Kentucky inheritance tax in 2026
Kentucky changed its inheritance tax twice in 2026: nephews and nieces joined the exempt class, and the deadlines grew longer for deaths from July 1. Enter the share and the relationship to see the tax.
- Spouse, children, siblings, nephews
- exempt
- In-laws, aunts, uncles
- 4 % to 16 %
- Everyone else
- 6 % to 16 %
- Due, deaths from July 1, 2026
- 24 months
Kentucky inheritance tax for this heir
$8,880
Class B: son- or daughter-in-law, aunts, uncles, great-grandchildren. 8.9 % of what is received.
| Received | $100,000 |
| Tax | $8,880 |
| Kept by the heir | $91,120 |
Tax on the share received from a resident. A spouse pays none in any of the five states.
| State | Class | Tax |
|---|---|---|
| Kentucky | Class B | $8,880 |
| Maryland | Exempt | $0 |
| Nebraska | Class 1 | $0 |
| New Jersey | Class C | $8,250 |
| Pennsylvania | Children, stepchildren, grandchildren and other descendants, parents, grandparents, and the spouse or surviving spouse of a child | $4,500 |
Compiled by Radif Partners · How we calculate · figures read on the state revenue department, the statute and irs.gov · not legal or tax advice
Kentucky taxes inheritances by class of beneficiary under KRS 140.070. Class A pays nothing: the spouse, parents, children, stepchildren, grandchildren, brothers and sisters, and, for deaths on or after January 1, 2026, nephews and nieces, half-blood included, moved there by 2026 Ky. Acts chapter 198. Class B, which covers a son- or daughter-in-law, an aunt or uncle and a great-grandchild, has a $1,000 exemption and rates from 4 % to 16 %. Class C, everyone else, cousins and friends included, has a $500 exemption and rates from 6 % to 16 %. On $100,000, a daughter-in-law owes $8,880 and a cousin $12,620. For deaths before July 1, 2026, the tax is due within 18 months, with a 5 % discount if paid within 9; for deaths from July 1, 2026, chapter 161 moved those dates to 24 and 14 months. Kentucky has no estate tax of its own.
What changed in 2026
Two laws passed in the 2026 session rewrote parts of chapter 140 of the Kentucky Revised Statutes. Chapter 198, section 40, amended KRS 140.070 so that "nephew, niece, or a nephew or niece of the half blood" are listed in Class A; a note of the Legislative Research Commission states that the change applies to estates of persons who died on or after January 1, 2026. Before that, nephews and nieces were Class B and paid between 4 % and 16 %. Chapter 161 amended KRS 140.210 for deaths on or after July 1, 2026: the tax is payable within 24 months instead of 18, and the 5 % discount applies to payment within 14 months instead of 9.
The Department of Revenue's inheritance tax page and its guide 92F101, dated January 2021, had not caught up when this page was written: both still list nephews and nieces in Class B and give the 18-month deadline only. For a death in 2026 the statute governs. A nephew inheriting $150,000 from an uncle who died in March 2026 owes nothing to Kentucky.
The three classes
| Class | Beneficiaries | Exemption | Rates |
|---|---|---|---|
| A | Spouse, parents, children by blood or adoption during infancy, stepchildren, grandchildren, brothers and sisters, nephews and nieces (half blood included) | everything | none |
| B | Daughter-in-law, son-in-law, aunt, uncle, great-grandchild | $1,000 | 4 % to 16 % |
| C | Everyone else: cousins, friends, great-nephews and great-nieces, nephews and nieces by marriage, institutions not exempt | $500 | 6 % to 16 % |
Exempt educational, religious and charitable institutions listed in KRS 140.060 pay nothing. The class exemption is charged against the lowest bracket or brackets, so the $1,000 of Class B is taken out of the slice taxed at 4 %.
Brackets in dollars
Class B climbs through eight brackets, from 4 % on the first $10,000 to 16 % on value above $200,000. Class C uses six brackets and reaches 16 % above $60,000, so a cousin reaches the top rate on a much smaller share than a son-in-law.
| Share received | Class B (in-law, aunt, uncle) | Class C (cousin, friend) |
|---|---|---|
| $5,000 | $160 | $270 |
| $25,000 | $1,140 | $1,850 |
| $50,000 | $3,100 | $4,830 |
| $100,000 | $8,880 | $12,620 |
| $250,000 | $30,840 | $36,620 |
| $500,000 | $70,840 | $76,620 |
Kentucky tax on one share
Kentucky inheritance tax for this heir
$9,420
| Received | $80,000 |
| Tax | $9,420 |
| Kept by the heir | $70,580 |
Deadlines, discount and installments
The tax is due at death. For deaths before July 1, 2026, it is payable within 18 months, reduced by 5 % if paid within 9, and interest at the statutory rate runs after 18 months. For deaths from July 1, 2026, the same rules apply with 24 and 14 months. When a beneficiary's net tax exceeds $5,000, the beneficiary may elect in writing to pay in 10 equal annual installments, the first with the return (KRS 140.222); the deferred part bears interest from 18 or 24 months, depending on the date of death, and the beneficiary is personally liable for it.
On a cousin's $100,000 share, paying $12,620 within the discount window saves $631. The federal estate tax return, if any, is due much earlier, nine months after death: the deadlines page lines the dates up.
Life insurance, real estate and nonresidents
Life insurance paid to a designated beneficiary, a trust included, is tax-free under KRS 140.030; paid to the insured or the estate, it becomes part of the shares and is taxed by class. All property of a Kentucky resident is taxable except real estate located in another state. A nonresident's Kentucky real estate and tangible property are taxable, and the class exemption is then prorated: it is reduced to the share of the whole estate that Kentucky taxes (KRS 140.080(2)). A Tennessee resident who leaves a Kentucky farm worth a quarter of the estate to a friend gives that friend a Class C exemption of a quarter of $500.
Who pays and how the shares are measured
The tax falls on each beneficiary's distributive share, after the estate's debts, funeral costs and administration expenses, and the personal representative or trustee who does not pay it by the deadline must give a bond for it (KRS 140.210). Each beneficiary is taxed separately, so an estate split between a brother and a cousin produces two bills, one of them at zero. Contracts can count too: KRS 140.030 treats a sum payable under a contract at or after death as a taxable transfer, unless the other party paid substantially equal value for it during the deceased's life.
When no tax is due
If every taxable asset goes to Class A beneficiaries or exempt institutions and no federal estate tax return is required, the court accepts an affidavit of exemption in place of the Kentucky return, according to the Department. After the 2026 change this covers many more estates: an aunt who leaves everything to her nieces and nephews no longer needs to file a Kentucky return for tax. Kentucky has no estate tax, and the federal tax applies only above $15,000,000. How the other four states treat the same heirs is on inheritance tax by state.