by Peggy Lennon
This year, the One Big Beautiful Bill (OBBB) directly increased the lifetime exclusion, which is the base amount that one can give free of federal gift and generation-skipping transfer (GST) tax, either at lifetime or at death. The OBBB did not increase other dollar amounts in the estate, gift and GST tax codes, such as the annual exclusion amount from gift taxes. As to the unaffected amounts, the IRS applied its standard formula for making annual inflation adjustments, although application of the IRS formula did not impact the amount of the annual exclusion for 2026.
As a result of OBBB, in 2026, the lifetime exclusion will be $15,000,000 for individuals (up from $13,990,000) and $30,000,000 for a married couple (up from $27,980,000). IRS inflation adjustments will apply to these amounts starting in 2027. In the case of a person who has already maxed out lifetime gifts in 2025, he or she may now give away another $1,010,000 tax-free in 2026 (which amounts to $2.02 million per couple).
The annual gift tax exclusion allows an individual to give a certain amount per recipient tax-free without using any of his or her lifetime exemption. For 2025, the amount is $19,000 per recipient, and the amount will remain at $19,000 for 2026. For married couples, this means that they can give $38,000 per year per recipient in 2026. A special annual exclusion amount for gift to a non-citizen spouse did receive a small inflation bump – for 2026, it will rise to $194,000.
Author: Peggy Lennon
