How much money can I gift to someone?
Updated: Sep 20
In 2022, you can gift $16K, to one person, without filing a gift tax return and without paying gift taxes. It's not income because the gift recipient didn't sell a good or perform a service, so there's no income tax due from the gift recipient.
If you gift $17K, to one person, you'll file a gift tax return, and you still won't pay gift taxes yet. That $1K overage counts towards a lifetime exemption amount of $12.06M in 2022 for the feds and $9.1M in 2022 for CT. You'll pay gift taxes only after all of your yearly gift overages (the $1K over the $16K) add up to more than the lifetime exemption amount ($9.1M in 2022 for CT).
If you're worried about triggering the gift tax, you could gift to several people that you might expect to benefit from the money. Like gifting $16K your daughter, then $16K to her husband, then $16K to her three kids, each. If the gift giver is married, then your yearly and lifetime exemptions are doubled. So a married couple could give $32K to their daughter, then $32K to her husband, then $32K to her three kids, each. These gifts could be seen as coming from 2 people; each spouse gets a $16K per person per year exemption.
Finally, gifts to paid to charities, political organizations, or gifts paid on behalf of someone directly to a school or doctor are non taxable.