2018 Gift Tax Exclusion
For 2018, the Gift Tax Exclusion figures are $15,000 (Annual exclusion per recipient) and $152,000 (Annual exclusion for a gift to a noncitizen spouse).
Effective 2018-01-01Source: Rev. Proc. 2017-58 (IRS)Verified 2026-09-03
Compared with 2017
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Annual exclusion per recipient | $14,000 | $15,000 | +$1,000 (+7.1%) |
| Annual exclusion for a gift to a noncitizen spouse | $149,000 | $152,000 | +$3,000 (+2.0%) |
Who it applies to
Taxpayers who make gifts to individuals during the 2018 calendar year
What changed this year, and why
The annual gift tax exclusion for 2018 is $15,000 per recipient, an increase from the prior year.
Common questions
- What is the annual gift tax exclusion for 2018?
- For calendar year 2018, the first $15,000 of gifts to any person (other than gifts of future interests in property) are excluded from taxable gifts under IRC § 2503.
- Does the exclusion apply to all types of gifts?
- The $15,000 exclusion applies to present-interest gifts. Gifts of future interests in property do not qualify for the annual exclusion.
When a gift needs no return at all
A donor does not have to file Form 709 for 2018 only when all three conditions are met at the same time. First, the donor made no gifts to a spouse during the year (gifts to a U.S.-citizen spouse are normally deductible but still must be reported in many cases). Second, the total value of gifts to each individual donee was $15,000 or less, so the annual exclusion covers every gift in full. Third, every gift was a present interest - meaning the donee had the immediate right to use, possess, or enjoy the property - rather than a future interest that is delayed until some later date. If any one of the three conditions fails, a return is required even when no tax will ultimately be owed. A donor whose only gifts are fully deductible charitable transfers also skips filing, provided the entire interest went to a qualified charity.
Who does not need to file. If you meet all of the following requirements, you are not required to file Form 709. • You made no gifts during the year to your spouse. • You did not give more than $15,000 to any one donee. • All the gifts you made were of present interests.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
The gifts the exclusion does not cover
Certain gifts, called future interests, are not subject to the $15,000 annual exclusion and you must file Form 709 even if the gift was under $15,000. See Annual Exclusion, later.
A gift of a future interest cannot be excluded under the annual exclusion. A gift is considered a present interest if the donee has all immediate rights to the use, possession, and enjoyment of the property or income from the property. A gift is considered a future interest if the donee's rights to the use, possession, and enjoyment of the property or income from the property will not begin until some future date.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Who actually owes the gift tax
The gift tax falls on the person making the gift, not the person receiving it. The IRS considers the donor - the one who gives the property - to be the party responsible for paying any tax due on the transfer. However, if the donor fails to pay the tax, the recipient may be held liable instead. This rule keeps the reporting burden aligned with the person who chose to part with the property, while still ensuring the government can collect from the donee when necessary. The same principle applies to the generation-skipping transfer tax. Even when no tax will ultimately be owed because gifts stay within exclusions or deductions, the donor must still file Form 709 to report the transfers if a return is required.
The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift may have to pay the tax.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Splitting a gift with your spouse
A married couple may not file a joint gift tax return, so each spouse files an individual Form 709. When the couple elects to split gifts, both spouses must consent, and the return for each spouse should be filed together in the same envelope so the IRS can match the two elections and avoid correspondence.
A married couple may not file a joint gift tax return. However, if after reading the instructions below, you and your spouse agree to split your gifts, you should file both of your individual gift tax returns together (that is, in the same envelope) to help the IRS process the returns and to avoid correspondence from the IRS.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
When the return is due
A gift made at any point in 2018 is reported after the year has ended rather than when it happens, so the timing question is really about which year's return it belongs on. The return covers a whole calendar year, which fixes both ends of the window: it cannot be sent in before January 1 of the following year, and it has to be in by April 15 of that year. Filing early to get it out of the way is therefore not an option - a return posted during the giving year itself is premature, because the year it reports on is not over. The closing date is not quite fixed either. Where April 15 lands on a Saturday, a Sunday or a legal holiday, the deadline moves to the next business day, so in some years the real cut-off falls a day or two later than the date people carry in their heads.
Form 709 is an annual return. Generally, you must file Form 709 no earlier than January 1, but not later than April 15, of the year after the gift was made. However, in instances when April 15 falls on a Saturday, Sunday, or legal holiday, Form 709 will be due on the next business day.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Room you do not use for one person this year is simply gone
For 2018, the federal annual gift tax exclusion is $15,000 per recipient. The exclusion applies only to gifts of present interest made during that calendar year to that particular donee. If you give someone less than $15,000 in a year, the difference does not carry over to future years, and it cannot be applied to gifts you make to other people. The exclusion is calculated separately for each donee and each calendar year, and any portion you fail to use for a given recipient in a given year is simply lost. You cannot accumulate unused exclusion amounts from one year to the next or shift them between recipients.
The first $15,000 of gifts of present interest to each donee during the calendar year is subtracted from total gifts in figuring the amount of taxable gifts.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Understating what a gift was worth carries its own penalty
If you report a gift at a value that is too low, the IRS can impose an accuracy-related penalty on top of the gift tax you owe. A substantial valuation understatement occurs when the value you put on Form 709 is 65% or less of what the property is actually worth. A gross valuation understatement is more serious: it happens when the reported value is 40% or less of the true value. Both thresholds are measured the same way, but the gross category carries a higher penalty rate. These penalties apply only when the understatement causes an underpayment of tax, so if the understatement does not change the amount of tax you owe (for example, because your lifetime exemption would have covered the gift anyway), the penalty does not apply.
A substantial valuation understatement occurs when the reported value of property entered on Form 709 is 65% or less of the actual value of the property. A gross valuation understatement occurs when the reported value listed on the Form 709 is 40% or less of the actual value of the property.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Giving more than the exclusion does not automatically mean tax is owed
Giving more than the annual exclusion to one recipient in a year does not automatically mean gift tax is owed. Every dollar of taxable gifts above the annual exclusion is applied against a separate, much larger lifetime allowance - the basic exclusion amount under IRC section 2010(c), the same allowance a person's estate draws on at death. Tax is due only once a donor's cumulative taxable gifts exceed that allowance. The IRS's instructions for Form 709 state it directly: for 2018, the donor's basic exclusion amount is $11,180,000. Because that amount changes from year to year and can also be changed by legislation, see this site's estate tax exemption page for how the current year's basic exclusion amount is set and how it interacts with lifetime gifts.
On line 1, enter the donor's basic exclusion amount; for 2018, this amount is $11,180,000.
2018 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2017-58 (IRS)
- Annual exclusion per recipient
(1) For calendar year 2018, the first $15,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under § 2503 made during that year.
- Annual exclusion for a gift to a noncitizen spouse
(2) For calendar year 2018, the first $152,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts under §§ 2503 and 2523(i)(2) made during that year.