GST Exemption 2026
Current year
For 2026, the GST Exemption figures are $15,000,000 (Lifetime GST exemption) and 40% (Top GST tax rate).
Effective 2026-01-01Source: Rev. Proc. 2025-32 (IRS)Verified 2026-09-03
Top GST tax rateSource: 2025 Instructions for Form 709 (IRS)Verified 2026-09-03
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Lifetime GST exemption | $13,990,000 | $15,000,000 | +$1,010,000 (+7.2%) |
| Top GST tax rate | 40% | 40% | +0% (+0.0%) |
Who it applies to
Taxpayers who make generation-skipping transfers, including those subject to estate, gift, or generation-skipping transfer tax
What changed this year, and why
The lifetime GST exemption goes from $13,990,000 for 2025 to $15,000,000 for calendar year 2026, and this time the increase is statutory rather than an inflation adjustment. Rev. Proc. 2025-32 explains that Section 70106 of the One, Big, Beautiful Bill Act amends § 2010 by increasing the basic exclusion amount to $15,000,000 for calendar year 2026, and that the generation-skipping transfer exemption amount under § 2631 is equal to $15,000,000 for the same calendar year. The revenue procedure adds that the basic exclusion amount will be adjusted for inflation for calendar year 2027 and future years.
Common questions
- What is the generation-skipping transfer (GST) exemption for 2026?
- The lifetime generation-skipping transfer (GST) exemption is $15,000,000 for calendar year 2026.
Every amount on this page is a published figure rather than yours. The GST exemption headroom takes the number you enter and works it out against them, showing which published figure it used.
Which transfers the GST tax reaches
A generation-skipping transfer occurs when someone gives property directly to a skip person - typically a grandchild or more remote descendant - and the recipient is two or more generations below the donor. For lifetime (inter vivos) transfers, this is called an inter vivos direct skip, and it is the only kind of GST that must be reported on Form 709. For the transfer to qualify as an inter vivos direct skip, it must satisfy all three conditions: it must be subject to the gift tax, it must be of an interest in property, and it must be made to a skip person. Transfers that do not have to be reported on Schedule A of Form 709, such as annual-exclusion gifts, educational or medical payments, and most transfers to a spouse, are not subject to the GST tax. The donor may apply the lifetime GST exemption of $15,000,000 to these transfers to reduce or eliminate the tax.
Transfers Subject to the GST Tax You must report on Form 709 the GST tax imposed on inter vivos direct skips. An inter vivos direct skip is a transfer made during the donor’s lifetime that is: • Subject to the gift tax, • Of an interest in property, and • Made to a skip person.
2025 Instructions for Form 709 (IRS)
The exemption allocates itself to direct skips unless you elect out
When a donor makes an inter vivos direct skip during lifetime, the IRS will automatically apply a portion of the donor's unused GST exemption to the transferred property. This automatic allocation happens by operation of law unless the donor takes affirmative steps to prevent it. To opt out of the automatic allocation, the donor must file Form 709 and attach a written statement that clearly describes the transaction and specifies the extent to which the automatic allocation should not apply. Simply reporting the direct skip on a timely filed Form 709 and paying any GST tax due on the transfer will also prevent the automatic allocation from taking effect. This rule gives donors flexibility but requires them to monitor their transfers carefully, since failing to elect out means the exemption of $15,000,000 will be consumed automatically, leaving less available for other planning purposes.
In the case of inter vivos direct skips, a portion of the donor’s unused exemption is automatically allocated to the transferred property unless the donor elects otherwise. To elect out of the automatic allocation of exemption, you must file Form 709 and attach a statement to it clearly describing the transaction and the extent to which the automatic allocation is not to apply.
2025 Instructions for Form 709 (IRS)
Allocating the exemption is a one-way decision
The donor can apply this exemption to inter vivos transfers (that is, transfers made during the donor's life) on Form 709. The executor can apply the exemption on Form 706 to transfers taking effect at death. An allocation is irrevocable. Once a donor or executor allocates any portion of the GST exemption to a particular transfer, that allocation cannot be undone or modified in a later year. This means the allocation decision is permanent: if you allocate too much exemption to one transfer, you cannot reclaim the excess for another transfer; if you allocate too little, you cannot go back and increase it later. The irrevocability rule applies regardless of whether the allocation was made on a timely filed return, on an amended return, or through a late allocation. Because the allocation cannot be reversed, donors should carefully consider which transfers receive exemption and how much, especially since the lifetime GST exemption of $15,000,000 is a finite resource that must be allocated strategically across all generation-skipping transfers during the donor's life and at death.
The donor can apply this exemption to inter vivos transfers (that is, transfers made during the donor’s life) on Form 709. The executor can apply the exemption on Form 706 to transfers taking effect at death. An allocation is irrevocable.
2025 Instructions for Form 709 (IRS)
Allocating to a transfer not reported on this return
When allocating GST exemption to transfers that are not reported on the current Form 709 - such as prior-year gifts, transfers made in earlier years, or late allocations - the donor must attach a written statement to the return. This statement must be titled "Notice of Allocation" and must include specific information for each trust or other transfer: clear identification of the trust (including its EIN if known), the year the original transfer was reported on Form 709 (if this is a late allocation), the value of the trust assets at the effective date of the allocation, the amount of GST exemption being allocated to each gift, and the inclusion ratio of the trust after the allocation. The total of all exemption allocations must be calculated and entered on line 6 of the return. This procedure allows donors to allocate exemption to transfers after the fact, which is important because the allocation of the lifetime GST exemption of $15,000,000 to a transfer permanently reduces the GST tax on that transfer. Without a proper Notice of Allocation, the IRS may not recognize the allocation, leaving the transfer exposed to GST tax.
