Gifting Tuition 1

Many individuals are unaware that direct payments of tuition to an educational institution on behalf of a family member or other individual are exempt from gift tax regardless of whether or not such payment exceeds the current annual gift tax exclusion amount of $14,000.00.

In addition, direct payments of tuition will not reduce your lifetime exclusion amount. Gifts of direct payments may be more appropriate for certain individuals rather than establishing a 529 education plan or educational trust.

Laura Morrison Trujillo