How much can you give your kids tax-free? The 2026 numbers

The annual exclusion: $19,000 per giver, per recipient

For 2026 the annual gift-tax exclusion is $19,000. It applies per donor, per recipient, per year: a married couple can give each child $38,000, every year, to any number of children (and children-in-law, and grandchildren) — no tax, no return, no dent in any lifetime allowance. A couple with three married children and six grandchildren can move $456,000 a year this way, indefinitely.

Two mechanics worth knowing: gifts above $19,000 from one spouse can still be treated as made half by each ("gift-splitting"), but that election itself requires filing Form 709; and the exclusion is use-it-or-lose-it — unused 2026 capacity doesn't roll into 2027.

Above the exclusion: the $15M lifetime exemption

Gifts beyond the annual exclusion don't trigger tax — they file. Form 709 reports the excess, which is subtracted from your lifetime estate-and-gift exemption: $15 million per person ($30 million per couple) in 2026, made permanent at that level by OBBBA and indexed for inflation after. Actual gift tax (40%) only applies after a person has given away the full $15M above their annual exclusions. For most households the practical meaning is simple: large gifts are a bookkeeping event, not a tax event — but the bookkeeping is mandatory, and skipped 709s are a mess to reconstruct later.

The unlimited lane: pay tuition and medical directly

Payments made directly to an educational institution for tuition, or directly to a medical provider or insurer, are excluded from gift tax entirely — no limit, and they don't touch the $19,000 exclusion or the lifetime exemption. The one rule that matters: the check must go to the school or provider, never through the child. A grandparent covering $70K of tuition directly and giving the same grandchild $19,000 in the same year is fully within the rules.

What to give matters as much as how much

The same dollar amount can carry very different tax futures depending on the asset:

• Cash is clean and simple — no basis questions, spendable immediately.
• Appreciated stock carries your basis with it. If your child sells, they pay capital-gains tax on your gain — possibly at their lower rate (though the kiddie tax prices most investment income of children under 19, or students under 24, at the parents' rates). Compare against holding to death, where the step-up in basis erases the gain entirely — gifting your most-appreciated shares can be exactly backwards for the estate picture.
• 529 contributions are gifts to the beneficiary and support superfunding: a special election lets you front-load five years of exclusions at once — up to $95,000 per donor ($190,000 per couple) per beneficiary in 2026 — with Form 709 electing the five-year spread.
• Custodial accounts (UTMA/UGMA) are irrevocable gifts the child controls at majority — cheap to open, sometimes regretted at 21.
• Trusts buy control — timing, purpose, protection from creditors and divorces — at the cost of setup and, often, careful drafting so gifts still qualify for the annual exclusion (the classic mechanism is the Crummey withdrawal power). That's attorney territory.

Keep score, or the plan is fiction

A gifting program is a multi-year system: who gave what to whom, which gifts used exclusions versus lifetime exemption, what basis traveled with each asset, which 709s were filed. Formation's household model keeps the moving parts visible — accounts by owner and entity, 529s and custodial accounts in the family picture, and the transfers themselves distinguished from spending — so the January conversation with your CPA starts from a record instead of a memory. Education-only, always; the gifting strategy itself is yours and your professionals'.