However, although this election may keep you from having to pay tax, you'll still have to file a gift tax return in order to claim it. Other exclusions also keep you from having to file Form 709.

In 2025, with a $13.99 million exemption, you’d only pay gift tax on $1.01 million. Reminder: Filing Form 709 doesn’t mean you owe tax — it just tracks how much of your exemption you’ve used.

What If You Exceed the Limit? Let’s say you give $25,000 to your niece in 2025. You’d need to file Form 709 and report the excess $6,000. That $6,000 gets subtracted from your lifetime exemption.