2027 Gift Tax Exclusion: $20,000 per Recipient, $201,000 for a Noncitizen Spouse

The 2027 annual gift tax exclusion is $20,000 per recipient, set by the IRS in its annual inflation adjustment for tax year 2027. Any one person can give that much to as many people as they like during calendar year 2027 without filing a gift tax return or touching their lifetime exemption. A married couple who elect gift splitting can give $40,000 to each recipient. The 2026 figure was $19,000 per recipient.

Two other 2027 numbers matter more for immigrant families. Gifts to a spouse who is not a U.S. citizen get a separate annual exclusion of $201,000 for 2027, compared with $194,000 in 2026, because the unlimited marital deduction that citizen spouses enjoy does not apply to them. And the lifetime estate and gift tax exemption, the basic exclusion amount, is $15,480,000 per person in 2027, the first inflation adjustment on top of the $15,000,000 base that the One Big Beautiful Bill Act (P.L. 119-21) wrote into the law for 2026.

A third set of rules runs the other way. A U.S. taxpayer who receives money from abroad owes no U.S. tax on a genuine gift, but must report it on Form 3520 once gifts from foreign individuals pass $100,000 in a year, or once gifts from foreign corporations or partnerships pass $21,240.31 for 2027. The penalty for missing that form is steep, and it falls on families who often had no idea a form existed.

This guide covers the 2027 figures, who files Form 709 and when, how gift splitting works and who cannot use it, and how gifts between the United States and India are treated on each side of the transfer. For the year now ending, see our 2026 gift tax exclusion guide, which covers gifts made through December 31, 2026.

The 2027 gift and estate tax figures

The IRS publishes these amounts each fall in the same revenue procedure that sets the 2027 tax brackets and standard deduction. The annual exclusion moves only in $1,000 steps, so in some years it stays flat even when prices rise; the other figures adjust every year. The amounts apply to gifts made from January 1 through December 31, 2027, and are reported on returns filed in 2028.

Keep the three gift-giver buckets separate. The annual exclusion is a per-recipient allowance that resets every January. The noncitizen spouse exclusion replaces the annual exclusion only for gifts to your own spouse when that spouse is not a U.S. citizen. The lifetime exemption is a single pool, shared between gifts made during life and the estate at death, that absorbs whatever you give above the annual amounts.

How the annual exclusion works

The exclusion is counted per donor, per recipient, per calendar year. A parent can give $20,000 to a son, the same to the son’s wife and the same to each grandchild in 2027, and none of it needs a return. What counts is the total each recipient got from you during the year: ten transfers that add up to more than the limit cross it just as surely as one large wire.

Only gifts of a present interest qualify, meaning the recipient can use the money or property now. Cash, a car or a share of a house handed over outright qualify. A gift into most trusts, where the beneficiary must wait, is a future interest: it gets no annual exclusion and must be reported on Form 709 whatever its size.

Some payments never count at all. Tuition paid directly to a school (in the United States or abroad) and medical bills paid directly to the provider, including health insurance premiums, are excluded without limit and do not use any of the annual exclusion. Hand the student or patient the money instead and it becomes an ordinary gift. Gifts to a spouse who is a U.S. citizen are fully covered by the marital deduction and need no return.

Going over the exclusion rarely means a tax bill. The excess is a taxable gift that you report on Form 709, and it is subtracted from your lifetime exemption of $15,480,000. Gift tax, at rates that top out at 40 percent, is due only after that whole pool is used up.

Gifts to a spouse who is not a U.S. citizen

This is the rule that catches mixed-status couples. When both spouses are U.S. citizens, one can give the other any amount, a house or a brokerage account, with no tax and no return. When the receiving spouse is not a U.S. citizen, the law (Internal Revenue Code section 2523(i)) removes the unlimited marital deduction and allows a capped annual exclusion instead: $201,000 for 2027.

The cap turns on the recipient’s citizenship, not on immigration status in general. A green card holder spouse, an H-4 spouse and a spouse living abroad are all noncitizens for this rule. The donor’s own status does not change the cap, so a U.S. citizen giving to a green card holder wife is limited to $201,000 for the year, the same as an H-1B worker giving to an H-4 husband.

