If you’re a nonresident alien navigating the U.S. tax system, you’ve probably wondered: “Do I need to pay taxes on gifts I give or receive in the U.S.?” You’re not alone – and yes, the rules can feel like a maze. But don’t worry.
In this article, we’ll untangle the gift tax rules specifically for nonresident aliens, breaking down what counts as a gift, who owes the tax, the 2025 federal gifting limits, and everything in between.
We’ll cut through the confusion so that whether you’re giving, receiving, or just curious, you’ll know exactly what to expect.
What is gift tax?
In the U.S., gift tax is a federal tax on the transfer of property from one person to another for which the giver receives nothing, or less than full value, in return. It applies regardless of whether the donor intends the transfer to be a gift.
What is considered a gift?
As mentioned, the IRS defines a gift as any transfer where full value is not received in return.
Common examples of gifts include:
- Cash transfers (giving money to someone directly)
- Real estate or property (such as a house, car, or artwork)
- Stocks and securities (transferring shares or bonds)
- Forgiven debts (canceling what someone owes you)
- Selling property below fair market value
- Interest-free or below-market loans
Are monetary gifts taxable?
In most cases, cash gifts are not taxable to the person receiving them, including nonresident aliens.
That means if you’re given money, you generally don’t need to report it on your U.S. tax return.
So, if the recipient isn’t responsible for the tax, then who is?
Who pays the gift tax (the giver or the receiver)?
Another common source of confusion is who is actually responsible for paying the gift tax.
The answer is straightforward: the giver (donor) is responsible, not the recipient.
This means:
- If you receive a gift, you don’t pay tax on it
- However, if you give a gift, you may owe gift tax and need to file a gift tax return, depending on the type and value of the gift.
For nonresident aliens, U.S. gift tax applies only to transfers of U.S.-situated tangible property (for example, real estate, cars, or jewelry located in the U.S.).
Additionally, gifts of intangible property (such as stock in U.S. corporations, bonds, or bank deposits) are generally not subject to U.S. gift tax for nonresidents.
When you are required to file a gift tax return as a nonresident, you should now use Form 709-NA.
Gift tax limit 2026 (maximum gift per year)
The tax treatment of a gift also depends on its value.
In 2026, the federal annual gift tax exclusion is $19,000 per recipient (same as in 2025). This means you can give up to $19,000 to as many people as you like in a year without triggering gift tax.
If the gift exceeds this exclusion, the donor may need to file a U.S. gift tax return. For U.S. citizens and residents, amounts above the exclusion can often be offset using their lifetime exemption ($15 million in 2026). However, this does not apply to nonresidents.
This means if a nonresident gives a taxable U.S.-situated gift worth more than $19,000, the excess amount may be subject to U.S. gift tax.
What is the federal gift tax rate?
The U.S. federal gift tax is calculated on a progressive scale, similar to income tax.
- Tax rates range from 18% to 40%, depending on the value of the gift.
- The highest rate – 40% – applies to very large taxable gifts.
- The tax is applied only to the amount above the annual exclusion ($19,000), after any available exemptions.
For example, if an NRA gives $50,000 to a U.S. recipient, the taxable gift is $50,000 − $19,000 = $31,000. The tax is calculated on this $31,000 using the progressive rates.
Gift to nonresident spouse
When it comes to spousal gifts, the tax treatment depends on your spouse’s citizenship.
If your spouse is a U.S. citizen, you can give any amount without paying gift tax – the unlimited marital deduction applies.
However, if your spouse is not a U.S. citizen, the rules change. Under U.S. gift tax for a non-U.S. citizen spouse, the IRS allows a special spousal annual exclusion of $194,000 in 2026 ($190,000 in 2025). This means you can transfer up to that amount each year without incurring gift tax. Any gifts above this threshold may be taxable.
For all other recipients, including children, relatives, or friends, the standard annual exclusion of $19,000 per person still applies.
Does gifted money count as income?
For U.S. tax purposes, receiving a gift is not considered taxable income. This applies whether the gift is cash, property, or other assets.
So, if you’re a nonresident alien and receive money or property from someone in the U.S., you do not report it as income on your U.S. tax return.
Reporting a gift as income
As we mentioned, recipients of gifts don’t report them as income.
The filing obligation applies to donors who give gifts subject to U.S. gift tax. Nonresident aliens may need to file Form 709-NA if their gift involves U.S.-situated tangible property above the annual exclusion.
Need help with filing U.S. taxes?
Filing a tax return as a nonresident can feel overwhelming — but you don’t have to do it alone. Sprintax Returns is a tax preparation software created specifically for nonresidents in the U.S.
Here’s how Sprintax can support you:
1. Guidance:
Clear, step-by-step help with completing the right forms, such as Form 8843, W-2, and 1040-NR.
2. Compliance:
Sprintax will help you understand your tax obligations and ensure you are compliant with US tax laws.
3. Refunds:
By accurately preparing your tax return, we will help ensure you receive any refund you are entitled to.
4. Support:
Access to around-the-clock support to answer any questions you may have throughout the tax filing process.
By filing with Sprintax, you can take the stress out of tax season and feel confident that your U.S. taxes are in order.
So why not file with Sprintax today?
