Do Nonresident Aliens Pay Taxes on Gifts in the U.S.?
If you’re a nonresident alien living, studying, or working in the U.S., you might have wondered:
“Do I need to pay tax on gifts I give or receive here?”
It’s a great question — and the answer can be surprisingly complex. But don’t worry — this guide will walk you through everything you need to know about U.S. gift tax rules for nonresidents, including what counts as a gift, who owes the tax, 2025 limits, and how to stay compliant.
What Is Gift Tax?
In the United States, gift tax is a federal tax applied when someone transfers money or property and receives nothing (or less than full value) in return. The IRS considers it a gift whether or not the donor intended it as one.
What Qualifies as a Gift?
According to the IRS, a gift is any transfer where the giver doesn’t receive full value back.
Common examples include:
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Cash transfers or money gifts
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Property (such as cars, houses, or art)
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Stocks, shares, or securities
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Forgiven debts
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Selling assets below market value
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Interest-free or below-market loans
Are Monetary Gifts Taxable?
Good news — in most cases, the person receiving the gift does not pay tax, even if they’re a nonresident alien.
So, if you receive money or property as a gift, you generally don’t need to report it on your U.S. tax return.
Who Pays the Gift Tax: Giver or Receiver?
The giver (donor) is responsible for paying any gift tax — not the recipient.
That means:
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If you receive a gift, you don’t owe tax.
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If you give a gift, you may need to file a gift tax return (Form 709), depending on its type and value.
For nonresident aliens, U.S. gift tax applies only to U.S.-situated tangible property (like real estate, cars, or jewelry in the U.S.).
Gifts of intangible property (such as U.S. stocks, bonds, or bank deposits) are typically not taxable for nonresidents.
Note: The IRS plans to introduce Form 709-NA for nonresidents, but until it’s released, nonresidents should continue using Form 709.
Gift Tax Limit 2025
For 2025, the annual gift tax exclusion is $19,000 per recipient.
You can give up to that amount to as many people as you want — tax-free.
If your gift exceeds $19,000, you may need to file Form 709.
Unlike U.S. citizens or residents, nonresidents cannot use the lifetime exemption, so taxable gifts above the limit may be subject to U.S. gift tax.
Federal Gift Tax Rates
Gift tax rates in the U.S. are progressive, ranging from 18% to 40%.
Only the amount above the annual exclusion is taxed.
Example:
If a nonresident alien gives $50,000, the taxable portion is $31,000 ($50,000 − $19,000), taxed progressively up to 40%.
Gifts to a Nonresident Spouse
If your spouse is a U.S. citizen, you can give unlimited gifts without paying tax (unlimited marital deduction).
But if your spouse is not a U.S. citizen, there’s a special limit: $190,000 in 2025.
Any amount above that may be subject to U.S. gift tax.
For all others — children, relatives, or friends — the standard $19,000 annual exclusion applies.
Does Gifted Money Count as Income?
No. Gifts are not considered income for tax purposes.
Whether it’s cash, property, or assets, you don’t report it as income — even if you’re a nonresident alien.
Do I Need to Report a Gift as Income?
Recipients do not report gifts as income.
The donor must report and possibly pay tax if the gift exceeds the exemption limits or involves U.S.-based tangible property.
Need Help Filing Your U.S. Taxes?
Filing as a nonresident can feel complicated — but you don’t have to figure it out alone.
J1 Summer Tax Back is a tax preparation service built specifically for nonresidents in the U.S.
Here’s how we help you:
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🧾 Guidance: Step-by-step help completing forms like Form 8843, W-2, and 1040-NR.
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💸 Refunds: Accurate filing means maximizing your refund eligibility.
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💬 Support: Get reliable help every step of the way.
Take the stress out of tax season.
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