annual exclusion can rise only in whole steps of $1,000. Gifts to grandchildren can also bring the generation-skipping transfer (GST) tax, which has its own $15 million exemption for 2026.
Where a tax-free gift can still cost you.
You skip Form 709 because no tax is due
Leave a required gift off Form 709, and the IRS can assess gift tax on it at any time. The usual three-year limit starts only once the gift is adequately disclosed on a return.
You give stock with a large gain
Stock you bought for $100,000 and give away at $1 million hands the recipient your $900,000 gain. Left to them at death, the same shares carry none.
You give ISO or ESPP shares too soon
Giving away ISO or ESPP shares before their holding periods end counts as a disposition, the same as a sale. You then owe income tax on the full spread at exercise or purchase, even if the price has fallen. A gift of ESPP shares after the holding periods still gives you ordinary income, up to the plan’s discount.
You lend the down payment instead
An interest-free or below-market loan can be a gift, under the Form 709 instructions. So can selling your child something for less than it is worth, even if no one calls it a gift.
You live in Connecticut
Connecticut is the only state with a gift tax, and its 2026 exemption is also $15 million. A resident who makes a taxable gift files a state gift tax return too, even with no tax due.
A CPA plans a large gift before you make it, and files the Form 709 after.
Valim is a CPA firm: your estate attorney drafts any trust, and we handle the tax side.
- We prepare and file your Form 709 and carry forward your earlier gifts, so you know how much exemption is left.
- We compare ways to give, such as splitting a gift or spreading it over several years.
- We check shares before you give them, for the gain they carry and any ISO or ESPP holding period.
- When a gift goes to a trust, we prepare the trust’s own income tax returns.
- If the IRS questions a Form 709 we prepared, our reply is included in your fee.
- Individual return
- from $195
- Business return
- from $495
We quote Form 709 as a flat fee before work starts. A CPA quotes a trust’s return after reading the trust document. We do not bill hourly.
Gift tax questions.
How much can I give each child tax-free in 2026?
You can give each child $19,000 in 2026 with no gift tax return to file. You and your spouse can give $38,000 per child with no return if each of you gives $19,000 of your own money. If one of you gives it all, splitting the gift takes a Form 709. Larger gifts go on Form 709 and use part of your $15 million lifetime exemption. No tax is due until that exemption runs out. Tuition or medical bills you pay straight to the school or provider are not gifts, so they do not use the $19,000.
Do I owe gift tax if I give my son $75,000 toward a down payment?
You owe no gift tax on $75,000 to your son unless earlier taxable gifts used up nearly all of your $15 million exemption. The first $19,000 is excluded, and you report the other $56,000 on Form 709 by April 15, 2027. That $56,000 comes off your remaining exemption. If your spouse splits the gift, each of you has a taxable gift of $18,500. You cannot deduct the gift on your income tax return.
Can you gift someone $100,000 tax-free?
Yes, you can gift someone $100,000 without paying tax, as long as your lifetime exemption is not used up. For 2026, $19,000 is excluded, and the other $81,000 goes on Form 709. If you have made no earlier taxable gifts, that leaves $14,919,000 of your $15 million exemption. If your spouse splits the gift, each of you has a taxable gift of $31,000, and you both file. If you give stock, the recipient also takes over your cost basis.
Can I give my daughter $50,000 tax-free?
Yes, you can give your daughter $50,000 without owing gift tax. If you give it on your own, $31,000 of it is a taxable gift that you report on Form 709. Your unused lifetime exemption covers the tax. If your spouse splits the gift, each of you has a taxable gift of $6,000, and you both file. Paying $50,000 of her tuition straight to her college is not a gift, so nothing is filed.
What is the lifetime gift exemption?
The lifetime gift exemption is how much you can give in taxable gifts before any federal gift tax is due. For 2026 it is $15,000,000 per person. The part of each gift above the annual exclusion uses up some of it. The estate tax draws on the same exemption, so what your gifts use is no longer there for your estate. It rises with inflation from 2027, and the law sets no end date.
How does the IRS know if you give a gift?
The IRS mostly learns of a gift because the law makes the giver report it on Form 709. After your death, your estate’s tax return adds back every taxable gift you made after 1976. If a required gift is never reported, the IRS can assess gift tax on it with no time limit. A US person who receives a large gift from a foreign person must report it too.
Sources
- 26 U.S.C. § 2503, Taxable gifts
- 26 U.S.C. § 2505, Unified credit against gift tax
- 26 U.S.C. § 2502, Rate of tax
- 26 U.S.C. § 2001, Imposition and rate of tax
- 26 U.S.C. § 2513, Gift by husband or wife to third party
- 26 U.S.C. § 2523, Gift to spouse
- 26 U.S.C. § 6501, Limitations on assessment and collection
- 26 U.S.C. § 529, Qualified tuition programs
- 26 U.S.C. § 1014, Basis of property acquired from a decedent
- 26 U.S.C. § 1015, Basis of property acquired by gifts
- 26 U.S.C. § 424, Definitions and special rules
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS, About Form 709
- IRS, Instructions for Form 709 (2025)
- IRS, Rev. Rul. 96-56 (gifts by check), Internal Revenue Bulletin 1996-50
- Public Law 119-21 (One Big Beautiful Bill Act), § 70106
- IRS, Frequently asked questions on gift taxes
- Connecticut DRS, Estate and gift tax information
Reviewed and updated September 2026. General information, not advice for your situation.