What's the 2025 Gift Tax Limit?
The gift tax limit will change in 2025. Learn how the gift tax works, what counts as a gift, who pays taxes on gifts and where to find more information from the IRS.
In the U.S., you can gift up to $19,000 to anyone you wish in 2025 — and neither of you will pay taxes on the gift, in most cases. Learn more about the gift tax limit, how it works, and what happens if you give more than this amount.
- The IRS announced a higher gift tax exclusion for 2025 of $19,000.
- You can give away up to $13.99 million over your lifetime, as of 2025.
- Carefully review rules, limits and exclusions when thinking about a cash, stock or other property gift and consult with a tax professional.
Who Pays Taxes on Gifts?
In October 2024, the IRS announced an exclusion for calendar year 2025, up from $18,000 for calendar year 2024.
Gift and estate taxes could potentially apply to cash transfers, or transfers of property or other assets from one living person to another. The person giving the gift pays taxes on the gift. The person receiving the gift does not have to declare it as income in most cases.
This gift tax exclusion has increased almost 27% since 2021, rising with inflation.
| Year | Annual exclusion | |
|---|---|---|
2025
|
$19,000
|
|
2024
|
$18,000
|
|
2023
|
$17,000
|
|
2022
|
$16,000
|
|
2018-2021
|
$15,000
|
The exclusions are per person — and you can gift up to $19,000 to as many people as you wish without needing to file extra paperwork.
Exclusions are doubled for married couples who file the appropriate tax paperwork. So, a married couple can make a gift of $38,000 in 2025 if they elect "gift splitting" on IRS paperwork.
Gifts from one spouse to another are generally excluded from gift tax altogether. However, if you're a non-citizen, you must file a gift tax return — Form 709 United States Gift (and Generation-Skipping Transfer) Tax Return — if you gave gifts to a spouse who is not a U.S. citizen that totals more than $185,000 in 2024.
What's the Definition of a Gift?
The gift tax applies to transfers of:
- Cash
- Stocks
- Bonds
- Real estate anywhere in the world
- Businesses
Crowdfunding donations may be treated as gifts or income for the recipient. If you receive a 1099-K after a crowdfunding campaign on your or someone else's behalf, read the IRS expectations for paying taxes on crowdfunded money.
Some gifts may be taxable or receive special treatment. These can include gifts that are:
- Charitable gift annuities
- From foreign entities
- From your employer
- Received when you were a host of a sales party or event
- For opening a financial institution account
- Received from other sources
- Producing income such as interest, dividends or rent
Whether the amount is taxable can depend on the amount involved, gift type and who gave it to you. You can use the IRS's Is the Gift I Received Taxable tool to learn more.
For example, capital gains taxes may apply to property or stock gains accrued by the living donor. Capital gains taxes could also apply to gains accumulated by the recipient before the underlying asset is disposed of, when the donor passes away.
What If I Must Pay the Gift Tax?
If you give more than $19,000 to someone in 2025 or $18,000 in 2024, you will likely file a gift tax return, but you might not need to send extra money to the IRS.
You file the gift tax return in the year following the gift year. So, if you give a gift higher than $18,000 in 2024, you must file a gift tax return (Form 709) by April 15, 2025. If you give a gift higher than $19,000 in 2025, you must file a gift tax return by April 15, 2026.
You cannot normally deduct the value of your gifts to another person on your annual income tax return. The one exception is gifts you make to a 501(c)3, which are tax-deductible charitable contributions. You must itemize to take this deduction.
Exceptions to Gift Taxes
A few exceptions allow you to give more than $19,000 without filing Form 709:
- School tuition
- Medical expenses paid for someone
- Gifts to your spouse; your spouse is defined by state law
- Gifts to a political organization
- Charitable donations
There are more complicated exceptions, too. For example, a large contribution made in one year to a qualified tuition program (also known as a 529) can be treated as if made over a 5-year period. To make this claim, you must file the proper paperwork and can only contribute up to a specific dollar threshold. Consult with a tax professional for details regarding the specific rules for any of these exceptions to gift taxes.
Examples
Amy gives $3,000 to a 16-year-old niece at Christmas to help buy a new car. Because this amount is under the gift tax threshold, Amy doesn't pay taxes on the $3,000. Neither does her niece.
Tyson wants to give $50,000 to his nephew to help pay off medical debt after a serious accident. Any gift amount over $19,000 counts toward his lifetime limit and will require Tyson to file Form 709.
However, a friend tells Tyson that if he pays the medical debt directly, he may be able to avoid that step. Tyson decides to meet with a CPA to learn more about his options.
Annual Gift Tax vs. Lifetime Gift Tax
If you give more than $19,000 in 2025 to any one person, the amount over the limit will count toward your lifetime gift tax limit or basic exclusion amount (BEA).
This credit is first applied against the gift tax, when you make taxable gifts while still alive. If any credit remains at death, the credit is applied against the estate tax.
The tax reform law temporarily doubled the BEA for 2018 through 2025.
| Year of Death | Exclusion Amount | |
|---|---|---|
2025
|
$13,990,000
|
|
2024
|
$13,610,000
|
|
2023
|
$12,920,000
|
|
2022
|
$12,060,000
|
|
2021
|
$11,700,000
|
|
2020
|
$11,580,000
|
|
2019
|
$11,400,000
|
|
2018
|
$11,180,000
|
|
2017
|
$5,490,000
|
As with the annual tax exclusion, married couples can combine their BEA and give away twice as much.
Gift Tax Rates
Gift tax rates range from 18% to 40%, depending on the amount that exceeds the limit. According to the IRS, the amounts are:
| Taxable amount over | Taxable amount not over | Tax rate on amount | |
|---|---|---|---|
$0
|
$10,000
|
18%
|
|
10,000
|
20,000
|
20%
|
|
20,000
|
40,000
|
22%
|
|
40,000
|
60,000
|
24%
|
|
60,000
|
80,000
|
26%
|
|
80,000
|
100,000
|
28%
|
|
100,000
|
150,000
|
30%
|
|
150,000
|
250,000
|
32%
|
|
250,000
|
500,000
|
34%
|
|
500,000
|
750,000
|
37%
|
|
750,000
|
1,000,000
|
39%
|
|
1,000,000
|
And up
|
40%
|
However, some exclusions may apply, and you may also need to pay state tax, capital gains or generation-skipping taxes for larger amounts. Review your estimated tax with a tax professional.
Gift taxes are assessed to prevent people from giving away all of their savings while still alive as a way to avoid incurring estate taxes.
Takeway on Gift Taxes
To minimize paperwork and confusion, keep cash gifts under the annual limit. For more complicated property or larger amounts, speak with a financial advisor or CPA to get insight on how to gift the right way and minimize your tax liability.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized financial, tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation when making financial, legal, tax, investment, or any other business and professional decisions that affect you and/or your business.
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Lora Shinn
Contributor