Gift Tax Limit 2027: How Much You Can Give Tax-Free, and When to File

The IRS has set the 2027 gift tax numbers: you can give $20,000 to any one person in 2027 without filing anything, up from $19,000 in 2026, and a married couple can give $40,000 to the same person. Above that, you file a form — but you almost certainly still owe nothing, because a second, lifetime allowance of $15,480,000 per person absorbs the excess first.

This guide explains both allowances in plain terms, shows what a couple with three children and two grandchildren can move in a year (and in one December–January window), and covers the exceptions that let you pay far more without touching either limit: tuition, medical bills and 529 plans.

Who this is for: US citizens and residents who help family with money — parents covering a down payment or a wedding, grandparents funding a 529, anyone giving a relative a large check or shares of stock. What it does not cover: the estate tax at death in detail, trusts, the generation-skipping transfer (GST) tax (a separate tax on very large transfers to grandchildren and trusts; plain annual-exclusion gifts to a grandchild generally do not trigger it), gifts by people who are not US residents, and charitable giving, which follows its own rules. This is general information, not legal or tax advice for your family.

The numbers2027 gift and estate limits at a glance

Two terms carry the whole article:

• The annual exclusion is the amount you can give each person each calendar year with no paperwork. It is per recipient, so it multiplies: three children and two grandchildren are five separate $20,000 allowances. It resets every January 1 and unused room does not carry forward.
• The lifetime exemption (the IRS calls it the basic exclusion amount) is one pool for your whole life, shared by gifts and by your estate when you die. Gifts above the annual exclusion draw it down; only after it is gone does gift tax, at rates up to 40%, actually apply. The 2025 tax law set it at $15 million for 2026 and indexes it to inflation from there, which is how 2027 reaches $15,480,000.

The annual exclusion rose 5.3% this time while the lifetime exemption rose 3.2%. That is not a different inflation rate: the exclusion only moves in $1,000 steps, so it sat at $19,000 for two years and jumped once the inflation adjustment crossed the next step. The same November release set the 2027 tax brackets, which rose by the same 3.2%.

Who paysThe giver, not the recipient

The single most common misunderstanding: gift tax is owed by the person who gives, not the person who receives (the IRS gift tax FAQ: "The donor is generally responsible for paying the gift tax"). The recipient does not report a gift as income on their federal return and owes no income tax on it, whatever the size. If your parents give you $50,000 toward a house, there is nothing for you to file.

What counts as a gift is broad: cash, a check, paying someone else's bill, shares of stock, a car, adding a child to the deed of a house, or lending money and later forgiving it. What does not count as a taxable gift at all:

• Gifts to a spouse who is a US citizen — unlimited. If your spouse is not a US citizen, the tax-free amount is $201,000 in 2027.
• Tuition paid directly to the school — any amount, for anyone.
• Medical bills paid directly to the provider — any amount, for anyone.
• Gifts to a political organization for its use, and gifts to qualifying charities, which are deducted on the return.

Over the limitGoing past $20,000 means a form, not a bill

Give more than $20,000 to one person in 2027 and you file Form 709, the federal gift tax return, by April 15, 2028. The return records the amount above the exclusion, and that amount comes off your lifetime exemption. No check goes to the IRS unless your lifetime taxable gifts have passed $15,480,000.

Using some exemption during your life is not free in one sense: whatever you use is no longer available against your estate at death. For the vast majority of families, whose estates are nowhere near $15 million, that never matters. If yours might be, the estate tax calculator shows what is left for heirs when you enter the exemption minus what your gifts have used.

CouplesGift-splitting and why it needs a return

A married couple has two exclusions, so $40,000 per recipient. There are two ways to use both:

• Each spouse gives from their own money. Two $20,000 gifts, each from one spouse's own funds, need no return.
• One spouse gives $40,000 and the couple elects gift-splitting. The law then treats each spouse as having given $20,000. But the election itself is made on Form 709: generally both spouses file their own return, and the other spouse signs a notice of consent. There is no joint gift tax return. Forget the return and the gift is legally one person's $40,000 gift — $20,000 over the limit.

Free roomTuition, medical bills and 529 plans

Three ways to give far more than $20,000 without touching the lifetime exemption, or (for the first two) without counting at all:

The 529 shortcut has three catches worth knowing before you write the check:

• It uses the five years' exclusions for that person. A grandparent who puts $100,000 into a grandchild's 529 in 2027 has no exclusion left for that grandchild until 2032, apart from any inflation increases in the exclusion in later years.
• Anything above $100,000 is a current taxable gift. Contribute $120,000 and $20,000 goes on that year's Form 709 against your lifetime exemption.
• If the giver dies before the five years end, the part allocated to the remaining years goes back into their estate.

For a child born from 2025 on, a 529 is not the only account family can fund; Trump Accounts take up to $5,000 a year from relatives, and the gift rules above apply to that money too.

The family mathThree children, two grandchildren, one year

Here is what a married couple can give five recipients — three adult children and two grandchildren — without any tax and, in most rows, without any form.

