2023 Gift Tax Exclusion: $17,000 Per Recipient, and What Changed for 2026

By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.

The 2023 gift tax annual exclusion was $17,000 per recipient, so a married couple could give $34,000 to each child, grandchild or anyone else that year, each spouse using their own $17,000. A gift at or under the exclusion needed no gift tax return as long as it was a present-interest gift (a couple who instead elected gift splitting had to file Form 709 to make the election). The 2023 lifetime estate and gift exemption was $12,920,000 per person. For 2026 the figures are higher: $19,000 per recipient and $15,000,000 per person, according to the IRS estate and gift tax page.

If you are looking up 2023 because you are cleaning up an old year (a 529 contribution, a large gift to a child, a missed Form 709), the table below gives you the number for each year. The rest of this page explains how those limits apply to a dual-income household in California or Washington with young children, where the real questions are how much to put in 529s and UTMAs, whether to superfund, and what paperwork the gift creates.

Gift tax exclusion and lifetime exemption by year, 2022 to 2026

Source for the annual exclusion and lifetime figures: IRS, What’s New, Estate and Gift Tax. The married couple column is simply twice the per-person figure. The 2026 lifetime figure comes from the One Big Beautiful Bill Act (P.L. 119-21), which set it at $15,000,000 and indexes it for inflation from 2027. The older claim that the exemption would drop to roughly $7 million in 2026 is obsolete.

What the annual exclusion actually limits

The annual exclusion is a filing threshold, not a cap on what you may give. Three points cause most of the confusion:

• It is per donor, per recipient, per year. Each parent has their own $19,000 for 2026 for each child. Two parents and two children means $76,000 can move to the children in 2026 with no return.
• Going over does not mean paying tax. A gift above the exclusion requires Form 709 and uses part of the giver’s lifetime exemption. Tax is owed only after the whole lifetime exemption ($15,000,000 per person for 2026) is used up. For most families in the $750,000 to $3 million income range, federal gift tax is a reporting question, not a cash cost.
• There is no separate “UTMA limit” or “529 limit”. The same exclusion applies whether the money goes into a UTMA account, a 529 plan or straight to the child. A 529 plan has its own maximum account balance set by the plan, but that is a plan rule, not a gift tax rule.

Some payments sit outside the exclusion entirely. Under the Form 709 instructions, tuition paid directly to a school and medical bills paid directly to the provider (or health insurance premiums paid directly to the insurer) are not gifts at all, with no dollar limit. Paying private school tuition for a niece straight to the school does not touch your annual exclusion. Contributions to a 529 plan do not qualify for this tuition rule; they count against the annual exclusion.

Worked example: a Bay Area household using the exclusion for two young children

Assumptions (illustrative): a married couple in San Mateo County, one a biotech scientist and one a physician, $1.1 million combined W-2 income including RSUs. Two children, ages 4 and 7. Their savings come from joint accounts, which in California are generally community property.

What they did in 2023. They moved $34,000 into each child’s 529 plan, $68,000 in total. Because a gift of community property is treated as made one-half by each spouse (Form 709 instructions), each parent gave $17,000 to each child. That matched the 2023 exclusion exactly, so no Form 709 was needed for 2023.

What they could do in 2026. The 2026 exclusion is $19,000, so the same pattern allows $38,000 per child, or $76,000 total, with no return. They also have a larger option. The 529 five-year election lets each donor treat up to $95,000 per beneficiary as if it were spread over five years (5 x $19,000). Together that is $190,000 per child, $380,000 for both children, in a single year.

The trade-off is flexibility. The five-year election front-loads tax-free growth, but other gifts from the same parents to those children through 2030 then generally count against the lifetime exemption, apart from any inflation increase in the annual exclusion in later years. Grandparents who also want to fund the children’s 529s have their own exclusions and are not affected.

The outright UTMA row is the one we would slow down on. It uses no tax, but the money belongs to the child, and in California the custodianship generally ends at 18, or up to 21 if the transfer document says so (Cal. Probate Code 3920.5). Investment income in the account is also subject to the kiddie tax: for 2026, a child’s unearned income over $2,700 is taxed at the parents’ rate (Rev. Proc. 2025-32). At this family’s income (about $1,067,800 of taxable income after the $32,200 standard deduction for 2026), the parents’ top federal rate is 37%, which applies to interest and short-term gains above $2,700; qualified dividends and long-term gains are taxed at the parents’ capital gains rate, 20% at this income for 2026. California tax comes on top.

