Corporate Gifting in 2026: Market Size and the IRS $25 Gift Deduction Rule

Findings

The U.S. corporate gifting market runs into the hundreds of billions

Estimates of the U.S. corporate gifting market vary by how broadly "gifting" is defined, but research firms place it firmly in the hundreds of billions of dollars. A widely cited study by Coresight Research with GiftNow put the market at about $258 billion in 2022 and projected roughly $312 billion by 2025, an annual growth rate near 6.5%. Coresight Research and GiftNow, Corporate Gifting Market study Because the category spans employee recognition, client appreciation, and promotional merchandise, headline figures differ between sources and are best read as order-of-magnitude estimates rather than precise totals.

The IRS limits the business gift deduction to $25 per recipient

For U.S. businesses, the tax treatment of gifts is governed by a long-standing rule: the deduction for gifts given directly or indirectly to any one person is limited to $25 per recipient per tax year. IRS Publication 463, Travel, Gift, and Car Expenses Incidental costs such as engraving, packaging, insuring, and mailing are not counted toward the $25 limit. The cap has not been adjusted for inflation since it was set, so its real value has eroded substantially over the decades.

Gifts to a business are treated differently from gifts to a person

The $25 cap applies to gifts to an individual. A gift made to a business as a whole - for example a reference book, equipment, or a shared resource that benefits the company rather than a specific person - is generally fully deductible as a business expense. IRS Publication 463 Widely distributed promotional items branded with the company name and costing very little each are also treated separately from the $25 gift limit. Because treatment depends on the specifics of each gift and recipient, businesses planning a gifting program should confirm current rules with a tax professional.

How to read these figures

The market-size figures come from third-party research firms and trade studies, which use differing definitions and methodologies, so estimates legitimately vary. Coresight Research and GiftNow The tax figures summarize federal rules in IRS Publication 463 and are not tax advice; state rules and individual circumstances can change the result. This page is a plain-language overview, not a substitute for professional guidance.