2026 gift tax limits at a glance
| 2026 | 2025 | |
|---|---|---|
| Annual exclusion, per recipient | $19,000 | $19,000 |
| Annual exclusion for a married couple splitting gifts | $38,000 | $38,000 |
| Lifetime exemption (shared with the estate tax) | $15,000,000 | $13,990,000 |
| Gifts to a spouse who is a U.S. citizen | Unlimited | Unlimited |
| Gifts to a spouse who isn't a U.S. citizen | $194,000 a year | $190,000 |
| 529 plan "superfunding" (5 years at once) | $95,000 per beneficiary | $95,000 |
| Top gift and estate tax rate | 40% | 40% |
The annual exclusion stayed at $19,000 for 2026 because inflation wasn't enough to push it to the next $1,000 step. The lifetime exemption jumped to $15 million under the 2025 tax law, which also made it permanent and indexed for inflation from 2027.
How the $19,000 annual exclusion works
You can give up to $19,000 in 2026 to each person, as many people as you want, without filing a gift tax return or using any of your lifetime exemption. A couple with three children and their spouses could give six people $38,000 each, $228,000 in total, with nothing to report as long as no single gift goes over the limit (and a married couple who splits gifts files the return described below).
Some payments don't count at all:
- Tuition paid directly to a school and medical bills paid directly to the provider, in any amount.
- Gifts to your spouse, if they're a U.S. citizen.
- 529 superfunding: you can put five years of exclusions, $95,000 per child or grandchild ($190,000 for a couple), into a 529 plan in one year and elect to spread it over five years on Form 709.
The $15 million lifetime exemption
Go over $19,000 to one person and the excess is a "taxable gift," but you almost certainly won't owe anything. It's subtracted from your lifetime exemption, which is $15,000,000 in 2026. That exemption is shared with the estate tax, so whatever you use on gifts during your life is no longer available to your estate. Gift tax at 40% only applies once your lifetime taxable gifts pass $15 million.
- Married couples effectively have $30 million together.
- Portability: a surviving spouse can use the unused exemption of the first spouse to die, but only if the executor files an estate tax return (Form 706) to elect it, even when no tax is due.
- No clawback: if Congress ever lowers the exemption, gifts you've already made under the higher amount won't be taxed retroactively.
For most families the federal gift tax is a paperwork question, not a tax question. Our guide to estate and inheritance taxes by state covers the states where much lower thresholds apply.
When you have to file Form 709
You need to file a gift tax return (Form 709) for 2026 if you:
- Gave any one person more than $19,000 (other than tuition, medical or a citizen spouse)
- Want to split gifts with your spouse, even if each half is under $19,000. Each spouse files their own return.
- Gave a "future interest," such as a gift into most trusts, of any amount
- Gave a non-citizen spouse more than $194,000
- Elected 529 five-year averaging
The return for 2026 gifts is due April 15, 2027. Extending your income tax return also extends Form 709. For a gift of real estate, include a qualified appraisal and the property's legal description. That "adequate disclosure" starts a three-year clock after which the IRS can't challenge the value.
Gifting a house: the tax that actually bites
Here's the example most families should run before signing over a deed. A widowed parent gives their child a house worth $600,000 that the parent bought decades ago for $150,000.
The gift tax part: zero
- Taxable gift: $600,000 − $19,000 annual exclusion = $581,000
- That's taken off the parent's $15 million lifetime exemption, leaving $14,419,000
- Gift tax due: $0. A Form 709 is required by April 15, 2027.
The capital gains part: $75,000
A gift comes with the giver's original basis. The child's basis is $150,000, not $600,000. If the child later sells for $650,000:
- Gain: $650,000 − $150,000 = $500,000
- Federal tax at 15%: $75,000, possibly more if part of it falls into the 20% bracket or the 3.8% investment income tax, plus state tax
If the child moves in and lives there two of the five years before selling, they can use the $250,000 home sale exclusion, which helps but doesn't erase it. See our 2026 capital gains rates.
If the child inherits it instead: about $7,500
Inherited property gets a stepped-up basis equal to its value at death. If the house is worth $600,000 when the parent dies and the child sells for $650,000, the gain is $50,000, and the tax at 15% is about $7,500. That's $67,500 less than the gift route. The $600,000 simply counts against the parent's $15 million estate exemption, so no estate tax is due either.
That gap is why most planners suggest leaving appreciated real estate at death rather than giving it away, using a transfer on death deed, a lady bird deed or a living trust to avoid probate. A deed where the parent keeps a life estate also gets the step-up, because the house is pulled back into the parent's estate, but the gift itself is valued under special rules, so get advice before using one.
Gifting a house can raise the property tax too
In several states, the transfer resets the home's assessment, so the child can end up with a much larger tax bill than the parent had.
- California: under Prop 19, a gift from parent to child keeps the parent's low assessed value only if the child makes it their primary residence and files for the homeowners' exemption within a year, and only up to the parent's assessed value plus $1,044,586 (for transfers from February 16, 2025 to February 15, 2027). Rentals and second homes are reassessed at market value. See our Prop 13 and Prop 19 guide.
- Florida: a change of ownership ends the Save Our Homes cap. The home is reassessed at full market value the next January 1, which can multiply the bill for a long-held house. The child can claim their own homestead exemption if they live there. See Save Our Homes.
- Michigan: a transfer normally "uncaps" taxable value, but transfers of a residence to close relatives (children, grandchildren, siblings, parents) are exempt from uncapping as long as the home isn't used commercially.
- Texas and most other states: the parent's homestead and senior exemptions don't transfer. The child has to apply for their own, and loses any senior freeze the parent had. See the Texas homestead guide.
Our guide to property taxes on an inherited house covers how these rules apply at death, which is often more generous than for a gift.
State gift taxes
Connecticut is the only state with its own gift tax. Its exemption matches the federal one, $15 million for 2026 (counting Connecticut taxable gifts since 2005), with a flat 12% rate above that, and nonresidents owe it on gifts of Connecticut real estate. You only file the state return if you have to file the federal one.
Two states with an estate tax add recent gifts back in. New York adds taxable gifts made within three years of death to the estate (except gifts of real estate located outside New York), and Minnesota does the same with gifts made within three years of death. Since both states' estate tax thresholds are far below $15 million, deathbed gifts don't avoid their estate taxes.
Sources
2026 and 2025 amounts are from IRS Revenue Procedure 2025-32 and the IRS's estate and gift tax pages and FAQs. Filing rules are from the Instructions for Form 709. Basis rules are from Internal Revenue Code sections 1014 and 1015. State rules are from the Connecticut Department of Revenue Services, Minn. Stat. § 291.016, N.Y. Tax Law § 954, the California State Board of Equalization (news release NR-25-02), Fla. Stat. § 193.155 and Michigan's State Tax Commission guidance. This is general information, not tax or legal advice.