Under federal tax law, the person making a gift (the donor) is responsible for any federal gift tax due—not the recipient (donee). The gift’s recipient (the donee) does not have to pay any income taxes on the value of the gift the donee receives.
2026 Gift Tax Exclusion: How Much Can You Gift Tax-Free?
The annual gift tax exclusion for 2026 is $19,000 per recipient. This means you can give up to $19,000 to any individual without using any of your lifetime federal gift and estate tax exclusion.
What Happens If You Gift More Than $19,000?
Making a gift larger than $19,000 to an individual beneficiary does not automatically mean you will have to pay gift taxes. Instead, the excess amount generally counts toward your lifetime gift and estate tax exclusion.
In 2026, the federal gift and estate tax exclusion is $15,000,000. If your gifts exceed the annual exclusion, you can generally apply the excess against your lifetime exclusion instead of paying gift tax.
Example:
- You gift your child $25,000 in 2026.
- This exceeds the $19,000 annual gift tax exclusion by $6,000.
- Instead of paying gift tax, you generally report the gift on a federal gift tax return, with the $6,000 excess counting toward your lifetime exclusion.
- Your lifetime gift and estate tax exclusion is reduced by $6,000.
Estate Tax Changes in 2026
In 2026, the federal gift and estate tax exclusion increased to $15 million per person, up from $13.99 million in 2025. This means individuals can transfer substantial assets during life or at death before federal gift or estate tax may become due, subject to prior taxable gifts and other applicable rules.
Key Takeaways:
- Donors pay gift tax, not recipients.
- In 2026, you can gift up to $19,000 per person without using your lifetime gift and estate tax exclusion.
- Any excess generally counts toward your $15 million lifetime exemption.
Understanding these rules can help you maximize tax-free wealth transfers. If you have questions about how gift and estate tax laws apply to your situation, consider consulting an experienced estate planning attorney.
This article was originally published on February 16, 2018, and updated on January 1, 2026.
