Gift Tax Annual Exclusion: Give $18,000 Per Person Tax-Free in 2024
The gift tax annual exclusion allows you to transfer $18,000 per recipient per year — completely tax-free and without using any of your lifetime exemption. A couple can give $36,000 per recipient annually. Over 10 years to 4 children: $1.44 million transferred with zero gift tax.
The Annual Exclusion: How It Works
IRC §2503(b) provides an annual exclusion from gift tax for transfers not exceeding a per-donee threshold, adjusted annually for inflation. For 2024, the exclusion is $18,000 per recipient. Gifts up to this amount per person per year are:
- Not subject to gift tax
- Not reportable on Form 709 (Gift Tax Return)
- Do not reduce your lifetime exemption ($13.61 million in 2024)
- Not limited in the number of recipients — you can give $18,000 to 100 different people in the same year
- 2022: $16,000
- 2023: $17,000
- 2024: $18,000
- 2025: $19,000 (IRS Rev. Proc. 2024-40)
Gift-Splitting: Doubling the Exclusion
Married couples can elect to split gifts under IRC §2513, treating a gift made by one spouse as made one-half by each. This doubles the annual exclusion to $36,000 per recipient in 2024 ($38,000 in 2025), even if only one spouse owns the assets being gifted.
To elect gift-splitting, both spouses must consent and one must file Form 709 (both must sign the return). The election applies to all gifts made during the calendar year — you cannot split some gifts and not others.
Tuition and Medical Payment Exception
Separate from the annual exclusion, IRC §2503(e) provides an unlimited exclusion for direct payments to educational institutions for tuition and to medical providers for medical expenses. These payments are not gifts at all for tax purposes — and are in addition to the $18,000 annual exclusion.
- Payment must go directly to the institution — you cannot give the money to the student or patient and have them pay. Write the check or wire funds directly to the school or hospital.
- Tuition only: Room, board, books, and fees do NOT qualify — only tuition payments to qualifying educational institutions
- Medical only: Directly paid medical expenses that qualify under IRC §213 — not health insurance premiums paid on behalf of the recipient
A grandparent paying a grandchild's $60,000/year college tuition directly to Harvard: $60,000 in tax-free transfers, with no gift tax, no exemption reduction, and no Form 709 required — plus an additional $18,000 annual exclusion gift on top.
TCJA Sunset Warning: Lifetime Exemption
The TCJA doubled the lifetime gift and estate tax exemption to $13.61 million per person in 2024. Under current law, this exempts sunsets on January 1, 2026, reverting to approximately $7 million per person (inflation-adjusted from the pre-TCJA $5M base).
For high-net-worth individuals with estates above $7 million, the window to use the higher exemption by making taxable gifts before the sunset is closing. The IRS has confirmed (Rev. Proc. 2019-11) that gifts made under the higher exemption will not be clawed back if the exemption later decreases.
IRC §2503 (taxable gifts), IRC §2503(b) (annual exclusion), IRC §2503(e) (tuition and medical exclusion), IRC §2513 (gift-splitting by spouses), IRC §2505 (unified credit). IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return). Rev. Proc. 2024-40 (2025 annual exclusion announcement).
Genie maps your annual exclusion gifting capacity across all recipients, models direct tuition payments, and flags whether your estate is large enough to warrant using the higher TCJA exemption before it sunsets.
Plan My Annual GiftingSee what this strategy saves on your own return.
Upload last year’s return — Genie checks it against 400+ strategies, free. A licensed professional reviews every finding. Consult that pro before implementing; individual results vary.
Start my free audit →