Anyone planning to hand money or property to children, grandchildren or other relatives this year has a calendar to watch. The federal gift tax has a yearly allowance for each person who receives a gift, and an allowance not used by the end of the year does not carry over to the next one.

For 2026, the Internal Revenue Service sets that allowance at $19,000 per person. The open question for anyone giving late in the year is what counts as finished by December 31, and whether a gift that is still in motion makes it into 2026 or slips into 2027.

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The $19,000 figure and what it covers

The IRS announced in its 2026 inflation adjustments that the annual exclusion for gifts stays at $19,000 for tax year 2026. The amount applies to each recipient, not to the giver’s total for the year.

That distinction matters. A grandparent with four grandchildren can give each of them $19,000 in 2026, for $76,000 in all, and none of it counts against anything. The $19,000 limit applies separately to every person on the receiving end.

The IRS gift tax FAQ gives the same example in its own words: a parent who gives each child $19,000 in 2026 uses the annual exclusion on every one of those gifts. The same page says the amount for 2026 is unchanged from 2025.

Why December 31 is the cutoff

The exclusion is a calendar-year allowance. Gifts are measured from January 1 through December 31, and the IRS does not let an unused 2026 allowance roll into 2027. A gift made on January 2 uses the 2027 allowance instead, which is a separate amount.

For gifts split between spouses, the clock is the same. The Form 709 instructions say a spouse’s consent to split gifts is effective for the entire calendar year. The IRS FAQ says each spouse gets the annual exclusion on a split gift, which works out to $38,000 per recipient in 2026 for a married couple.

What makes a gift complete

The word “complete” is the sticking point. Federal gift tax regulations, in 26 CFR 25.2511-2, say a gift is complete when the giver has parted with dominion and control over the property so that no power remains to change who gets it.

A promise to give does not meet that test. Neither does a transfer the giver can still reverse or redirect. The Form 709 instructions say the gift tax period starts on the date the transfer is a completed transfer for gift tax purposes, not the date someone first decided to give.

In practice, that means a gift planned for December should be finished with room to spare. Money that is still waiting on a bank transfer, a signature or a title change when the year ends may be treated as a 2027 gift. Anyone unsure how a particular transfer will be treated can ask a tax professional before the last week of the year.

Gifts that fall outside the $19,000 limit

The IRS FAQ lists several transfers that are not taxable gifts at all. Tuition or medical expenses paid for someone else fall under the educational and medical exclusions, and gifts to a spouse are also listed as excluded. Those do not use up the $19,000 allowance.

A gift above $19,000 to one person is not automatically taxed. The IRS says the basic exclusion amount rises to $15,000,000 for gifts in calendar year 2026, so a larger gift generally reduces that lifetime figure rather than producing a bill. The same $15,000,000 figure applies to estates of people who die in 2026, according to the inflation-adjustment release.

Filing a gift tax return

Form 709 is the gift tax return. The Form 709 instructions say it is generally filed between January 1 and April 15 of the year after the gift, and the due date moves to the next business day when April 15 lands on a weekend or holiday.

Under the instructions for 2025, no return is required when a person made no gifts to a spouse, gave no more than the annual exclusion to any one recipient, and made only gifts of present interests. A gift of more than $19,000 to one person, or a split gift, generally means a return is due even if no tax is owed. The IRS also points people to the instructions for gift splitting rules.

The IRS has not published a figure for 2027 in these pages, so the $19,000 amount is pinned to 2026 and should not be assumed for next year.

Will the gift be finished by December 31, and does the paperwork match?

A gift meant to use the 2026 exclusion has to be completed, not merely promised, by December 31, or the allowance for that recipient goes unused. Beneficiary forms, account titles and a house deed can also send money somewhere different from what the giver intended.

The Pass It On Checklist walks through ten moves so what a person owns goes to the people they choose, including every beneficiary form checked with a primary and a backup named, and the inherited-IRA rules heirs will face, including the 10-year rule. It also has a 2026 figures page with the gift and estate limits and a worksheet for the beneficiary audit.

Check every beneficiary form with the Pass It On Checklist →

This article was produced with AI assistance and edited for accuracy against the sources linked above.