Gift Tax Calculator
Calculate federal gift tax and track lifetime gift tax exemption usage for large gifts.
Married couples can elect to "split" gifts, doubling the annual exclusion to $36,000 per recipient. Both spouses must consent by filing Form 709.
Direct payments to educational institutions for tuition or to medical providers for medical expenses are excluded from gift tax, with no dollar limit. These must be paid directly to the institution, not to the recipient.
Related Calculators
About This Calculator
The federal gift tax applies when you give more than the annual exclusion amount to any one person. However, due to the generous lifetime exemption, very few people actually pay gift tax. Understanding these rules helps you make strategic gifts for estate planning, family support, and wealth transfer.
Annual Gift Tax Exclusion (2026): You can give up to $18,000 per person per year without any gift tax implications. A married couple can give $36,000 per person together. These gifts do not count against your lifetime exemption and do not require a gift tax return.
Lifetime Gift Tax Exemption (2026): Beyond annual exclusions, you have a $13.61 million lifetime exemption (shared with estate tax). Only after exceeding this amount would you owe actual gift tax at rates up to 40%.
Why Gift Tax Matters:
- Gifts over the annual exclusion require filing Form 709
- Large gifts reduce your estate tax exemption
- Strategic gifting can reduce estate taxes
- Certain gifts qualify for unlimited exclusions (tuition, medical)
This calculator helps you determine if your gifts trigger filing requirements, how much of your lifetime exemption you have used, and estimate any gift tax owed.
For related planning, see our Estate Tax Calculator and Inheritance Tax Calculator.
How to Use the Gift Tax Calculator
- 1Enter the total value of gifts you plan to give this year.
- 2Input the number of recipients receiving gifts over the annual exclusion.
- 3Specify any married filing status to double the annual exclusion using gift splitting.
- 4Enter any previous lifetime gifts that have used your exemption.
- 5Review whether you need to file Form 709 (Gift Tax Return).
- 6See how much lifetime exemption remains and any tax owed.
Understanding the Annual Gift Tax Exclusion
The annual exclusion is your first line of defense against gift tax.
2026 Annual Exclusion Amounts
| Situation | Exclusion Amount |
|---|---|
| Single person to one recipient | $18,000 |
| Married couple to one recipient | $36,000 |
| Single person to married couple | $36,000 |
| Married couple to married couple | $72,000 |
How Annual Exclusion Works
You can give up to $18,000 to as many people as you want each year without:
- Filing a gift tax return
- Using any lifetime exemption
- Paying any gift tax
Example:
- You give $18,000 each to your 3 children
- Total gifts: $54,000
- Gift tax consequences: None
- Lifetime exemption used: $0
Gifts Over the Exclusion
If you give more than $18,000 to one person:
- Must file Form 709 (Gift Tax Return)
- Excess reduces lifetime exemption
- No tax owed until exemption exhausted
Example:
- You give $100,000 to your daughter
- Annual exclusion: $18,000
- Taxable gift: $82,000
- This $82,000 reduces your lifetime exemption
Gift Splitting for Married Couples
Married couples can elect to split gifts:
- Each spouse treated as giving half
- Effectively doubles annual exclusion to $36,000
- Requires both spouses to file Form 709
Lifetime Gift Tax Exemption
The lifetime exemption protects large gifts from actual gift tax.
2026 Lifetime Exemption
| Status | Lifetime Exemption |
|---|---|
| Individual | $13.61 million |
| Married Couple (combined) | $27.22 million |
How the Exemption Works
After using annual exclusions, gifts reduce your lifetime exemption:
Year 1: Give $500,000 to son
- Taxable gift: $500,000 - $18,000 = $482,000
- Remaining exemption: $13.61M - $482,000 = $13.128 million
Year 5: Give $1 million to daughter
- Taxable gift: $1,000,000 - $18,000 = $982,000
- Remaining exemption: $13.128M - $982,000 = $12.146 million
Exemption Sunset Warning
The current $13.61 million exemption is scheduled to be cut approximately in half after 2025 unless Congress acts. Planning now can lock in the higher exemption.
Unified Credit System
The lifetime gift exemption and estate tax exemption are unified:
- Same $13.61 million total
- Gifts reduce estate exemption dollar-for-dollar
- Cannot exceed combined total
Planning Implication: Large lifetime gifts reduce what can pass tax-free at death.
Unlimited Gift Tax Exclusions
Certain gifts are completely exempt from gift tax regardless of amount.
Tuition Payments
Requirements:
- Pay directly to educational institution
- Must be for tuition only (not room, board, books)
- Any level of education qualifies
Example:
- Pay $60,000 tuition directly to university
- Gift tax consequence: None
- Lifetime exemption used: $0
Caution: Giving the student cash to pay tuition counts as a regular gift.
Medical Expense Payments
Requirements:
- Pay directly to medical provider
- Must be for qualified medical expenses
- Cannot reimburse someone who already paid
Covered Expenses:
- Hospital bills
- Doctor fees
- Surgery costs
- Health insurance premiums
- Long-term care
Gifts to Spouse
Unlimited gifts to US citizen spouse are completely exempt. Non-citizen spouses have a higher annual exclusion ($185,000 in 2026) but not unlimited.
Gifts to Charity
Charitable gifts are exempt from gift tax and may provide income tax deductions. There is no limit on charitable giving.