Notice of Allocation. To allocate your exemption to such transfers, attach a statement to this Form 709 and entitle it “Notice of Allocation.” The notice must contain the following for each trust (or other transfer).
2025 Instructions for Form 709 (IRS)
A donor uses it during life, an executor uses it at death
For federal GST purposes, the $15,000,000 lifetime exemption is available to both living donors and decedents' estates, but it is used on different forms. A donor applies the exemption to inter vivos transfers - gifts made during the donor's life - by allocating it on Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return. An executor, on the other hand, applies the exemption to transfers taking effect at death by allocating it on Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. Once the exemption has been allocated to a particular transfer, that allocation cannot be undone; it is irrevocable. Taxpayers should therefore keep careful records of their transfers and allocations to make sure that any future increases in the exemption amount are directed correctly.
Keep a record of your transfers and exemption allocations to make sure that any future increases are allocated correctly. Enter on line 1 of Part 2 the maximum GST exemption you are allowed. This will not necessarily be the highest indexed amount if you made no GSTs during the year of the increase. The donor can apply this exemption to inter vivos transfers (that is, transfers made during the donor’s life) on Form 709. The executor can apply the exemption on Form 706 to transfers taking effect at death. An allocation is irrevocable.
2025 Instructions for Form 709 (IRS)
A higher exemption in a later year does not reach back to cover an earlier transfer
Under federal GST rules, the $15,000,000 lifetime exemption grows each year with inflation, but a higher exemption available in a later year cannot be applied retroactively to transfers made before that year. Each annual increase in the exemption can only be allocated to transfers made during or after the year in which the increase takes effect, or to appreciation occurring during or after that year. For example, if a donor made large generation-skipping transfers in an earlier year when the exemption was much smaller, the donor cannot go back and allocate the larger, current-year exemption to those past transfers. However, the donor can allocate the increased exemption to a trust created in the earlier year if that trust was not a direct skip but could produce generation-skipping transfers in the future - even if no additional transfers have been made to that trust since it was created.
In general, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the increase.
2025 Instructions for Form 709 (IRS)
Unused exemption does not just sit there, it gets allocated automatically
Under federal GST rules, when a donor makes an inter vivos direct skip - a transfer to a skip person during life that is subject to both gift tax and GST tax - a portion of the donor's unused GST exemption is automatically allocated to the transferred property. This automatic allocation happens unless the donor affirmatively elects otherwise. To opt out, the donor must file Form 709 and attach a statement clearly describing the transaction and the extent to which the automatic allocation should not apply. Simply reporting the direct skip on a timely filed Form 709 and paying the GST tax on the transfer will also prevent the automatic allocation. With the $15,000,000 lifetime exemption available, donors should consider whether they want this automatic mechanism to apply or whether they prefer to allocate their exemption manually to different transfers.
In the case of inter vivos direct skips, a portion of the donor’s unused exemption is automatically allocated to the transferred property unless the donor elects otherwise. To elect out of the automatic allocation of exemption, you must file Form 709 and attach a statement to it clearly describing the transaction and the extent to which the automatic allocation is not to apply. Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will prevent an automatic allocation.
2025 Instructions for Form 709 (IRS)
A gift under the annual exclusion is not automatically safe from GST tax
Under federal GST rules, a transfer that falls within the annual gift tax exclusion is not automatically free from GST tax in the future. Certain transfers - particularly transfers to a trust - that are not subject to gift tax at the time of the gift and therefore do not trigger GST tax on Form 709 may nonetheless become subject to the GST tax at a later date, even when the transfer is less than the annual exclusion amount. In such cases, the IRS recommends that the donor consider applying GST exemption to the transfer on the current return or on a Notice of Allocation, because the trust may later make distributions or terminations that are subject to GST tax and the exemption applied now will shelter those future events.
Caution: Certain transfers, particularly transfers to a trust, that are not subject to gift tax and are therefore not subject to the GST tax on Form 709 may be subject to the GST tax at a later date. This is true even if the transfer is less than the $19,000 annual exclusion.
2025 Instructions for Form 709 (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. 2025-32 (IRS)
- Lifetime GST exemption
For calendar year 2026, the generation-skipping transfer exemption amount under § 2631(c) is equal to $15,000,000.
2025 Instructions for Form 709 (IRS)
- Top GST tax rate
The top rate for gifts and generation-skipping transfers remains at 40%.
By year
Every published year
11 years on record, 2026 back to 2016. Each year links to its own page, its own document and its own verification date.
Oldest year at the left. Every line spans the same run of years, with a tick under each year it has a figure for, so a line that starts late is a column the law added late. The vertical axis is scaled to the values plotted rather than to zero, so a line shows the shape of the change and not the size of the amount. The table states every value.
Download every year as a csv. One row per published figure, each carrying the document it was read from and the date it was checked.