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Gift Tax: Do I have to pay gift tax when someone gives me money?

Gift Tax: Do I have to pay gift tax when someone gives me money? - TaxAct Blog

Updated for Tax Year 2015

Surprise – Mom and Dad gave you a nice check! Maybe it’s enough for dinner, or maybe it’s more of an “early inheritance.”

Either way, do you need to worry about paying tax on your gift?

Annual limits before the IRS takes notice

First, a gift must be quite substantial before the IRS takes notice.

A gift of $14,000 or less in a calendar year (2015 and 2016) doesn’t even count.

If a couple makes a gift from joint property, the IRS considers the gift to be given half from each. Mom and Dad can give $28,000 with no worries.

A couple can also give an additional gift of up to $14,000 to each son-in-law or daughter-in-law.

The effective annual limit from one couple to another couple, therefore, is $56,000 ($14,000 X 4 = $56,000).

Gift Tax: Do I have to pay gift tax when someone gives me money? - TaxACT Blog

Gifts that don’t count

Some transfers of money are never considered to be gifts, no matter the amount.

For purposes of the gift tax, it’s not a gift if:

  • It’s given to a husband or wife who is a U.S. citizen. Special rules apply to spouses who are not U.S. citizens.
  • It’s paid directly to an educational or medical institution for someone’s medical bills or tuition expenses. (It doesn’t have to be a child, or even a relative, for this exception.)

Gift tax is not an issue for most people

The person who makes the gift files the gift tax return, if necessary, and pays any tax.

If someone gives you more than the annual gift tax exclusion amount ($14,000 in 2015 and 2016), the giver must file a gift tax return. That still doesn’t mean they owe gift tax.

For example, say someone gives you $20,000 in one year, and you and the giver are both single. The giver must file a gift tax return, showing an excess gift of $6,000 ($20,000 – $14,000 exclusion = $6,000).

Each year, the amount a person gives other people over the annual exclusion accumulates until it reaches the lifetime gift tax exclusion.

Currently, a taxpayer does not pay gift tax until they have given away over $5.43 million in their lifetime (2015).

Does the gift recipient ever have to pay gift tax?

If the donor does not pay the tax, the IRS may collect it from you.

However, most donors who can afford to make gifts large enough to be subject to gift taxes can also afford to pay the tax on the gifts.

TaxAct makes preparing and filing your taxes quick, easy and affordable so you get your maximum refund. It’s the best deal in tax. Start free now or sign into your TaxAct Account.
About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at,,, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.


  1. I work at adult community and the residents give us employees every year a gift in money now our employer want to tax our cash gift. is that possible

  2. Hi, if we want to give a gift of $26,000 to a friend, can my wife and I each give $13k and avoid the tax? Thank you!

  3. can a US citizen make a cash gift to his wife without any limit who lives with him in US but she is from India

  4. I Have Cancer & a family friend wanted to donate money for future medical travels etc etc
    But he owns a business, and he wants to use this donation as a Tax write off. What type of form do I give them showing their contribution to me when they do their taxes? Is there a specific form with numbers or just a letter of acknowledgement will do?
    Thank You

  5. Can you please talk about the Lifetime gift tax exception and how to apply for it?
    Thank you

  6. my son incurred 125000 in bail and legal fees, my parents gave the money to me to dispurse to him

    my parents file joint taxes and paid taxes on this money. I file joint taxes with my wife and our combined income is about 85000. my son (with legal problems / 19 going on twenty and living at home no going to college yet) and daughter (senior in highschool) are dependents. 56000 could be claimed as a gift

    what can I do to not incur any taxes on the other 44000?

  7. can i receive $14000 from more than 1 family member without having to pay taxes. I am in the process of buying a house and my dad was going to give me $14000 and my brother $14000 for the down payment. Would I have pay taxes since it is coming from 2 different family members?

    • Tina,

      You would not have to pay any taxes whatsoever on any gift received. The only people who would have to worry about taxes in this situation would be the family members but even they won’t have to pay or file a gift tax return because they are allowed to give up to $14,000 per person per year in 2015. The number of family members giving you a gift has no importance whatsoever.


  8. David A. Davis says:

    What, if any, taxes are to be paid on money given to workers from the owner each week during the year and for year after year. Personal checks are written for $300-$3,000 a week to some of the more than a dozen females. Much is supposedly for needs like a new motorcycle for the husband of one, new
    TV for others and some just go on vacations and buy jewelry. Not related with any of them and prefers to use them for groping . It is hard for me to believe these minimum wage girls are buying new cars, dressing nice, I phones etc. when they make min. on 35 – 40 hours a week. Loophole or a week IRS?

  9. My fiancee gave me substantial gift, He is not a US citizen, how much tax would I have to pay?

  10. I have the same question as the last person. My mother in Canada is planning to give me around $100-$150,000. I am residing in the US on a G4 visa. Will I have to pay tax on the gift? Thanks Rhoda

    • Aravinda says:

      Hi Rhoda,

      Did you receive a reply for this question. I am going through the same process and would like to know if I would have to pay a gift tax for $100000.


  11. My Parents live in israel and i live in nyc they want to transfer me money as a gift
    is that a problem for me? who shell i “report” my self so i dont have problem later on
    i need to point out im currently on green card but already in process to become citizen
    thank you in advance

  12. Mary Lee Rieley says:

    Is it a correct assumption that when there are 4 in the family – Son, daughter-in-law- grandchild and grandchild that I can then give 14,000 for each person.


    • That is correct Mary, but that is the limit per year per person. You also get a lifetime exemption of $5.43 million in case you happen to go over that $14,000 threshold. If you do go over the $14,000, you must file a gift tax return. The likelihood of you paying any gift tax though is slim because of the lifetime exemption.


  13. Ashley Tenczar says:

    My Grandmother, whom is still alive, set up paperwork to where my MOM receives the profit from the sale of her condo- which sold two years ago, and was 180,000.
    The tax preparer had to consult a supervisor, etc, and they said they don’t think that the gift means that Mom owes taxes on it- but they said something about the “five year” period of time, which DID pass- being the reason that the inheritance is not taxable.
    Now she got paperwork from the IRS, which isn’t an “audit” but is asking for proof of this or that- but doesn’t say anything about the inheritance- but asks for other proofs such as the “circuit breaker” Senior credit proof.
    ANYONE who can give me feedback on this issue would be helpful!

  14. Duane Francis says:

    If I get a gift of farm land from my parent, is the basis the the date of the gift or the date when my parent inherited it 12 years ago.

  15. RICHARD SEWARD says:


  16. Hi my mom lives in Canada and wants to give me a one time gift of 100,000 – 150,000 dollars

    Is that money taxable for me?

    Is that money taxable for my mom in canada?


    • Nga Nguyen says:

      Hi My parents live in Viet Nam and wants to give me a one time gift of $300,00-$500,00 dollars.
      Have I pay tax for that money?

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