States With a Gift Tax: Connecticut, Estate Look-Backs, Exclusions

Connecticut is the only state with a standalone gift tax on lifetime transfers. Three other states with a gift tax exposure worth knowing about are New York, Minnesota, and Maine, which don’t tax gifts while you’re alive but pull recent gifts back into the taxable estate when you die. Everywhere else, lifetime gifts are a federal-only concern.

Connecticut: The Only Standalone State Gift Tax

Connecticut has taxed lifetime gifts since 1991, and no other state has adopted a similar tax.¹ It applies to any Connecticut resident who makes gifts above the annual exclusion, and to nonresidents who give away real estate or tangible personal property physically located in Connecticut.² Intangible property like stocks, bonds, and bank accounts is exempt for nonresidents no matter where the account is held.³

Connecticut defines taxable gifts the same way federal law does, incorporating the Internal Revenue Code’s rules on what counts as a gift and what deductions apply.³ If a transfer isn’t a taxable gift federally, it generally isn’t one for Connecticut either.

Exemption and Rate

Connecticut’s gift tax exemption tracks the federal basic exclusion amount. For 2026, that number is $15 million per donor, set by the One, Big, Beautiful Bill signed into law on July 4, 2025.⁴ Gifts that push a donor’s cumulative lifetime total above the exemption are taxed at a flat 12% on the excess.²

Here is the part that catches donors off guard. Connecticut aggregates every taxable gift you have made since January 1, 2005, not just the current year’s transfers.³ Splitting a large gift across many years does not keep you under the exemption. Once the running total crosses $15 million, the 12% rate applies to the overage.

When You Must File in Connecticut

You must file a Connecticut gift tax return if your gifts to any single recipient during the calendar year exceed the federal annual exclusion of $19,000 for 2026, even if your lifetime total remains well below the $15 million exemption and no tax is owed.⁴ Connecticut uses Form CT-706/709, a combined estate and gift tax return.⁵ For gifts of real estate or closely held business interests, a formal appraisal supports the value you report.⁶

The return is due April 15 of the year after the gifts were made.⁷ A six-month extension is available through Form CT-706/709 EXT, but the extension covers filing only. Any estimated tax must still be paid by April 15. Miss the deadline and the penalty is 10% of the unpaid tax or $50, whichever is greater, plus 1% monthly interest running from the original due date until the balance clears.³

States That Tax Gifts Indirectly Through the Estate

Three states let you give freely while you’re alive but reach back at death and add recent gifts to the taxable estate. The mechanism prevents a dying donor from stripping assets out of an estate to dodge state estate tax. If you live in one of these states, gifts made near the end of life aren’t truly out of reach for state tax purposes.

New York: Three-Year Look-Back

New York adds back any federally taxable gift made within three years of the donor’s death, provided the gift wasn’t already part of the federal gross estate. Several categories are excluded from the add-back: gifts made before April 1, 2014; gifts made while the donor lived outside New York; gifts of real or tangible property located outside the state; and gifts made between January 1 and January 15, 2019, a legislative transition quirk.⁸

The exposure matters because New York’s estate tax exemption sits far below the federal figure. Adding three years of gifts to the estate can vault the total across the state threshold and generate a tax bill on the entire amount above it.

Minnesota: Three-Year Look-Back

Minnesota also uses a three-year window. Federal adjusted taxable gifts made within three years of death count toward the state filing threshold, and Minnesota taxable gifts made after June 30, 2013, and within three years of death get added to the taxable estate for calculating the tax.⁹ Minnesota estate tax rates run from 13% on amounts just above the exemption to 16% on amounts over $10.1 million.¹⁰

Minnesota briefly enacted a standalone gift tax in 2013 and repealed it in 2014. The three-year look-back survived the repeal and remains in force.¹⁰

Maine: One-Year Look-Back

Maine’s window is shorter. The state adds only gifts made during the one-year period ending on the date of death.¹¹ The Maine taxable estate equals the federal taxable estate plus those one-year gifts, plus the value of any Maine elective property. Even a single year of large transfers can push an estate over the state exemption and produce a bill that wouldn’t otherwise exist.

Practical Implication

In New York, Minnesota, and Maine, executors need to comb bank records and property transfers from the look-back period when preparing the estate tax return. Gifts made well outside the window are free of state estate tax; gifts inside it aren’t. The earlier a gift is made, the cleaner it stays.

Federal Rules Still Apply Everywhere Else

Outside of Connecticut, no state imposes its own gift tax during the donor’s life. That leaves federal gift tax as the only concern for lifetime transfers in 46 states. The federal lifetime exemption is $15 million per person for 2026, and married couples effectively have $30 million between them.⁴ For nearly everyone, that exemption is high enough that no gift tax will ever come due.

Transfers That Aren’t Taxable Gifts

Some generous transfers don’t count against the exemption or trigger any reporting, at either the federal or Connecticut level.

The Annual Exclusion

For 2026, you can give up to $19,000 per recipient per year without filing a return or reducing your lifetime exemption.⁴ There’s no limit on how many people you can give to, and the exclusion resets each calendar year.¹² A donor who writes fifteen $19,000 checks to fifteen people has moved $285,000 and owes nothing.

Direct Tuition and Medical Payments

Payments made directly to a school for tuition or directly to a medical provider are not treated as gifts under federal law, and there is no dollar cap.¹² Pay a grandchild’s $200,000 tuition bill directly to the university, and you can still give that grandchild another $19,000 the same year tax-free.

Two limits apply. You must pay the institution or provider directly; a check to the student or patient doesn’t qualify. And the tuition exclusion covers tuition only, not room, board, books, or living expenses. The medical exclusion covers amounts that would qualify as deductible medical expenses, including health insurance premiums.

Gift Splitting

Married couples can elect to treat any gift made by one spouse as if each spouse made half. That effectively doubles the annual exclusion to $38,000 per recipient.¹³ Both spouses must be U.S. citizens or residents, and consent is recorded on Form 709. When gift splitting is elected, it applies to every gift either spouse made that year, not just selected ones, and both spouses generally need to file a return.

What Recipients Owe

Gift tax is the donor’s responsibility. If someone gives you money or property, you don’t report it as income and you don’t owe income tax on it. The donor tracks, reports, and pays. The one narrow exception is that if a donor fails to pay, the IRS may attempt to collect from the recipient as a last resort. That doesn’t shift the primary duty, which starts and generally ends with the person making the gift.

1
Justia. Connecticut Code 12-640 – Imposition of Gift Tax
2
Connecticut State Department of Revenue Services. Estate and Gift Tax Information
3
Connecticut General Assembly. Connecticut Code Chapter 228c – Gift Tax
4
Internal Revenue Service. What’s New – Estate and Gift Tax
5
Connecticut State Department of Revenue Services. Connecticut Estate and Gift Tax
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Connecticut Department of Revenue Services. Connecticut Estate and Gift Tax Return
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Internal Revenue Service. Filing Estate and Gift Tax Returns
8
New York State Department of Taxation and Finance. Estate Tax
9
Minnesota Department of Revenue. Gift Tax and Taxable Gifts
10
Minnesota House Research Department. The Minnesota Estate Tax
11
Maine Revenue Services. Estate Tax (706ME)
12
Office of the Law Revision Counsel. 26 USC 2503 – Taxable Gifts
13
Office of the Law Revision Counsel. 26 USC 2513 – Gift by Husband or Wife to Third Party