Gifts and estates
Gift tax limit for 2026: the annual and lifetime exclusions
In 2026 you can give up to $19,000 to each person, to as many people as you like, without filing a gift tax return; a married couple can give $38,000 to each person. Giving more than that usually means filing Form 709, but tax is owed only after your lifetime gifts pass $15 million, the 2026 exemption, which is shared with the estate tax. Most people never pay gift tax.
The numbers
The giver, not the recipient, pays any gift tax. A gift is not taxable income to the person who receives it, and they do not report it on their return.
| Item | 2025 | 2026 |
|---|---|---|
| Annual exclusion, per recipient | $19,000 | $19,000 |
| Married couple splitting gifts, per recipient | $38,000 | $38,000 |
| Gifts to a spouse who is not a U.S. citizen | $190,000 | $194,000 |
| Lifetime gift and estate exemption, per person | $13,990,000 | $15,000,000 |
| Generation-skipping transfer exemption | $13,990,000 | $15,000,000 |
| Top gift and estate tax rate | 40% | 40% |
How the annual and lifetime exclusions work together
Gifts up to $19,000 per recipient per year are simply ignored. Only the part above that counts, and it is subtracted from your lifetime exemption instead of being taxed. Tax is due only once your total taxable gifts over your lifetime, plus your estate at death, pass the exemption.
Example: in 2026 you give your daughter $50,000 toward a house. $31,000 is over the annual exclusion, so you file Form 709 and use $31,000 of your $15 million exemption. You pay no tax, and she owes nothing.
Example: a married couple gives each of their three children $38,000 in 2026, $114,000 in all. If each spouse gives $19,000 from their own money, no gift tax return is needed. If the money comes from one spouse’s account and they split the gifts, they must file Form 709 to elect it, still with no tax.
What does not count as a gift
These do not use any of your annual exclusion or lifetime exemption.
- Tuition paid directly to a school, and medical bills paid directly to the provider, for anyone, in any amount. Paying the person instead, so they can pay the bill, does count.
- Gifts to your spouse, if your spouse is a U.S. citizen. For a non-citizen spouse the annual limit is $194,000 in 2026.
- Gifts to qualifying charities, which are deductible, and to political organizations for their use.
Filing Form 709
You must file Form 709 for a year in which you gave anyone other than your spouse more than $19,000, gave a future interest such as certain trust gifts, or want to split gifts with your spouse, even if no tax is due. Each spouse files their own; there is no joint gift tax return.
Form 709 for 2026 gifts is due April 15, 2027. An extension of your income tax return on Form 4868 also extends the gift tax return, but not the time to pay any gift tax.
For a 529 college savings plan, you can elect to treat a contribution of up to $95,000 for one beneficiary as made evenly over five years, which keeps it within the annual exclusion. The election is made on Form 709.
Illinois: no gift tax, but an estate tax
Illinois does not tax gifts on their own. It does have an estate tax, and the Illinois Attorney General gives the exclusion amount as $4 million, far below the federal $15 million. Taxable gifts made during life are added back when deciding whether an estate is over it. Bills to raise the Illinois amount have been introduced; check the current figure before planning around it.
File Form 709 the right way
USTAXX prepares gift tax returns, including gift splitting and the five-year 529 election, alongside your income tax return. In Naperville, IL, or remotely.
Questions people ask
How much can you gift tax-free in 2026?
$19,000 per person per year without a return, or $38,000 for a married couple. Above that you file Form 709, but no tax is due until lifetime gifts pass $15 million.
What is the gift tax limit for 2027?
Not published yet. The IRS announces the next year’s annual exclusion and lifetime exemption in its inflation update each fall.
Do I pay tax on money I receive as a gift?
No. Gifts are not income to the recipient. If any gift tax is owed, the giver pays it. Income the gift later earns, such as interest, is taxable to you.
What is the lifetime gift tax exemption for 2026?
$15 million per person, $30 million for a married couple, shared between lifetime gifts and the estate at death. The 2025 law set it at $15 million for 2026 and indexes it for inflation after that.
Do I need to report a gift to my child for a down payment?
Only the giver reports it, and only the part over $19,000 per giver. Two parents can give $38,000 from their own funds without a return. Lenders may ask for a gift letter, which is separate from tax.
Where these rules come from
- IRS: Frequently asked questions on gift taxes
- IRS: Instructions for Form 709
- IRS Rev. Proc. 2025-32: 2026 amounts (sections 2.14 and 4.42)
- IRS Rev. Proc. 2024-40: 2025 amounts
- Illinois Attorney General: Illinois estate tax fact sheet
General information, current when written, not advice about your situation. Fees and forms change; the official pages above are the authority.