I'm giving my grandson $30,000 for a home down payment — but I’m told I can't gift more than $19,000 a year without a tax hit. True?

Let’s say Alma wants to give her grandson Byron a $30,000 down payment for a home. In 2026, the annual gift tax exclusion is $19,000. Since $30,000 exceeds that amount, in theory Alma could owe the IRS some extra money just for helping out her grandchild.

In reality, though, experts have indicated there are multiple options for avoiding the gift tax and giving Byron cash without the IRS taking a cut.

Split the gift over two different years

If Alma wants to avoid owing the IRS any money, strategic timing is a tactic worth trying.

“One way to avoid reporting a gift over $19,000 is to make the gift in two installments in different years,” advised Asher Rubinstein, a partner at Gallet Dreyer & Berkey, LLP. “You can make a gift of $19,000 in 2026 without reporting. Then, on January 1, 2027, make an additional gift of $11,000 without reporting.”

This technique works because the gift tax exclusion is annual. You can give up to the full allowable amount each year.

So, for example, the exclusion was $18,000 in 2024 and $19,000 in 2025 and 2026. Alma could have been very generous and given Byron $56,000 over the past three years, with no taxes owed, as long as she bided her time and didn’t exceed each year’s limit.

Double the exclusion if you’re married

There’s also another simple approach to a tax-free down payment gift if either Alma or Byron is married.

“If a person is married, this exclusion is available to both spouses,” Rachel Byers, a professor of accounting at Purdue Global, told Moneywise. “So, assuming the grandparents are married, each could gift the grandson $15,000, for a total of $30,000, and there would be no tax implications whatsoever.”

This could also work if Byron was married, with Alma splitting the gift between Byron and his wife and giving each spouse $15,000 toward the home.

This approach is an option because the exclusion is per giver and per recipient. So, Alma could give up to $19,000 to each of her grandkids each year if she wanted to. And her spouse could give each grandchild another $19,000.

Use up some of your lifetime gift tax exemption

Finally, Alma also has one other option. She can use part of her lifetime limit to avoid gift taxes on the transferred funds.

“Any gift greater than $19,000 to a single person during one calendar year must be reported to the IRS on Form 709, which is a gift tax return,” said Rubinstein. “A gift greater than $19,000 per year will ‘eat into’ one’s lifetime gift tax exemption, which is currently a very sizable $15 million per person. In other words, you can gift up to $15 million, and you won’t pay any gift tax.”

Rubinstein explained that you do have to report the gift to the IRS if it is between $19,000 and $15 million, but you won’t owe any tax on it because of your lifetime exclusion. And Byers agreed.