It’s important to understand how gift taxes work so you can make informed decisions about giving during your lifetime. Gift taxes can directly affect your estate plan and the legacy you leave behind.
At Nirenstein, Horowitz & Associates, we help clients understand the rules around gift taxes, how to structure gifts wisely, and how to reduce the size of their taxable estate. If you’re planning to give meaningful gifts to loved ones, talk with our Connecticut estate planning lawyers first—strategic planning today can save your estate substantial taxes later.
What is a Gift Tax?
A gift tax is a federal tax on the transfer of property or money to someone without receiving equal value in return. Gifts to a spouse are typically exempt. However, if you give a substantial gift to a child, friend, or anyone else you’re not married to, it may count as a taxable gift.
In most cases, the person giving the gift—not the recipient—pays any applicable tax. While the IRS governs federal gift tax rules, some states have their own gift tax laws. Connecticut is currently the only state that still has a separate gift tax.
It’s also important to note that gift and estate taxes are connected. The IRS sets a combined lifetime exemption for both. In 2025, that exemption is $13.61 million per individual. Any taxable gifts you make during your lifetime count against this amount and reduce the tax-free portion of your estate at death.
When Do You Have to Pay a Gift Tax?
The IRS allows an Annual Gift Tax Exclusion of $18,000 per recipient in 2025. You can give up to $18,000 to as many people as you like each year without triggering a gift tax or even needing to file a gift tax return. If you’re married, you and your spouse can “split” gifts and give up to $36,000 per person per year together.
Connecticut Gift Tax Rules:
Connecticut imposes a gift tax on cumulative lifetime gifts exceeding the state’s exemption amount. In 2025, Connecticut aligns its exemption with the federal limit of $13.61 million. Gifts made over that limit during your lifetime are subject to Connecticut gift tax.
How We Help
At Nirenstein, Horowitz & Associates, we help clients create strategic plans for giving during life. We’ll show you how to take advantage of tax-free gifting opportunities while protecting your estate from unnecessary taxation. Whether you’re giving to help your children, support a cause, or transfer family wealth, the right plan can make a major difference.
You’ve worked hard to build your legacy. Let us help you pass it on—with less going to taxes and more to the people and causes you care about most.
Connect with a Connecticut Estate Planning Attorney
Contact us online or call us today to schedule a consultation. Let’s talk before you give—and well before you go. Strategic planning now means a stronger legacy later.
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