Ordinary household life can cross the line without anyone noticing. Retitling the family home into both names, paying off a mortgage on a house the noncitizen spouse owns, or moving a large sum into that spouse’s sole account can each be a gift to the spouse. Above $201,000 in 2027, the donor files Form 709 and the excess reduces the donor’s lifetime exemption. Our earlier explainer on the noncitizen spouse limit walks through those household scenarios for 2026, and the same mechanics apply in 2027.

Gift and estate tax use a different residency test from income tax. For income tax, a green card or the substantial presence test makes you a resident. For gift and estate tax, a noncitizen is a resident only if he or she is domiciled in the United States, meaning living here with no present intention of leaving (Treasury Regulation section 25.2501-1(b)). Many green card holders meet that test; some long-term visa holders may too. A spouse who is a U.S. income tax resident is not automatically a gift tax resident, and the difference decides who can split gifts and how a nonresident donor is taxed.

Gift splitting for married couples

Gift splitting lets a married couple treat a gift made by one spouse as made half by each. One spouse can write a check for $40,000 to a child in 2027, the couple elects to split it, and each spouse is treated as giving $20,000, fully inside two annual exclusions.

The election has conditions that many cross-border couples fail:

• Both spouses must be U.S. citizens or residents. The IRS says gift splitting can only be used if both spouses are U.S. citizens or residents; if either spouse is a nonresident not a citizen at the time of the gift, splitting is unavailable.
• It takes a Form 709 even when no tax is due. You must file a return to split gifts, regardless of their amount, and the consenting spouse signs a Notice of Consent.
• It is all or nothing for the year. The consent covers every gift either spouse made to third parties during the calendar year while married, not just the one you want to split.
• It creates shared liability. Once consent is effective, each spouse is jointly and severally liable for the whole year’s gift tax.

Splitting is often unnecessary. If both spouses have money in their own names or in joint accounts, each can simply give $20,000 directly to the same person, which reaches the same $40,000 total with no election and, if nothing else is reportable, no Form 709 for either spouse.

When you must file Form 709, and the deadline

Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return, is filed by the person who gave the gift, never by the recipient, and spouses cannot file a joint return. According to the Form 709 instructions, you do not need to file if all of these are true: you made no gifts to your spouse during the year, you gave no more than the annual exclusion to any one person, and every gift was a present interest. For 2027 gifts, file if any of these happened:

• You gave more than $20,000 to any one person other than your spouse.
• You gave more than $201,000 to a spouse who is not a U.S. citizen, or gave that spouse any future interest.
• You and your spouse want to split gifts.
• You made any gift of a future interest, such as most transfers into a trust.
• You want to make a 5-year election for a large contribution to a 529 plan.

Form 709 is due by April 15 of the year after the gift, moving to the next business day when April 15 falls on a weekend or legal holiday. For gifts made in 2027, April 15, 2028 is a Saturday and the Emancipation Day holiday is observed on Monday, April 17, so the due date works out to Tuesday, April 18, 2028, the same shift that happened in 2023. A Form 4868 extension for your income tax return also extends Form 709 to October; if you are not extending your income tax return, use Form 8892. An extension to file is not an extension to pay any gift tax owed.

A Form 709 that shows no tax is still worth filing correctly. It is the record of how much lifetime exemption you have used, and the executor of your estate will rely on it years later. Our Form 709 filing basics covers the return line by line.

Receiving gifts from abroad: Form 3520

U.S. gift tax falls on the giver, so a U.S. person who receives a gift from parents in India, the Philippines or Mexico owes no U.S. income or gift tax on it. The obligation is an information return. A U.S. person, which includes citizens, green card holders and visa holders who are U.S. tax residents, files Form 3520 for any year in which they receive:

• More than $100,000 in total from a nonresident alien individual or a foreign estate, counting gifts from people related to that person. This threshold is set in IRS guidance and is not indexed, so it is the same in 2027.
• More than $21,240.31 in 2027 from foreign corporations or foreign partnerships. This is the inflation-indexed threshold in Internal Revenue Code section 6039F, and it was $20,573 for 2026.

