When Is Gift Tax Due? Filing and Payment Deadlines

The federal gift tax system requires understanding when transfers of property or money become subject to tax obligations. The gift tax aims to prevent individuals from transferring significant wealth during their lifetime without incurring tax, thus complementing the estate tax. It applies to any transfer of money or property to another person where the giver does not receive at least equal value in return. For many, the gift tax is a consideration for substantial wealth transfers, making awareness of rules and deadlines important for financial planning.

Understanding When Gift Tax Applies

A gift tax obligation or filing requirement often arises when the value of a gift exceeds specific thresholds. The IRS provides an annual gift tax exclusion, allowing individuals to give a certain amount to any number of people each year without triggering a taxable gift or requiring a gift tax return. For the 2024 calendar year, this annual exclusion is $18,000 per recipient, increasing to $19,000 for 2025. Gifts at or below this amount do not require any reporting to the IRS.

When a gift exceeds the annual exclusion, it reduces the giver’s lifetime gift tax exemption. This lifetime exemption is a cumulative amount that can be given away during one’s life, or passed on at death, without incurring federal gift or estate tax. For 2024, the lifetime gift and estate tax exemption is $13.61 million per individual, rising to $13.99 million for 2025. Even if no tax is immediately due because the gift falls within the lifetime exemption, a gift tax return (Form 709) is required to report the transfer and track the amount of lifetime exemption used.

This includes direct transfers of cash, real estate, stocks, or other assets. Certain transfers are exempt from gift tax and do not count against the annual exclusion or lifetime exemption. These include direct payments for qualified educational expenses, such as tuition, or for medical care expenses. Gifts to a U.S. citizen spouse are also exempt, as are gifts to political organizations.

Key Deadlines for Filing and Payment

The standard deadline for filing Form 709, the U.S. Gift (and Generation-Skipping Transfer) Tax Return, is April 15 of the year following the gift. For instance, gifts made during 2024 require a Form 709 to be filed by April 15, 2025. This deadline applies regardless of when the gift was made during the year.

An automatic six-month extension for filing Form 709 can be obtained by filing Form 8892, Application for Automatic Extension of Time to File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax. This extension moves the filing deadline to October 15. This extension applies only to filing the return, not to payment of any gift tax due.

Any gift tax owed must be paid by the original April 15 deadline, even if an extension to file the return has been granted. Failure to pay the tax by this date may result in penalties and interest charges on the unpaid amount. If the donor dies during the year the gift was made, the gift tax return is due no later than the due date for the donor’s estate tax return, including any extensions.

Preparing to File Your Gift Tax Return

Before filing Form 709, gather information and documentation to ensure accuracy. You will need the identifying information for both the donor and each donee, including their names, addresses, and Social Security Numbers or Taxpayer Identification Numbers. A description of the gifted property is also required, specifying whether it was cash, stock, real estate, or another asset. The date of each gift, along with its fair market value at the time of transfer, must also be documented.

Accurate valuation of gifted assets is for tax purposes. For instance, publicly traded securities can be valued based on market quotes on the date of the gift, while real estate may require a professional appraisal to determine its fair market value. Any consideration received in exchange for the gifted property should also be reported. Information regarding any prior taxable gifts made by the donor in previous years is necessary to calculate the cumulative lifetime exemption used.

Form 709 and its instructions are available on the IRS website. Once information is collected and assets are valued, complete the sections of Form 709. This includes reporting the details of each gift, applying the annual exclusion, and tracking the use of the lifetime exemption. Completing these sections ensures the form reflects the correct tax liability, if any, and the remaining lifetime exemption amount.

Submitting Your Gift Tax Return and Payment

Once Form 709 is completed, it must be submitted to the IRS. Form 709 cannot be e-filed and must be mailed. The mailing address for Form 709 depends on your state of residence, and these addresses can be found in the instructions for Form 709 or on the IRS website. Keep a copy of the submitted form and all supporting documentation for your records.

If any gift tax is due, payment must accompany the return or be made electronically by the April 15 deadline. Several payment methods are available. You can make a payment directly with the return by enclosing a check or money order. For electronic payments, options include IRS Direct Pay, which allows payments directly from a checking or savings account without registration.

Another electronic option is the Electronic Federal Tax Payment System (EFTPS), a free service provided by the U.S. Department of the Treasury. EFTPS allows individuals and businesses to schedule tax payments up to 365 days in advance and provides a secure way to track payment history. Ensure any payment, whether mailed or electronic, is sent by the due date to avoid penalties.