Each year, the IRS considers inflationary adjustments to the estate and gift tax exemption amount and gift tax annual exclusion amount. The 2022 adjusted numbers are:
2022 Exemptions and Exclusions: The estate and gift tax exemption amount has increased to $12.06 million per person in 2022 (from $11.7 million per person in 2021)
2022 generation-skipping transfer tax (GST tax): The exemption amount has increased to $12.06 million per person.
January 1, 2026: If Congress takes no action between today and December 31, 2025, the exemption amounts will revert to pre-2017 Tax Act levels ($5 million per person, adjusted for inflation) of approximately $6.5 million per person.
Gift annual exclusion: Every year an individual is permitted to gift another individual, excluding their spouse, a certain amount without incurring any gift tax liability. Effective on January 1, 2022, the annual exclusion amount increased to $16,000 (up from $15,000). The annual exclusion is a powerful tax-saving tool because the person making the gift can transfer wealth without using any of his or her estate and gift exemption amount and without needing to file a gift tax return. A married couple can make a combined gift of $32,000.
