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2022 Annual Gift Tax and Estate Tax Exclusion Amounts

Gifting can be a useful tool in estate planning, but requires careful attention when doing so. I always advise my clients to speak with me (their estate planning attorney) as well as their accountant before making any large gifts.

Gift Tax Exclusion Amount: You can now gift up to $16,000.00 per person for the 2022 calendar year without filing a gift tax return, and couples can gift up to $32,000.00 together per person. You may gift more than $16,000.00, but this is the maximum amount that you can gift per person without being required to file a gift tax return. This is an increase from $15,000.00 a year.

Estate Tax Exclusion Amounts: The estate tax exclusion for individuals that pass away in 2022 is now 12,060,000.00. This means that an individual can gift up to $12,060,000.00 in his lifetime without having to file an estate tax return at the time of death. The exclusion has increased to $24,120,000 for couples for the 2022 calendar year. This in an increase from $11,700,000.00 for individuals and $23,400,000.00 for couples in 2021. For most people, these increases are insignificant as most do not have $12 million+ (or $23.4 million+) to give away in their lifetime. Again, before making any large gifts, you should always consult with your estate planning attorney and accountant.

Final note: Clients often gift away their assets right before death to avoid Pennsylvania's inheritance tax. However, gifts made within one year of death are considered to be made in anticipation of death and are still subject to inheritance tax (minus a $3,000.00 exclusion per person). Thus, it is not advisable to "gift away" significant funds right before death as it causes unnecessary complications.


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