Gift Tax Calculator

Introduction to 2026 federal gift tax exclusions and lifetime exemption

The federal gift tax rules distinguish between a gift that must be reported and a gift that produces a payment. A transfer for less than full value can be a gift, but the first layer of protection is the annual exclusion. In 2026, a donor can generally give up to $19,000 of present-interest property to each recipient during the calendar year without creating a taxable gift. The limit is per recipient, not a single $19,000 allowance for all gifts. Giving $19,000 to six people can therefore be fully excluded, while giving $114,000 to one person leaves a taxable amount.

The second layer is the federal basic exclusion amount. This calculator uses $15,000,000 per donor for 2026. A taxable gift usually uses part of that lifetime shelter and calls for Form 709; it does not ordinarily mean that the donor writes a check to the IRS. Gift tax is payable only when the donor’s cumulative taxable gifts exceed the available basic exclusion amount. The same shelter is relevant at death, so lifetime taxable gifts generally reduce what remains available for the estate-tax calculation.

That difference matters because the exemption is delivered as an applicable credit, not as a deduction that restarts the tax brackets. The unified rate schedule applies to cumulative taxable gifts from its first dollar. At today’s exemption level, the credit runs out in the 40% bracket, so each taxable dollar beyond the exemption is generally taxed at 40%. The calculator follows that credit method rather than applying a low bracket rate to only the amount over the exemption.

How to use this 2026 gift tax calculator for one donor’s annual gifts

Choose the year of the transfer first. The year selector fills the annual exclusion and basic exclusion figures used by the calculator, but the fields remain editable for a documented planning assumption. Enter the fair market value of the gift made to each recipient on the gift date, then enter how many recipients receive that same value. If recipients receive different amounts, run separate scenarios because an unused annual exclusion for one recipient does not move to another.

The direct tuition or medical field is for a qualifying amount that is already included in the gift value entered above and was paid directly to the school or medical provider. That amount is removed before the annual exclusion is applied. A payment reimbursed to a student or patient does not receive this treatment, and tuition does not include room, board, books, or similar expenses. Enter prior taxable gifts as the running amount reported after exclusions and deductions, rather than every informal gift ever made.

Select gift splitting only when spouses have a valid section 2513 election and both will consent. The calculator then shows a couple-level result with a doubled annual exclusion per recipient and two basic exclusion amounts. In an actual return, the allocation is reported by each spouse and both spouses generally file Form 709. The result panel identifies the current taxable gift, remaining shelter, credit use, and estimated tax due in that order.

The federal gift tax formula and unified-credit calculation

Let $G$ be gift value per recipient, $D$ direct qualifying payments, $n$ recipients, $E$ the annual exclusion, and $s$ equal 2 for a split gift or 1 otherwise. The current-year taxable gift is:

The nested $\max$ terms prevent a negative gift or an unused recipient exclusion from offsetting another gift. If $P$ is prior taxable gifts, cumulative taxable gifts are:

The tentative tax function $\tau \left(x\right)$ uses the section 2001(c) bracket containing the total. With base tax $b_k$, floor ${\ell }_k$, and rate $r_k$, it is:

The applicable credit $A$ is the tentative tax on basic exclusion amount $B$. For an exemption above $1,000,000, the top bracket expression is:

The current transfer’s tax after remaining credit is:

An equivalent view is:

When cumulative gifts are above a modern basic exclusion amount, the useful check is:

The calculator’s implementation also states each intermediate amount explicitly. This makes clear that direct-payment treatment is limited to the amount actually included in the entered gift and that gift splitting changes the effective exclusion and exemption, rather than changing the number of recipients.

Worked example: a 2026 gift to two children with gift splitting

Assume one spouse gives $500,000 of stock to each of two adult children in 2026, no direct tuition or medical amount is included, there are no prior taxable gifts, and the spouses elect gift splitting. The effective annual exclusion is $2\times \mathrm{19,000}=\mathrm{38,000}$ per child. Each child therefore has a taxable gift of $\mathrm{500,000}-\mathrm{38,000}=\mathrm{462,000}$, for a total current-year taxable gift of $2\times \mathrm{462,000}=\mathrm{924,000}$.

The couple-level exemption shown by this calculator is $2\times \mathrm{15,000,000}=\mathrm{30,000,000}$. Since the $924,000 cumulative taxable gift is below that amount, estimated federal gift tax is zero, but the transfer uses $924,000 of combined shelter and normally requires reporting. Directly paying a separate $62,000 tuition bill to the university would be outside this gift calculation under section 2503(e), provided the payment qualifies.

For contrast, a donor with $14,600,000 of prior taxable gifts who makes a $1,500,000 gift to one child has a $1,481,000 taxable gift after the $19,000 exclusion. Cumulative taxable gifts become $16,081,000, or $1,081,000 above the 2026 exemption. Here $\tau \left(C\right)=\mathrm{6,378,200}$, while the 2026 credit is $A=\tau \left(\mathrm{15,000,000}\right)=\mathrm{5,945,800}$. The estimated tax is $432,400, which equals 40% of the overshoot.