California and Washington: where the state rules change the picture

California does not impose its own gift or estate tax, so the federal rules above are the whole gift tax picture. The state matters in two other ways. First, community property rules decide whose gift it is, as in the example. Second, California gives no state deduction for 529 contributions, so the case for funding a 529 rests on tax-free growth for qualified education costs, not on a state deduction (see the status of SB 529, which would have created one and died).

Washington has a state estate tax with a much lower threshold than the federal one: an exclusion of $3,076,000 for deaths from January 1 to June 30, 2026, and $3,000,000 for deaths from July 1 to December 31, 2026 (WA Department of Revenue). A Seattle household with a house, retirement accounts and vested Amazon or Microsoft stock can pass that number well before the federal one. That makes the timing of lifetime gifts a real estate-planning topic for Washington families, one to work through with an estate attorney who can confirm how gifts made during life are treated under current Washington law.

Form 709: when you need it and what happens if you missed one

You need a Form 709 for a year if you gave any one person more than the annual exclusion, made the 529 five-year election, gave a future-interest gift (most gifts into a trust without withdrawal rights), or want to split gifts with your spouse. Each spouse files their own return; there is no joint gift tax return. The return is due April 15 of the year after the gift, and an extension of your income tax return automatically extends the 709 as well (Form 709 instructions).

If you are searching for 2023 figures because a large 2023 gift was never reported, the usual fix is to file the late 2023 Form 709. When no gift tax was owed, there is typically little or no penalty, because the main penalties are calculated on tax due. Filing still matters: it records how much of your lifetime exemption you used, which your executor will need later, and it starts the clock on the IRS’s ability to question the value of the gift. A CPA can confirm the right steps for your specific year.

Common mistakes we see at this income level

• Treating the exclusion as a ceiling. Families hold back a sensible gift to stay under the exclusion when the only consequence of going over is a form.
• Superfunding a 529 and then forgetting about it. A birthday check from the parents into the same 529 the next year can exceed the remaining room and trigger another 709.
• Putting large sums in a UTMA for a child under 12. The tax result is fine. The problem is control at 18 or 21 and kiddie tax drag along the way. A trust or a 529 often fits the goal better (see what happens to a UTMA when the child turns 21).
• Using the wrong year’s number. The exclusion moved from $17,000 in 2023 to $19,000 for 2025 and 2026. Check the year of the gift, not the year you file.

What to write down for your children

A 529 balance tells your children how much you saved. It does not tell them why you chose a 529 over a UTMA, why you superfunded in a year when RSUs vested, or what you hope the money pays for. A short note filed with each year’s gift (amount, account, reason, and what you would want them to do with it) turns a gift tax decision into something they can learn from. As Kevin puts it: “Your kids don’t need to inherit your portfolio. They need to inherit your decision-making process.”

That note is the kind of record the FamilyKnowledge® System at Age Five Family Office™ is built to keep, alongside the gift log your executor will need anyway.

Frequently asked questions

Was the 2023 gift limit $17,000 per person or per couple?

Per person. In 2023 each giver could give $17,000 to each recipient without filing Form 709. A married couple could give $34,000 to the same recipient, either by each spouse giving from their own funds, by giving community property (treated as half from each spouse), or by electing gift splitting, which itself requires filing Form 709.

Do I pay tax if I gave one person more than $17,000 in 2023?

Almost certainly not. The amount above $17,000 given to any one person should have been reported on a 2023 Form 709, and it reduced your lifetime exemption, which was $12,920,000 per person in 2023 and is $15,000,000 for 2026. Gift tax is owed only once that lifetime amount is fully used. The filing requirement still applied, so check that the return was filed.

Does paying my child’s preschool or private school tuition count against the exclusion?

Not if you pay the school directly. Tuition paid straight to a qualifying school is excluded from gift tax with no dollar limit, per the Form 709 instructions. The rule covers tuition only, not books, supplies or room and board, and it does not cover deposits into a 529 plan, which count as regular gifts.

Next step

Pull your 529 and UTMA contribution history for the last three years and match each gift against the table above. If any one child received more than the exclusion from either parent in a year, confirm a Form 709 was filed. For help deciding between 529s, UTMAs and trusts, see our estate planning and tax management services, or how we help families document these decisions through family governance. Related reading: can a custodian withdraw from a UTMA.

This is general education, and the right move depends on your family’s full picture.

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

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