The $100,000 count is aggregated. The Form 3520 instructions require you to combine gifts from foreign individuals you know or have reason to know are related, so $60,000 from a father and $45,000 from a mother is $105,000 and must be reported, even though neither parent crossed the line alone. Form 3520 is due on the same day as your income tax return and follows your income tax extension.

Missing the form costs 5 percent of the gift for each month it is late, up to 25 percent, unless you can show reasonable cause. On a $200,000 gift for a down payment, that is up to $50,000 in penalties on money that was never taxable. Read our explainer on Form 3520 for gifts from parents in India and the separate guide to Form 3520 penalties before the money arrives, not after.

Gifts between the U.S. and India: both sides of the transfer

Family money between the United States and India is usually checked by two systems at once. The U.S. taxes the giver (when the giver is a U.S. citizen or domiciled resident) and asks large recipients to report. India taxes the recipient, under the Income-tax Act, 2025, in force from April 1, 2026. Its section 92(2)(m), which carries forward the old section 56(2)(x), treats gifts as income unless an exemption applies.

India’s list of exempt relatives covers a spouse, brothers and sisters of the recipient or the spouse, brothers and sisters of either parent, any lineal ascendant or descendant of the recipient or the spouse, and the spouses of all of those people. Cousins, nephews and nieces are not on it. Our explainer on India’s new section 92(2)(m) gift rules covers property and share gifts as well.

Parents in India who are not U.S. citizens or domiciliaries are generally outside U.S. gift tax on money sent from an Indian account. A nonresident noncitizen owes U.S. gift tax mainly on gifts of U.S. real estate and tangible property located in the United States, has an annual exclusion but no lifetime exemption against that tax, and reports any taxable gift on Form 709-NA. A parent who gives a U.S. apartment to a child, rather than cash, should get advice first. On the Indian side, banks can collect tax at source on large LRS remittances, which the remitting parent can claim against Indian tax. For the U.S. side of sending money home, see our guide to NRI transfers to Indian parents.

Common mistakes

• Treating the exclusion as per household. It is per donor and per recipient. Two parents giving one child $20,000 each are fine; one parent giving $40,000 from a sole account needs a Form 709 to split.
• Assuming a green card spouse gets the unlimited marital deduction. Only a U.S. citizen spouse does. Everyone else is capped at $201,000 for 2027.
• Splitting gifts when one spouse is a nonresident. The election is invalid if either spouse is a nonresident noncitizen at the time of the gift.
• Paying tuition to the student instead of the school. Only payments made directly to the institution are excluded without limit.
• Missing Form 3520 because no single wire topped $100,000. The threshold is a yearly total, and gifts from related foreign persons are combined.
• Calling a loan a gift, or a gift a loan. Write down which it is when the money moves. A family loan with a repayment schedule is not a gift; a “loan” that is never repaid may be one.
• Skipping Form 709 because no tax is due. The return is required above the exclusion even when the lifetime exemption covers everything.

What to do before you give in 2027

Start a simple list on January 1: date, recipient, amount, whether the payment went to the person or directly to a school or hospital. Total it by recipient in December. If any line passes $20,000, or $201,000 for a noncitizen spouse, put Form 709 on your 2028 filing calendar for April 18, 2028.

If money is coming to you from family abroad, add up every 2027 transfer from relatives as it lands, and keep the bank records showing who sent it. Over $100,000 from foreign individuals means Form 3520 with your 2027 income tax return. Large or unusual transfers, such as property, business interests or anything from a foreign company, are where a CPA or tax attorney who handles cross-border families is worth the fee.

Bigger estate questions, including the lifetime exemption for noncitizens, trusts for a noncitizen spouse and U.S.-India estate planning, are beyond the annual rules covered here. For now, our explainer on cross-border estate tax for U.S. and India assets is the best starting point.

Frequently Asked Questions