Gift Tax Calculator

How the Federal Gift Tax Works

The federal gift tax applies when you transfer money or property to someone without receiving full value in return. However, most gifts are not taxed because of two key exclusions. The annual exclusion allows you to give up to $19,000 per recipient per year (2025) without any tax consequences or reporting requirements. Married couples who elect gift splitting can give $38,000 per recipient together. Any amount above the annual exclusion counts against your lifetime exemption of $13.99 million (2025). Only after exhausting this massive lifetime exemption would you actually owe gift tax at rates from 18% to 40%.

Annual Exclusion vs Lifetime Exemption

The annual exclusion is a per-recipient, per-year amount that does not require reporting or reduce your lifetime exemption. You can give $19,000 each to as many people as you want every year with no tax impact. The lifetime gift and estate tax exemption is a combined $13.99 million — this is the total amount you can give away during life and at death before any tax is owed. Gifts above the annual exclusion that use your lifetime exemption must be reported on IRS Form 709. These are not taxed immediately but reduce the exemption available at death. The exemption is scheduled to drop to approximately $7 million after 2025 unless Congress extends it.

Gift Tax Rates and Strategies

Federal gift tax rates range from 18% on the first $10,000 of taxable gifts to 40% on amounts over $1 million. In practice, very few people owe gift tax because the lifetime exemption covers nearly $14 million. Smart gifting strategies include: annual exclusion gifts to multiple family members, paying medical bills directly to providers (unlimited, no gift tax), paying tuition directly to educational institutions (unlimited), contributing to 529 plans with five-year election (up to $95,000 in one year per beneficiary), and timing gifts to use the current high exemption before it potentially decreases. Consult a tax professional for gifts above the annual exclusion.

Gift Tax Calculator Example: $100,000 to a Grandchild in 2026

Suppose grandparents (married) want to gift $100,000 to a single grandchild in 2026. The annual exclusion is $19,000 per recipient per giver, so with gift-splitting the couple can move $38,000 tax-free against the annual exclusion. The remaining $62,000 counts against their combined $27.98M lifetime exemption — no federal gift tax is owed, but they must file Form 709 to report the gift and elect splitting. Alternative: super-fund a 529 plan under IRC § 529(c)(2)(B) — the couple can move up to $190,000 (5 × $38,000) into the 529 in a single year, treated as $38,000/year for five years, with no gift tax and no use of lifetime exemption. The 529 path keeps the lifetime exemption fully intact and grows the funds tax-deferred. The IRS publishes the 2026 exemption figures in Revenue Procedure 2024-40.

State Gift Tax — Why Federal Isn't the Whole Story

This gift tax calculator models the federal gift tax under Subtitle B of the Internal Revenue Code. Only one US state — Connecticut — imposes its own gift tax, with a $13.99M lifetime exemption mirroring the federal level per the Connecticut Department of Revenue Services. Connecticut residents who gift above the federal annual exclusion may face state-level reporting on top of federal Form 709. No other state taxes gifts directly, but state estate-and-inheritance taxes apply at death in 17 states plus DC — with thresholds well below the federal $13.99M (Massachusetts and Oregon: $1M; Washington: $2.193M as of 2026 per Washington DOR). Smart 2026 gifting plans treat the federal calculator as the floor, then layer in state estate-tax thresholds for residents of CT, MA, NY, NJ, OR, WA, MD, IL, RI, ME, MN, VT, HI, KY, IA, NE, PA. For non-CT residents, this calculator's output reflects the full gift-tax bill.

Gift Tax Calculator vs Estate Tax Calculator — Which You Need in 2026

A gift tax calculator models transfers made during your lifetime; an estate tax calculator models transfers at death. Both share the same $13.99M unified exemption in 2026, and dollars used against gift tax reduce what is available for the estate at death — that is the "unified" part of the transfer-tax system. Use this gift tax calculator when you are actively transferring assets to family, funding 529 plans, or planning multi-generational gifts. Use an estate tax calculator when planning what happens at death, which brings in probate, step-up in basis, portability elections, and QTIP trusts. Per IRS Estate and Gift Taxes, the practical rule of thumb: if your estate is under $13.99M ($27.98M for married couples with portability), neither tax is likely to apply — but Form 709 still must be filed for gifts above the $19,000 annual exclusion.

How To Use This Gift Tax Calculator and File Form 709 (2026)

Enter the total gift amount, number of recipients, whether you're electing gift splitting with a spouse, and any prior lifetime taxable gifts. The calculator applies the IRS 2026 annual exclusion of $19,000 per recipient (per IRS Form 709 instructions) and the $13.99M lifetime gift-and-estate-tax exemption, then computes any tentative tax against the unified credit. If "Form 709 Required" returns Yes, you must file by April 15, 2027 to report 2026 calendar-year gifts (extensions follow the same rule as your personal return).

The page's $19,000 annual exclusion and $13.99M lifetime exemption are the 2025/2026 IRS-published figures from Revenue Procedure 2024-40 — see IRS Publication 559 (Survivors, Executors, and Administrators) for the most current annual inflation adjustments. Strategic note for 2026: the One Big Beautiful Bill Act (OBBB, signed 2025) made the higher TCJA exemption permanent, eliminating the previously scheduled 2026 sunset — so you no longer need to rush large gifts before year-end to lock in the high exemption. Updated 2026-07-13.

Common Gift Tax Calculator Mistakes That Trigger IRS Notices in 2026

Even a correct gift tax calculator output can produce a wrong return if you enter the wrong figures. The most frequent Form 709 errors surfaced by the IRS include: (1) forgetting to file Form 709 for a gift-split election when neither spouse owes any tax — the election itself requires the return under Reg. §25.2513-2; (2) treating tuition or medical payments made through a family member as excluded — the qualified transfer exclusion under IRC §2503(e) requires payment directly to the institution or provider; (3) failing to add the fair-market-value appreciation of appreciated stock gifted mid-year — the taxable value is the FMV on the day of transfer, not cost basis; (4) forgetting to add up prior lifetime gifts to compute the correct remaining exemption; (5) reporting a 529 super-fund contribution without electing 5-year averaging on Form 709 Schedule A. Each of these is fixable by re-running this calculator with corrected inputs before you file. Reference: IRS Form 709 Instructions.