The 2027 gift tax exclusion is $20,000 per recipient, up from $19,000 in 2025 and 2026. The IRS announced the new amount on November 5, 2026, in its tax year 2027 inflation adjustments, which are detailed in Revenue Procedure 2026-35. The same announcement raises the federal estate tax basic exclusion amount to $15,480,000 for people who die in 2027, up from $15,000,000 in 2026. Here is what the new numbers mean for gifts to children, grandchildren and others, and what you can still do before the year ends.
2027 gift and estate tax limits at a glance
| Item | 2025 | 2026 | 2027 |
|---|---|---|---|
| Annual gift exclusion per recipient | $19,000 | $19,000 | $20,000 |
| Annual exclusion for gifts to a spouse who is not a U.S. citizen | $190,000 | $194,000 | $201,000 |
| Basic exclusion amount (estate tax and lifetime gifts) | $13,990,000 | $15,000,000 | $15,480,000 |
Sources: the IRS release and Revenue Procedure 2026-35 for 2027 and 2026 amounts, the IRS gift tax FAQ for the 2025 and 2026 annual exclusion, and the Instructions for Form 709 for the 2025 amount for non-citizen spouses. The estate figure applies to the year of death, and the gift figures apply to the calendar year of the gift.
What the 2027 gift tax exclusion means for you
The annual exclusion lets you give up to $20,000 to as many people as you like in 2027 without any gift tax and, in most cases, without filing a gift tax return. The limit applies to each recipient separately. Give $20,000 to each of three children and you have given $60,000 in total, yet none of it counts against your lifetime exemption.
The exclusion only covers gifts of a present interest, meaning the recipient can use or enjoy the money or property right away. A gift to a trust that the beneficiary cannot touch yet is a future interest and generally needs a Form 709 no matter how small it is. The IRS gift tax FAQ says the donor is generally the one responsible for any gift tax.
Because the exclusion resets every January 1, the unused portion does not carry over. If you do not give anything in 2027, you cannot add the unused $20,000 to your 2028 limit.
Gifts that never count toward the limit
Some transfers are not treated as taxable gifts at all, so they do not use any of the 2027 gift tax exclusion. Per the IRS, these generally include:
- Tuition you pay directly to a school for someone else, and medical expenses you pay directly to the provider.
- Gifts to your spouse, who is a U.S. citizen.
- Gifts to a political organization for its own use.
- Gifts to qualifying charities, which are deductible from the value of the gifts you made.
The tuition and medical rules are the most useful for grandparents. The payment must go straight to the institution or provider, not to the student or patient, and then it sits on top of the $20,000 annual exclusion. See the IRS gift tax FAQ for the details.
How gift splitting works for married couples
Spouses who both consent can treat gifts to a third party as made half by each spouse. That means a married couple can give up to $40,000 per recipient in 2027 (two times $20,000) while staying inside the annual exclusion, even if the money comes from only one spouse’s account.
Splitting is not automatic. The Instructions for Form 709 explain that splitting generally requires a Form 709, and the consenting spouse signs a notice of consent. Consent is generally due by April 15 of the year after the gift. Spouses cannot file a joint gift tax return, so each files separately.
Three 2027 gift examples
- Within the exclusion: Dana gives each of her two nieces $20,000 in cash in 2027. No gift tax, no lifetime exemption used, and no Form 709 is needed.
- Over the exclusion: Marcus gives his son $120,000 toward a home purchase in 2027. The first $20,000 is excluded, so $100,000 is a taxable gift. Marcus files Form 709 and owes no tax, but his basic exclusion amount is reduced by $100,000. If he made no earlier taxable gifts, he has $15,380,000 of exclusion left ($15,480,000 minus $100,000), applying the 2027 amount.
- Split gift: Priya and Sam give their daughter $40,000 from a joint account in 2027. By splitting the gift, each spouse is treated as giving $20,000, which fits within each spouse’s exclusion. They file Form 709 to elect splitting.
When you need to file Form 709
Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return, is generally due April 15 of the year after the gift, moved to the next business day when that date falls on a weekend or legal holiday. For gifts made in 2026, that is April 2027. For gifts made in 2027, it is April 2028.
Under the Instructions for Form 709, U.S. citizens and residents generally must file if they give any one person (other than a spouse) more than the annual exclusion, make a gift of a future interest, or split gifts with a spouse. You do not file for gifts that are fully excluded, such as direct tuition or medical payments. For a walkthrough of the form, see our Form 709 gift tax filing guide.
An automatic extension of your income tax return also extends the gift tax return. It does not extend the time to pay any tax due.
The $15.48 million exemption and your lifetime gifts
Large gifts do not usually trigger a tax bill right away. Taxable gifts, meaning amounts above the annual exclusion, reduce your basic exclusion amount, and you owe gift tax only after your cumulative taxable gifts and your estate exceed that amount. The top federal rate on amounts above the exclusion is 40%.
For 2027, the basic exclusion amount is $15,480,000 per person. Married couples can combine exclusions, and a surviving spouse can receive a deceased spouse’s unused exclusion by making a portability election on a timely filed estate tax return, according to the IRS. For more background, read our 2026 estate tax updates and our estate tax planning guide.
Year-end gifting moves before January 1
The 2026 annual exclusion is still $19,000 for gifts completed by December 31, 2026. The new 2027 gift tax exclusion of $20,000 starts January 1, 2027. Since each calendar year has its own exclusion, a donor could give $19,000 to someone in late December and another $20,000 in early January without using any lifetime exemption.
- Decide which gifts you want to make before December 31 and make sure they are complete by then, not just promised.
- Keep records of the date, amount and recipient of every gift, along with how you valued non-cash property.
- If you plan to split gifts with a spouse, gather both spouses’ information so Form 709 is ready for April.
- Review your will and beneficiary designations, since gifts and estate plans work together. Our 2026 gift tax guide covers common strategies.
Frequently Asked Questions
What is the 2027 gift tax exclusion?
The 2027 gift tax exclusion is $20,000 per recipient per year, as set by the IRS in Rev. Proc. 2026-35. A married couple that splits gifts can give $40,000 per recipient.
Do I pay tax if I give more than $20,000?
Not usually. You file Form 709 and the amount over the exclusion reduces your lifetime basic exclusion amount, which is $15,480,000 for 2027. Gift tax is owed only after that amount is used up.
Can I give $20,000 to several people in the same year?
Yes. The exclusion applies to each recipient, so you can give $20,000 to as many people as you want in 2027 without filing a gift tax return, as long as each gift is a present interest.
Do gifts to my spouse count toward the limit?
Gifts to a U.S.-citizen spouse are generally not taxable. For a spouse who is not a U.S. citizen, the annual exclusion is $201,000 for 2027.
Is the estate tax exemption doubled for married couples?
Each spouse has a $15,480,000 exclusion for 2027 deaths. A surviving spouse can use the unused portion of the first spouse’s exclusion if the executor makes a portability election on a timely filed estate tax return.
Talk to a CPA before you give
The right gifting plan depends on your assets, your family and your estate. If you want help applying the 2027 gift tax exclusion or planning around the $15.48 million estate exemption, you can book a free consultation with Aric.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