Three things in that table are easy to miss:

• In-laws are separate recipients. A son-in-law or daughter-in-law has his or her own $20,000 allowance from each parent. Giving a married child and spouse $80,000 jointly in 2027 uses four exclusions, not two.
• The 529 row replaces, not adds to, the grandchildren's annual gifts. Superfunding uses their 2027–2031 exclusions, so in 2027 the couple could add only the three children's $120,000 to the $400,000.
• December and January are different years. The exclusion is per calendar year. A gift completed by December 31, 2026 uses the 2026 allowance of $19,000; a gift on January 1, 2027 uses the new $20,000. Two gifts a few weeks apart give the five recipients $390,000 with no return.

Property, not cashThe recipient keeps your cost basis

Giving shares, crypto or real estate instead of cash has a tax consequence that does not show up on any gift tax form. The recipient generally takes your cost basis — what you paid — not the value on the day of the gift. This is called carryover basis, and it means the unrealized gain moves with the gift.

Say you bought shares for $5,000 and they are worth $20,000 when you give them to your daughter: that fits inside the 2027 exclusion, so no Form 709. When she sells for $20,000, she reports a $15,000 gain. Had she inherited the same shares at your death instead, her basis would be stepped up to their value then, and the gain would be zero — the difference explained in how to calculate capital gains tax. One more rule runs the other way: if the shares are worth less than you paid when you give them, the recipient cannot claim your loss — for a loss, the basis is the lower value at the time of the gift (IRS Publication 551). Losing positions are usually better sold by you and given as cash.

State taxesConnecticut is the exception

Most states have no gift tax. Connecticut is the only one that taxes gifts. For 2026 its lifetime gift exemption is $15 million, matched to the federal figure, and the tax is 12% of taxable gifts above it; a Connecticut resident who makes taxable gifts files form CT-706/709 even when no tax is due (Connecticut Department of Revenue Services). Connecticut has not yet posted a 2027 figure. Nonresidents are covered only for real estate and tangible property located in the state.

Several other states have their own estate or inheritance taxes at death, with exemptions well below the federal one. Those do not tax gifts, but if you live in one of them, ask how gifts made shortly before death are treated.

Before you giveA short checklist

If you track family finances in one place, the net worth tracker records the account balances before and after so a large gift does not disappear from your picture. And for ordinary holiday presents — which are nowhere near these limits — the 2026 holiday gift budget is the guide.

MethodologyWhere these numbers come from

• 2027 and 2026 limits: IRS news release IR-2026-133 and Revenue Procedure 2026-35, both November 5, 2026: annual exclusion $20,000 (2026: $19,000), basic exclusion amount $15,480,000 (2026: $15,000,000), annual exclusion for gifts to a non-citizen spouse $201,000 (2026: $194,000). Married-couple figures are these doubled.
• Filing rules: IRS Instructions for Form 709 (2025 edition): 529 five-year election, gift-splitting and spousal consent, the tuition and medical exclusions, the April 15 due date, the requirement to file for gifts of a future interest, and the 40% top rate. IRS Frequently Asked Questions on Gift Taxes: who pays, gifts to a spouse and political organizations, carryover basis. Loss basis rule: IRS Publication 551.
• Connecticut: Department of Revenue Services, Estate and Gift Tax Information (2026 exemption $15 million, 12% rate).
• Worked numbers: every dollar figure in the examples and table is computed in drafts/gift-tax-limit-2027-numbers.mjs. They assume each recipient receives nothing else from the same giver that year, gifts are cash unless stated, and the couple are both US citizens. Prior taxable gifts would reduce the "lifetime exemption left" figure.
• When this changes: the IRS publishes the 2028 figures in its inflation-adjustment revenue procedure, usually in October or November 2027. This article will be updated then.

FAQFrequently asked questions

How much can you gift tax-free in 2027?

$20,000 per recipient, up from $19,000 in 2026, with no return to file. A married couple can give $40,000 to each person. Above that, gifts use your $15,480,000 lifetime exemption, so actual tax is rare.

Does the person receiving a gift pay tax on it?

No. The giver is responsible for any gift tax, and a gift is not taxable income to the recipient. The recipient files nothing, whatever the amount.

What happens if I give more than $20,000 to one person?

You file Form 709 by April 15 of the following year. The amount above $20,000 reduces your lifetime exemption, and you owe tax only once your lifetime taxable gifts exceed $15,480,000 (2027).

Do my spouse and I have to file Form 709 to give $40,000?

Not if each of you gives $20,000 from your own funds. If one of you gives the full $40,000 and you want it treated as two gifts, that is gift-splitting, and it requires Form 709 — generally one from each spouse, with the other spouse's consent.

Does paying my grandchild's tuition count toward the $20,000?

Not if you pay the school directly and the payment is for tuition. That is excluded in any amount, on top of the annual exclusion. Money for books, housing or a 529 contribution is an ordinary gift.

How much can I put into a 529 plan at once in 2027?

Up to $100,000 per beneficiary, or $200,000 for a married couple, by electing on Form 709 to spread the contribution over five years. It uses that person's annual exclusion for 2027 through 2031.

Is a loan to my child a gift?

A forgiven loan is a gift in the year you forgive it. A loan with no interest, or interest below the IRS's applicable federal rate, can also create a gift of the interest you did not charge. A documented loan at that rate is not a gift.

Does any state have a gift tax?

Connecticut is the only state with a gift tax. Its 2026 lifetime exemption is $15 million, the same as the federal amount, with a 12% tax above it.