Political Contributions
Contributions to political organizations are not subject to gift tax (though campaign finance limits may apply).
Combining Exclusions
You can combine unlimited exclusions with annual exclusions:
Example for grandchild:
- Pay $50,000 tuition (unlimited exclusion)
- Give $18,000 cash (annual exclusion)
- Total given: $68,000
- Taxable gift: $0
Filing Form 709 (Gift Tax Return)
Form 709 is required for certain gifts even if no tax is owed.
When Filing is Required
| Situation | Filing Required? |
|---|---|
| Gifts under $18,000 per person | No |
| Gifts over $18,000 to one person | Yes |
| Gift splitting with spouse | Yes |
| Gifts of future interests | Yes |
| Gifts to non-citizen spouse over $185,000 | Yes |
When Filing is NOT Required
- All gifts are under annual exclusion
- Gifts qualify for unlimited exclusions (tuition, medical)
- Gifts to spouse (US citizen)
- Charitable gifts
Filing Deadline
- April 15 of year following gift
- Automatic extension to October 15 with income tax extension
- Interest and penalties for late filing
What to Report
- Description of each gift
- Fair market value at time of gift
- Donee information
- Any gift splitting election
- Prior year taxable gifts
Record Keeping
Maintain records of:
- Gift dates and amounts
- Recipient information
- Valuations (especially for non-cash gifts)
- Copies of Form 709 filed
- Running total of lifetime gifts
Strategic Gift Tax Planning
Smart gifting can significantly reduce estate taxes and transfer wealth efficiently.
Annual Exclusion Gifting Program
Give annual exclusion amounts to multiple recipients each year:
Family of 4 children + 4 spouses + 8 grandchildren = 16 recipients
- Single person: 16 × $18,000 = $288,000/year
- Married couple: 16 × $36,000 = $576,000/year
- Over 20 years: Up to $11.52 million transferred tax-free
Gift Appreciating Assets
Gift assets expected to appreciate:
- Future growth occurs outside your estate
- Gift at current lower value
- Recipient gets carryover basis
Example:
- Gift stock worth $100,000
- In 20 years, worth $500,000
- $400,000 growth is outside your estate
Caution: Recipient gets your basis, not stepped-up basis at death.
Grantor Retained Annuity Trusts (GRATs)
Transfer appreciating assets with minimal gift tax:
- You transfer assets to trust
- Receive annuity payments back
- Remainder passes to heirs
- If assets outperform IRS rate, excess passes tax-free
529 Plan Superfunding
Front-load 5 years of annual exclusions into a 529 plan:
- Give $90,000 per beneficiary (single) or $180,000 (couple)
- Spread over 5 years for gift tax purposes
- Money grows tax-free for education
Paying Family Members
If you employ family members:
- Reasonable salary is not a gift
- Reduces your taxable income
- Builds their Social Security credits
- Must be for actual services rendered
Gift Tax Rates and Calculation
If you exhaust your lifetime exemption, actual gift tax rates apply.
2026 Gift Tax Rates
| Taxable Gift Amount | Tax Rate |
|---|---|
| $0 - $10,000 | 18% |
| $10,001 - $20,000 | 20% |
| $20,001 - $40,000 | 22% |
| $40,001 - $60,000 | 24% |
| $60,001 - $80,000 | 26% |
| $80,001 - $100,000 | 28% |
| $100,001 - $150,000 | 30% |
| $150,001 - $250,000 | 32% |
| $250,001 - $500,000 | 34% |
| $500,001 - $750,000 | 37% |
| $750,001 - $1,000,000 | 39% |
| Over $1,000,000 | 40% |
Who Pays Gift Tax?
The DONOR (giver) pays gift tax, not the recipient.
Exception: If donor does not pay, recipient may be liable.
Calculating Gift Tax
Step 1: Total all taxable gifts for the year Step 2: Add prior year cumulative taxable gifts Step 3: Calculate tentative tax on cumulative total Step 4: Subtract tax on prior gifts Step 5: Apply remaining unified credit Step 6: Result is tax owed (if any)
Example Calculation
Assume $13.61M exemption already used:
- New taxable gift: $1,000,000
- Gift tax rate: 40%
- Gift tax owed: $400,000
Note: Very few Americans ever actually pay gift tax due to the large lifetime exemption.
Pro Tips
- 💡Make annual exclusion gifts every year to transfer wealth without using lifetime exemption.
- 💡Pay tuition and medical expenses directly to institutions for unlimited exclusions.
- 💡Use gift splitting with your spouse to double effective annual exclusions.
- 💡Gift appreciating assets to move future growth outside your estate.
- 💡Keep detailed records of all gifts, even those under the annual exclusion.
- 💡Consider the basis implications - gifts carry over your basis, inheritances get stepped up.
- 💡File Form 709 timely to avoid penalties, even when no tax is owed.
- 💡Front-load 529 plans with 5 years of annual exclusions for education funding.
- 💡Consult an estate planning attorney before making large gifts.
- 💡Review the exemption sunset - current high exemptions may decrease after 2025.
- 💡Consider GRATs for transferring appreciating assets with minimal gift tax.
- 💡Coordinate gift planning with your overall estate plan.
Frequently Asked Questions
In 2026, you can give $18,000 per person per year without any gift tax consequences (annual exclusion). Beyond that, you have a $13.61 million lifetime exemption before owing actual gift tax. Most people never pay gift tax.
