How much money can I gift to someone?
Updated: Oct 25
In 2023, you can gift $17K, 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 $18K, 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 $12.92M in 2023 for the feds and for CT. You'll pay gift taxes only after all of your yearly gift overages (the $1K over the $18K) add up to more than the lifetime exemption amount.
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 $17K your daughter, then $17K to her husband, then $17K 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 $34K to their daughter, then $34K to her husband, then $34K to her three kids, each. These gifts could be seen as coming from 2 people; each spouse gets a $17K 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.