Annual exclusion

The value of assets that may be transferred by gift from one individual to another each year free from federal gift tax and without any reduction to the individual’s Applicable Exclusion Amount. The Annual Exclusion is $16,000 in 2022. In addition, payments made by an individual for the benefit of another that are made directly to providers of education or medical care services do not count against the Annual Exclusion, nor do they reduce the individual’s Applicable Exclusion Amount.