Washington has no state gift tax. If you live in Washington and give money or property away during your lifetime, the state will not tax the transfer, no matter how large it is. Your only gift tax exposure is federal, and for 2026 you can give up to $19,000 per recipient without any filing or tax consequences. The one Washington wrinkle worth knowing: a narrow category of gifts made shortly before death can be pulled back into the Washington estate tax calculation, and Washington’s estate tax starts at a far lower threshold than the federal exemption.
Washington Does Not Impose a Gift Tax
Washington Administrative Code 458-57-005 states directly that Washington does not have a gift tax.1Washington State Legislature. WAC 458-57-005 There is no state return to file, no state rate schedule, and no state exemption to track. Whatever you give away during your lifetime is a federal matter only.
That puts Washington in line with most states. The practical implication for Washington residents is that gift planning is really federal gift tax planning, with one additional layer: how a lifetime gift interacts with Washington’s estate tax after you die.
When a Lifetime Gift Can Still Reach the Washington Estate Tax
Most outright gifts made before death stay out of the Washington estate tax calculation entirely. The Washington Department of Revenue limits the add-back to two specific categories.2Washington Department of Revenue. Estate Tax FAQ
- Federal gift tax you actually paid within three years of death. The tax amount, not the gift itself, is added back as an estate asset.
- Transfers where you kept strings attached: you gave the property away but retained the right to use it, kept the power to revoke the gift, or transferred a life insurance policy within three years of death. These track IRC sections 2036, 2037, 2038, and 2042.2Washington Department of Revenue. Estate Tax FAQ
A clean, outright gift that falls outside those categories is gone from your Washington estate. That makes genuine lifetime giving one of the few effective ways to reduce a Washington estate’s exposure before death.
Washington Estate Tax Threshold and Rates for 2026
Washington’s estate tax filing threshold for 2026 is $3,076,000.3Washington Department of Revenue. Estate Tax The figure is adjusted annually for inflation using the Seattle-area Consumer Price Index, starting from the $3,000,000 base set by RCW 83.100.020.4Washington State Legislature. Washington State Code 83.100 – Estate and Transfer Tax Act Estates above the threshold owe tax on the amount over the exclusion.
The rates run from 10% to 35% on a graduated scale for deaths on or after July 1, 2025:5Washington State Legislature. RCW 83.100.040
- $0 to $1,000,000: 10%
- $1,000,000 to $2,000,000: $100,000 plus 15% of the amount over $1,000,000
- $2,000,000 to $3,000,000: $250,000 plus 17% of the amount over $2,000,000
- $3,000,000 to $4,000,000: $420,000 plus 19% of the amount over $3,000,000
- $4,000,000 to $6,000,000: $610,000 plus 23% of the amount over $4,000,000
- $6,000,000 to $7,000,000: $1,070,000 plus 26% of the amount over $6,000,000
- $7,000,000 to $9,000,000: $1,330,000 plus 30% of the amount over $7,000,000
- $9,000,000 and up: $1,930,000 plus 35% of the amount over $9,000,000
Because the Washington threshold sits so far below the federal exemption, many estates that owe nothing to the IRS still face a sizable Washington bill. For residents with estates in the $3 million to $15 million range, moving assets out through lifetime gifts is often the single most effective step available.
The Federal Annual Exclusion for 2026
For 2026 you can give up to $19,000 to any one person without filing anything or using any of your lifetime exemption.6Internal Revenue Service. Gifts and Inheritances The limit is per donor, per recipient, per year. Give $19,000 each to ten people and you owe nothing and report nothing.
The $19,000 is the statutory $10,000 base from 26 U.S.C. § 2503(b), adjusted for inflation and rounded to the nearest $1,000.7Office of the Law Revision Counsel. 26 USC 2503 – Taxable Gifts Any gift above $19,000 to a single recipient in a calendar year triggers a Form 709 filing, even when no tax is actually due.
Married couples can elect to split a gift, treating it as half from each spouse and effectively doubling the exclusion to $38,000 per recipient. Both spouses have to consent and both file Form 709. Washington is a community property state, so gifts of community property are already treated as half from each spouse for federal purposes.
The Federal Lifetime Exemption
Gifts above the annual exclusion don’t produce an immediate tax bill. They draw down a lifetime pool instead. For 2026 the federal lifetime gift and estate tax exemption is $15,000,000 per person, or up to $30 million combined for a married couple.8Internal Revenue Service. What’s New – Estate and Gift Tax The One Big Beautiful Bill Act, signed July 4, 2025, permanently set that base and eliminated the scheduled sunset that would have cut the figure roughly in half.9Office of the Law Revision Counsel. 26 U.S. Code 2010 – Unified Credit Against Estate Tax Starting in 2027 the $15 million amount adjusts for inflation.
Until that lifetime pool is exhausted, taxable gifts simply reduce what’s left. Federal gift tax rates reach 40% at the top, but almost no one actually pays them, because the exemption runs out long before most donors do.
When a spouse dies without using the full exemption, the survivor can claim the unused portion (the Deceased Spousal Unused Exclusion) by filing a federal estate tax return within nine months of death. Washington does not offer portability for its own estate tax exemption, so this benefit exists only at the federal level.
Direct Payments for Tuition and Medical Care
Two kinds of payments are completely outside the gift tax system, with no dollar cap and no filing requirement. Under 26 U.S.C. § 2503(e), you can pay any amount directly to an educational institution for someone’s tuition, or directly to a medical provider for someone’s care, and it isn’t a taxable gift at all.10Office of the Law Revision Counsel. 26 USC 2503 – Taxable Gifts
The money has to go directly to the school or provider. Writing a check to your grandchild to reimburse their tuition does not qualify. For education, only tuition counts; books, supplies, and room and board are not covered. For medical care, the exclusion covers most medical and dental services, hospital stays, prescription drugs, and health insurance premiums. These payments don’t eat into either the $19,000 annual exclusion or the lifetime exemption, which makes them especially useful for Washington donors trying to shrink an estate.
Carryover Basis: The Hidden Cost of Gifting
Gifts come with the donor’s original tax basis attached.11Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If your parents bought stock for $50,000 and gifted it to you when it was worth $500,000, your basis is still $50,000. Sell it and you owe capital gains tax on the $450,000 of appreciation.
Inherited property is different. Heirs receive a stepped-up basis equal to fair market value on the date of death, so selling right away produces little or no taxable gain. That difference drives real decisions. If an estate sits below Washington’s $3,076,000 threshold, holding appreciated assets until death usually wins: no Washington estate tax, and heirs get the step-up. Above the threshold, the math often reverses, because the estate tax saved by giving the asset away during life exceeds the capital gains the heirs will eventually pay.
Filing IRS Form 709
Any gift above $19,000 to a single recipient in a calendar year requires Form 709, the federal gift tax return.12Internal Revenue Service. About Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return It’s due April 15 of the following year. You’ll need names and Social Security numbers for you and each recipient, a description of the property, your adjusted basis, and the fair market value on the date of the gift. For stock, include the CUSIP number and the share price that day. Real estate and closely held business interests generally need a professional appraisal to support the reported value.
On the return you subtract the $19,000 annual exclusion for each recipient, and the remaining taxable amount is applied against your lifetime exemption. Filing a Form 4868 extension on your income tax return automatically extends Form 709 by six months; Form 8892 does the same thing on a standalone basis if you don’t need an income tax extension.13Internal Revenue Service. About Form 8892, Application for Automatic Extension of Time To File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax Extensions cover the paperwork only. Any tax owed is still due April 15. Late-filing penalties on unpaid gift tax run from 5% to 25%.