The IRS Lets Each Person Give Away $20,000 Tax-Free in 2027, Up From $19,000, and Raises the Estate Exemption to $15.48 Million

The IRS’s own gift tax guidance opens with a blunt line: “any gift is a taxable gift.” The page then lists exceptions, and the biggest one just got bigger. For gifts made in calendar year 2027, a person can give any one recipient $20,000 without it counting toward taxable gifts, up from $19,000, and the estate tax exemption for people who die in 2027 rises to $15.48 million.

The figures come from the IRS’s Nov. 5, 2026 inflation release, IR-2026-133, which updates almost 70 provisions. The estate and gift numbers are spelled out in Revenue Procedure 2026-35.

The $20,000 gift line, per person receiving

According to the IRS gift tax FAQ, the annual exclusion applies per recipient, not per giver’s total. For 2025 and 2026 it is $19,000 for each person who receives a gift. The 2027 release raises it to $20,000, and the release says the first $20,000 of gifts to any person is excluded from total taxable gifts for the year. A parent, grandparent or friend could give $20,000 each to several people in the same year, and each of those gifts would stay inside the exclusion.

The same FAQ says a married couple giving jointly can exclude twice the single amount. At the 2027 level that means $40,000 per recipient. The donor, not the recipient, is generally the one responsible for any gift tax, though the FAQ notes a recipient may agree to pay it under special arrangements.

Some transfers never count at all. The IRS says gifts to a spouse are excluded and eligible for the marital deduction, and that tuition or medical expenses paid for someone else are excluded from the gift tax. Gifts to qualifying charities are deductible from the value of gifts made.

The arithmetic scales quickly for larger families. A married couple giving jointly to three children would stay within the exclusion at $40,000 each, or $120,000 in total for the year, under the IRS’s doubling rule. Because the exclusion is counted recipient by recipient, the annual total is not capped by a single figure.

When a gift triggers a tax return

Going over $20,000 to one person is not the same as owing a tax bill. According to the IRS, Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return, is the form used to report transfers subject to the federal gift tax. The IRS pairs that gift tax with a lifetime exemption, and the dollar amount of that exemption is the next number in the release.

The IRS says that lifetime exemption, the basic exclusion amount, was raised to $15,000,000 for 2026 by Public Law 119-21. For 2027, according to the release, it is $15,480,000, up from $15,000,000. The same amount governs the estate tax: the IRS release lists $15,480,000 as the basic exclusion for decedents dying in 2027.

One more number from the release matters to couples with different citizenship: gifts to a spouse who is not a U.S. citizen are listed at $201,000, up from $194,000.

Where the $15.48 million line sits

The federal estate tax is a tax on the right to transfer property at death, according to the IRS estate tax page. It is based on the fair market value of everything the person owned or had certain interests in on the date of death. Debts, administration costs and transfers to a surviving spouse or qualified charities reduce that gross estate, and lifetime taxable gifts made since 1977 are added back.

The IRS says most simple estates do not need to file, and a return is required only when the gross estate plus adjusted taxable gifts and the specific gift tax exemption exceeds the filing threshold for the year of death. For 2026 that threshold is $15,000,000, according to the agency’s table. It was $13,990,000 for 2025 and $13,610,000 for 2024.

The Tax Foundation reports the same 2027 figures, $20,000 per recipient and $15,480,000 for estates, in its table of inflation-adjusted amounts.

The step from 2026 to 2027 is $480,000, taking the line from $15,000,000 to $15,480,000. The IRS table shows the recent path: $12,060,000 for 2022, $12,920,000 for 2023 and $13,610,000 for 2024. Those are filing thresholds for the year of death, so each year’s amount applies only to people who die in that year.

A surviving spouse can keep what the first estate did not use

For married couples, the IRS estate page describes portability. Since Jan. 1, 2011, an estate of someone survived by a spouse may elect to transfer any unused exemption to the surviving spouse, on a timely filed estate tax return for the person who died. Estates that have no filing requirement can still make the election, under simplified valuation rules.

That election is the reason an estate below the threshold may still file a return. The IRS recommends consulting a tax professional for complex or large transfers.

For most households the 2027 changes are a matter of keeping paperwork simple: a gift of $20,000 or less to any one person stays inside the annual exclusion, and an estate under $15.48 million is below the basic exclusion for deaths in 2027.

Get stories like this by email. Sign up for The Parent Diaries Letter.

This article was produced with AI assistance and edited for accuracy against the sources linked above.

Image: w_lemay – CC BY-SA 2.0/Wikimedia Commons