How Much Money Can I Give Without Paying Gift Tax?

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.

2025 Gift Tax Exclusion: How Much Can You Gift Tax-Free?

The annual gift tax exclusion for 2025 increased to $19,000 per recipient. This means you can give up to $19,000 to any individual without triggering federal gift tax liability.

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 counts toward your lifetime gift and estate tax exclusion

In 2025, the federal estate tax exclusion is $13,990,000. If your gifts exceed the annual exclusion, you can deduct the excess from your lifetime exclusion instead of paying gift tax.

Example:

• You gift your child $25,000 in 2025.
• This exceeds the $19,000 annual gift tax exclusion by $6,000.
• Instead of paying gift tax, you report the $6,000 excess on a federal tax return.
• Your lifetime estate tax exclusion is reduced by $6,000.

Estate Tax Changes in 2026

If Congress does not pass new legislation, the estate tax exclusion will decrease by 50% in January 2026, lowering it to around $7 million per person. However, since most Americans do not accumulate that level of wealth, many can transfer substantial assets without ever having to pay any gift tax.

Key Takeaways:

• Donors pay gift tax, not recipients.
• In 2025, you can gift up to $19,000 per person tax-free.
• Any excess counts toward your $13.99 million lifetime exemption.
• The estate tax exemption will decrease in 2026 unless Congress acts.

Understanding these rules can help you maximize tax-free wealth transfers. I 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, 2025.