Is there a gift tax exclusion for educational expenses?

Yes—in fact, that’s by far the best way. As of 2024, the educational expense gift tax exclusion limit per year to any single individual, including a child, is just $18,000. However, if you’re making a tuition payment directly to an accredited educational institution, you should have unlimited tuition gift tax exclusion for educational expenses.

What is the gift tax exclusion for medical and tuition expenses?

What is the gift tax exclusion for payment of medical and tuition expenses? Under Section 2503 (e) of the Internal Revenue Code (the “Code”), tuition payments made directly to an educational organization on behalf of a person, and payments for a person’s medical care made directly to the provider are not treated as taxable gifts.

What is a gift tax exclusion?

The exclusion means that money given to a friend or family member to pay for college tuition is generally not subject to the federal gift tax. This can be significant for the person paying the tuition and the person on the receiving end. In this article, we'll cover what this gift tax exclusion is, along with its limits.