The IRS set the 2027 annual gift tax exclusion at $20,000 per recipient. That's up from $19,000 for 2026. The figures are in Revenue Procedure 2026-35 and the November 5, 2026 IRS news release.

The exclusion is per giver, per recipient, per calendar year. Unused room does not carry over. It applies only to completed gifts of a present interest, which means the recipient can use the gift right away. Gifts of a future interest do not qualify. Many gifts in trust fall in that group, and those often require a gift tax return even when the amount is small.

Using this year and next

A gift completed by December 31, 2026 uses the $19,000 limit. A gift made in January 2027 uses the $20,000 limit. If you give by check, it counts in 2026 only if the check is deposited or cashed by December 31.

Married couples

Each spouse has a separate exclusion. If each one gives from their own funds, they can give up to $40,000 to the same person in 2027. If one spouse makes the whole gift and the couple elects to split it, a Form 709 is required even when no tax is due.

When a return is due

Outright gifts within the annual exclusion generally do not require Form 709, as long as nothing else triggers a filing. Gifts over the exclusion do. Going over does not, by itself, mean you owe gift tax. The excess uses part of the lifetime exclusion, which is $15,480,000 per person for 2027. Gift tax is owed only after that amount is used up. A return is still required even when no tax is due. A 2027 Form 709 is due April 15, 2028, and an income tax extension can extend that date.

Gifts to a spouse who is not a U.S. citizen have a separate annual limit of $201,000 for 2027, up from $194,000.

529 contributions

You can elect to treat a large 529 contribution as made over five years, up to five years of annual exclusions. For 2027, that is up to $100,000 per donor, per beneficiary. A married couple can each elect, for up to $200,000. Those amounts are five times the annual exclusion. They are not a separately published IRS limit.

The election is made on Form 709, so a return is required. It uses that donor's annual exclusion for that beneficiary for the five-year period. If the donor dies within five years, the unused years are pulled into the estate. A five-year contribution in December 2026 does not stack with a January 2027 gift to the same beneficiary the way ordinary year-end gifts do. Talk to us before you front-load a 529.

A few limits

These are federal rules. California community property, gifts in trust, and gifts to grandchildren can change whether a return is due. This is general information, not tax advice. Talk to us before you make a large gift.