How Much Can You Gift Before Paying Tax?

In the United States, gift taxes are imposed in some states and at the federal level. As of 2023, Minnesota does not have a gift tax. Minnesota does, however, have a three year lookback for taxable gifts. So, what are taxable gifts?

Taxable Gifts

Any gift in excess of $17,000 in value to any individual within the year is a taxable gift. Any gift of $17,000 or less is your annual gift tax exclusion amount. If a married couple is making a gift together to an individual recipient, then they can give away up to $34,000 without being required to file a gift tax return.

When you exceed your annual gift tax exclusion amount, you have made a taxable gift. That does not mean you will pay gift tax. It simply means that you must file a gift tax return. If you have used up all of your federal unified estate and gift tax exemption (currently in excess of $12 million), then you may need to pay gift tax.

Minnesota Gift Tax

In Minnesota, those taxable gifts are pulled back into your estate when you die if you made those taxable gifts within three years of death. If they were made more than three years prior to your death, they are not included in your Minnesota estate!

Planned Giving

When it comes to gift giving, it's important to keep the gift tax exclusion amount in mind. By understanding gift tax regulations, you can ensure that your gift-giving activities are maximizing your saving potential and coordinated with your overall estate plan. In Minnesota, there is no gift tax - however, if you give a gift that exceeds $17,000 in value then this gift may be included in your estate if you die within three year of making the gift.

We work with gift and estate tax laws every day. Interested in learning more? Contact us here. Subscribe to our YouTube channel, follow us on Facebook or sign up for our quarterly newsletter. ​​​​​