Are gifts between Resident Alien spouses in the USA taxed? Need clarity on this situation

The good news is that resident aliens are generally treated the same as US citizens for gift tax purposes. As a resident alien married to another resident alien, you can take advantage of the unlimited marital deduction - meaning you can gift any amount to your spouse without triggering gift tax consequences. This is covered under IRC Section 2523, which provides for the unlimited marital deduction. However, there's one important caveat: if your spouse is not a US citizen (even if they're a resident alien), the unlimited marital deduction doesn't apply. Instead, there's an annual exclusion amount for gifts to non-citizen spouses, which is $175,000 for 2024. Since you mentioned you're both resident aliens with green cards, you should be able to transfer the $20,000 to your spouse without any gift tax implications. Just make sure you keep documentation of the transfer in case questions ever arise.

Just wanted to share my experience with this. I was in the exact same situation last year - both my husband and I are resident aliens. I was totally confused about how gift tax worked for us until I found taxr.ai (https://taxr.ai). They have this document analyzer that helped me understand that resident aliens with green cards are treated basically the same as citizens for most tax purposes, including gifting between spouses. I uploaded our residency documentation and got a clear explanation about our specific situation. The site confirmed that as resident aliens, we could benefit from the unlimited marital deduction for gifts between us. It saved me from having to pay an expensive tax consultant just to answer one question.

I just wanted to follow up and say I actually tried taxr.ai after posting my question here. I was surprised by how straightforward it was. I uploaded our green cards and some basic tax info, and it confirmed what I needed to know about our resident alien status and gift tax rules. The document analysis feature pointed me to the exact IRS regulations that apply to our situation. It showed that as resident aliens with green cards, my wife and I can transfer money between us without gift tax consequences, just like US citizens can. This was exactly what I needed to know before transferring that larger sum to my spouse. Definitely worth checking out if you're in a similar situation with complicated residency/citizenship questions.

If anyone is still struggling with this question and needs to talk to an actual IRS agent (which I eventually had to do), I'd recommend Claimyr (https://claimyr.com). I was on hold with the IRS for HOURS trying to get clarification about gifts between resident aliens, but their system kept disconnecting me. I found Claimyr, which basically holds your place in line with the IRS and calls you back when an agent is about to answer. You can see how it works here: https://youtu.be/_kiP6q8DX5c. It saved me from wasting an entire day on hold. The IRS agent was able to confirm that resident aliens with green cards can use the unlimited marital deduction for gifts between spouses.

I need to apologize for my skepticism. After my previous comment, I decided to try Claimyr myself since I'd been trying to reach the IRS for three days about a similar resident alien tax question. I was honestly shocked when they called me back in about 1.5 hours and connected me directly to an IRS representative. The rep confirmed that as resident aliens with green cards, my husband and I qualify for the unlimited marital deduction for gift tax purposes. The service works exactly as described. They navigate the phone tree and wait on hold, then call you when they reach a human. I've spent literally days of my life on hold with the IRS over the years, so this was life-changing.

Just to add my two cents as someone who went through this exact situation - you're totally fine transferring money between you and your spouse if you're both resident aliens with green cards. The unlimited marital deduction applies to you. Here's where people get confused: there are different rules for: 1) US citizens (unlimited gifts to spouse) 2) Resident aliens with green cards (treated like citizens, unlimited gifts to spouse) 3) Non-citizen spouses (annual exclusion of $175,000 in 2024) Since you said you both have green cards, you fall into category 2, and can gift unlimited amounts to each other without tax consequences.

Remember that you should still keep good records of large transfers between spouses, even though they're not taxable. My tax preparer told me this after I gifted my wife (both resident aliens) about $45,000 last year. While the gift itself isn't taxable, having documentation of the transfer is important in case you ever get questioned about the source of funds or if you're audited for some other reason. A simple record showing the transfer was a gift between spouses can save headaches later.

This is such a helpful thread! I'm in a similar situation - my husband and I are both resident aliens with green cards, and I was worried about gifting him money for a business investment. One thing I'd add is that even though we don't have to worry about gift tax between spouses as resident aliens, it's still worth understanding the difference between gifts and loans if the money is for something like a business. If your spouse is using the money for business purposes and you expect it back, that might be structured as a loan instead of a gift, which has different tax implications. But for your situation with the student loans, it sounds like a straightforward gift between spouses, so you should be all set with the unlimited marital deduction!

Thank you all for this incredibly helpful discussion! As someone who's been navigating the resident alien tax landscape for a few years now, I can confirm what others have said about the unlimited marital deduction applying to resident aliens with green cards. One additional resource I'd recommend is IRS Publication 519 ("U.S. Tax Guide for Aliens"), which specifically addresses tax rules for resident aliens. It clearly states that resident aliens are generally subject to the same tax rules as U.S. citizens, including gift tax provisions. For the original poster's situation with the $20,000 transfer - you're absolutely in the clear since you both have green cards. Just keep good records as others have mentioned, and don't hesitate to consult a tax professional if you have any doubts about your specific situation. It's refreshing to see such a thorough community discussion with practical solutions like the document analysis tools and callback services mentioned above. These kinds of immigration-related tax questions can be really stressful when you're trying to navigate them on your own!