Lifetime gifts and state estate taxes in 2026
A gift made during life leaves the estate, but several states pull it back in if death follows within a few years. Enter a gift to see the federal annual exclusion, the Form 709 question and, for Connecticut, the state gift tax return.
- Federal annual exclusion
- $19,000
- Look-back in New York and Minnesota
- 3 years
- States with a gift tax
- Connecticut only
- Form 709 due
- April 15, 2027
Taxable gift for 2026
$31,000
Form 709 due April 15, 2027. No tax: it uses $31,000 of the $15,000,000 lifetime exclusion.
| Annual exclusion that applies | $19,000 |
| Taxable gift | $31,000 |
| Lifetime exclusion left | $14,969,000 |
| Connecticut gift tax return | not needed |
Tuition paid to a school and medical bills paid to the provider are not gifts at all (26 U.S.C. 2503(e)).
Compiled by Radif Partners · How we calculate · figures read on the state revenue department, the statute and irs.gov · not legal or tax advice
Only Connecticut taxes gifts as such among the states: it counts every Connecticut taxable gift made since January 1, 2005, exempts the first $15,000,000 in total and adds those gifts to the estate at death. Elsewhere a gift is a way to shrink the estate that a state will tax, with a look-back period in four of them. New York and Minnesota add back taxable gifts made within three years of death, Vermont within two years, Maine within one year, and Hawaii reduces its $5,490,000 exclusion by every adjusted taxable gift. Illinois and Maryland bring gifts into their computations through the federal figures. A gift of up to $19,000 per person in 2026, the federal annual exclusion, is not a taxable gift at all and is never added back. A New York resident who gives a child $1,000,000 and dies two years later with $7,000,000 owes $770,616 in New York estate tax; the same gift made four years earlier leaves $0.
The rule in each estate-tax state
| Jurisdiction | What happens to lifetime gifts |
|---|---|
| Connecticut | Every Connecticut taxable gift since 2005 is added; Connecticut also has its own gift tax |
| District of Columbia | No add-back of lifetime gifts in the instructions read for this site |
| Hawaii | No gift tax, but adjusted taxable gifts reduce the exclusion |
| Illinois | Adjusted taxable gifts count in the $4,000,000 threshold and in the computation |
| Maine | Taxable gifts of the year before death are added back |
| Maryland | Adjusted taxable gifts enter the filing test and the Table B credit computation (Schedule B) |
| Massachusetts | No add-back of lifetime gifts in the instructions read for this site |
| Minnesota | Taxable gifts of the 3 years before death are added back |
| New York | Taxable gifts of the 3 years before death are added back |
| Oregon | No add-back of lifetime gifts in the instructions read for this site |
| Rhode Island | No add-back of lifetime gifts in the instructions read for this site |
| Vermont | Taxable gifts of the 2 years before death are added back |
| Washington | No add-back of lifetime gifts in the instructions read for this site |
The wording matters. Every look-back rule counts taxable gifts in the federal sense, defined by 26 U.S.C. 2503: the value given to a person in a year minus the annual exclusion. Gifts within $19,000 per person, tuition paid directly to a school and medical bills paid directly to the provider are not taxable gifts and stay out of every state computation. Vermont's statute adds a detail that the others share in substance: the amount added back is the gift's value when made, and any part already included in the federal gross estate is not counted twice.
What a look-back costs, four examples
Each line follows a resident who gives one child a single sum and dies in 2026 with the estate shown, the rest going to two children. The middle column applies the state's look-back to a gift inside the period; the last column assumes the gift was made long enough before death to escape it.
| State | Estate at death | Gift to a child | Tax, gift inside the look-back | Tax, older gift |
|---|---|---|---|---|
| New York | $7,000,000 | $1,000,000 | $770,616 | $0 |
| Minnesota | $3,200,000 | $600,000 | $101,530 | $26,000 |
| Vermont | $4,800,000 | $500,000 | $44,960 | $0 |
| Maine | $7,000,000 | $500,000 | $25,680 | $0 |
The New York line shows why the three-year rule matters more there than anywhere else. The gift brings the estate back over the exclusion of $7,350,000, past the point where the credit disappears, so the tax is computed on the whole sum from the first dollar. The rule is written in the ET-706 instructions for deaths before January 1, 2032, and only gifts made while a New York resident count. In Minnesota the clause is in section 291.016, in Vermont in the statute behind the Department of Taxes page, and in Maine the filing test itself includes taxable gifts made within one year of death (Maine Revenue Services).
Is this gift a taxable gift?
Taxable gift for 2026
$81,000
| Annual exclusion that applies | $19,000 |
| Taxable gift | $81,000 |
| Lifetime exclusion left | $14,919,000 |
| Connecticut gift tax return | not needed |
Connecticut, the only state gift tax
Connecticut has had a gift tax since 2005, and its Department of Revenue Services sets the 2026 exemption at $15,000,000 of aggregate Connecticut taxable gifts made since January 1, 2005, the same amount as the federal basic exclusion. Above it the tax is 12 % of the excess. The annual return, Form CT-706/709, covers all Connecticut taxable gifts of the calendar year and is filed by April 15 of the next year even when no tax is due. A resident's taxable gifts include intangible property wherever located; a nonresident's include only real and tangible property in Connecticut.
At death, the Connecticut taxable estate adds every Connecticut taxable gift made since 2005 that is not already in the federal gross estate, plus any Connecticut gift tax paid in the three years before death. Someone who leaves $14,000,000 after $2,000,000 of lifetime taxable gifts has a Connecticut taxable estate of $16,000,000, and owes $120,000. The combined Connecticut estate and gift tax of one person is capped at $15,000,000. The details are on the Connecticut page.
Hawaii, Illinois and Maryland: gifts inside the formula
Hawaii has no gift tax, but the M-6 instructions reduce the applicable exclusion by the federal adjusted taxable gifts of the decedent, whatever the year they were made. With $1,000,000 of past taxable gifts, an estate of $5,000,000 that would sit under the $5,490,000 exclusion owes $51,000. Illinois requires Form 700 when the estate plus adjusted taxable gifts exceeds $4,000,000 (Attorney General fact sheet), and its computation caps the tax with those gifts included. Maryland puts the adjusted taxable gifts in the filing test and in the federal tentative tax of Schedule B on Form MET 1.
The federal side, for every state
Federal law taxes gifts and estates with one exclusion: $15,000,000 per person in 2026. Gifts above the annual exclusion are reported on Form 709 and use part of that amount, and at death the adjusted taxable gifts are added to the estate to compute the federal tax (IRS gift tax questions). A married couple can split a gift and give $38,000 to each person without a taxable gift, with a Form 709 to elect the split. The federal gift tax and annual limit pages cover those rules; what this page adds is the state layer, which can make the timing of a large gift worth a six- or seven-figure difference.