Gift Tax Calculator 2026

How the federal gift tax works

The gift tax applies when you give money or property to someone without getting full value in return. It is paid by the giver, not the recipient — the person receiving a gift owes no federal income tax or gift tax on it. In practice almost nobody pays it, because two generous allowances come first:

• The annual exclusion: $19,000 per recipient for 2026. You can give that much to as many people as you like each year. A married couple can give $38,000 to each person.
• The lifetime exemption: gifts above the annual exclusion are “taxable gifts,” but they simply use up part of your $15,000,000 lifetime exemption. It is unified with the estate tax exemption — whatever you use during life reduces what is left at death. Under the One Big Beautiful Bill Act it is $15,000,000 per person for 2026 and indexed for inflation from 2027.

Only once you’ve given away more than the lifetime exemption in taxable gifts does actual tax start, at rates that reach 40% almost immediately.

How to use the gift tax calculator

1. Pick the year of the gift — the annual exclusion and exemption change with inflation.
2. Enter the total you gave each person during the year. Add rows for more recipients. Choose “future interest” for gifts the recipient can’t use right away (most trusts without withdrawal rights), which don’t qualify for the exclusion.
3. If you’re married, tick gift splitting to treat each gift as made half by you and half by your spouse.
4. Add gifts to your spouse, tuition or medical bills you paid directly, and any taxable gifts from earlier years.

Gift tax formula

Tuition paid directly to a school and medical payments made directly to a provider are left out entirely. Outright gifts to a US-citizen spouse are fully deductible; a non-citizen spouse gets a special annual exclusion of $194,000 instead.

Example: gifts to children and a grandchild

A parent gives $50,000 to each of two adult children and $19,000 to a grandchild in 2026, with no prior taxable gifts.

Without splitting, $62,000 of the gifts exceed the exclusion. No tax is due — the amount is simply subtracted from the lifetime exemption — but a Form 709 must be filed. With gift splitting, each spouse is treated as giving $25,000 to each child and $9,500 to the grandchild, so only $12,000 per spouse is taxable. Splitting still requires a Form 709 to make the election.

When you must file Form 709

You need to file Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) for a year in which you:

• gave any one person (other than your US-citizen spouse) more than the annual exclusion;
• made any gift of a future interest, regardless of size;
• want to split gifts with your spouse;
• elect to spread a large 529 plan contribution over five years; or
• gave a non-citizen spouse more than $194,000.

Form 709 is due April 15 of the following year. An extension of your income tax return (Form 4868) also extends Form 709; otherwise use Form 8892. Late filing carries no penalty when no tax is due, but filing on time starts the statute of limitations on the gift’s value — a good reason to file for hard-to-value assets.

Gift tax limits by year

Planning tips

• Use the exclusion every year. It doesn’t carry over. A couple giving $38,000 a year to three children moves $1,140,000 out of their estate over ten years without touching the lifetime exemption.
• Pay tuition and medical bills directly. A grandparent who writes the tuition check to the university can still give the grandchild the full annual exclusion on top.
• Superfund a 529. You can contribute up to five years of exclusions ($95,000 per beneficiary, double for couples) at once and elect to spread it over five years on Form 709.
• Think about basis. Gifted property keeps your cost basis, while inherited property generally gets a step-up to market value at death. Gifting highly appreciated stock can increase the recipient’s eventual capital gains tax.
• Large lifetime gifts are safe. IRS regulations prevent a “clawback” if the exemption is ever lowered after you’ve used it.

To see how lifetime gifts interact with what you leave at death, run the estate tax calculator — taxable gifts are added back as “adjusted taxable gifts.”