The IRS has released annual inflation adjustments for 2024. These include increased gift, estate and generation-skipping transfer tax (“GST”) exemptions and annual gift tax exclusions. The changes are as follows:

The federal gift and estate tax exemption and GST exemption increased to $13,610,000 for an individual (from $12,920,000 in 2023). This means that with proper estate planning, a married couple now has $27,220,000 of available exemption. Note that the exemptions are scheduled to reduce by half as of January 1, 2026, unless Congress changes the law.

The federal annual gift tax exclusion increased to $18,000 (from $17,000 in 2023). As a result, individuals are now able to give $18,000 per year ($36,000 for a married couple) to any number of persons (outright or through withdrawal rights in a trust) without using any gift tax exemption.

The annual gift tax exclusion for gifts to non-U.S. citizen spouses increased to $185,000 (from $175,000 in 2023). (Note that gifts made to a U.S. citizen spouse are not taxable in any amount whether made during the spouse’s lifetime or at death.)

Under Connecticut law, as of 2023, the Connecticut gift and estate tax exemption match the current federal exemption. The New York estate tax exemption increased to $6,940,000 (from $6,580,000). For more information, please contact Lisa F. Metz or another BW attorney.