AN ACT relating to inheritance tax.

UNOFFICIAL COPY 26 RS BR 186
Page 1 of 4
XXXX 7/3/2025 11:34 AM Jacketed
AN ACT relating to inheritance tax. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 140.070 is amended to read as follows: 3
The tax upon transfers of property as defined in the preceding sections of this chapter 4
shall be at the following rates: 5
(1) Class A. In case the transfer is to or for the benefit of a parent, surviving spouse , 6
child by blood, stepchild, child adopted during infancy, child adopted during 7
adulthood who was reared by the decedent during infancy or a grandchild who is 8
the issue of a child by blood, the issue of a stepchild, the issue of a child adopted 9
during adul thood who was reared by the decedent during infancy, the issue of a 10
child adopted during infancy, foster child, brother, sister, or brother or sister of the 11
half blood, the tax shall be[,] subject to the provisions of KRS 140.080.[, shall be: 12
On its value not exceeding $20,000 .............................................................. 2% 13
On its value exceeding $20,000, but not exceeding $30,000 ....................... 3% 14
On its value exceeding $30,000, but not exceeding $45,000 ....................... 4% 15
On its value exceeding $45,000, but not exceeding $60,000 ....................... 5% 16
On its value exceeding $60,000, but not exceeding $100,000 ..................... 6% 17
On its value exceeding $100,000, but not exceeding $200,000 ................... 7% 18
On its value exceeding $200,000, but not exceeding $500,000 ................... 8% 19
On its value exceeding $500,000 ............................................................... 10%] 20
(2) Class B. In case the transfer is to or for the benefit of a nephew, niece, or a nephew 21
or niece of the half blood, daughter -in-law, son-in-law, aunt or uncle, or a great -22
grandchild who is the grandchild of a child by blood, of a stepchild or of a child 23
adopted during infancy, the tax, subject to the provisions of KRS 140.080, shall be: 24
On its value not exceeding $10,000 .............................................................. 4% 25
On its value exceeding $10,000, but not exceeding $20,000 ....................... 5% 26
On its value exceeding $20,000, but not exceeding $30,000 ....................... 6% 27
UNOFFICIAL COPY 26 RS BR 186
Page 2 of 4
XXXX 7/3/2025 11:34 AM Jacketed
On its value exceeding $30,000, but not exceeding $45,000 ....................... 8% 1
On its value exceeding $45,000, but not exceeding $60,000 ..................... 10% 2
On its value exceeding $60,000, but not exceeding $100,000 ................... 12% 3
On its value exceeding $100,000, but not exceeding $200,000 ................. 14% 4
On its value exceeding $200,000 ................................................................ 16% 5
(3) Class C. In case the transfer is to or for the benefit of any educational, religious, or 6
other institutions, societies, or associations, or to any cities, towns, or public 7
institutions not exempted by KRS 140.060, or to any person not included in either 8
Class A or Class B, the tax, subject to the provisions of KRS 140.080, shall be: 9
On its value not exceeding $10,000 .............................................................. 6% 10
On its value exceeding $10,000, but not exceeding $20,000 ....................... 8% 11
On its value exceeding $20,000, but not exceeding $30,000 ..................... 10% 12
On its value exceeding $30,000, but not exceeding $45,000 ..................... 12% 13
On its value exceeding $45,000, but not exceeding $60,000 ................... . 14% 14
On its value exceeding $60,000 ........................................ ......................... 16% 15
Section 2. KRS 140.080 is amended to read as follows: 16
(1) The following exemptions chargeable against the lowest bracket or brackets of 17
inheritable interests shall be free from any tax under the preceding provision s of 18
this chapter: 19
(a) Surviving spouse, total inheritable interest. Effective as to decedents dying 20
after August 1, 1985, notwithstanding anything in this chapter to the contrary, 21
if the decedent's personal representative (or trustee or transferee, absent a 22
personal representative) shall so elect, the spouse's inheritable interest shall 23
include the entire value of any trust or life estate which is in a form that 24
qualifies for the federal estate tax marital deductions under section 2056(b)(5) 25
or 2056(b)(7) of the Internal Revenue Code of 1954, as amended through 26
December 31, 1984, regardless of whether or not the federal estate tax marital 27
UNOFFICIAL COPY 26 RS BR 186
Page 3 of 4
XXXX 7/3/2025 11:34 AM Jacketed
deduction is elected by the decedent's personal representative. To be valid, the 1
election referred to in the sentence im mediately preceding must be made in 2
the form prescribed by the Department of Revenue and must be filed on or 3
before the due date of the tax return (plus extensions) or with the first tax 4
return filed, whichever last occurs; 5
(b)[ Class A beneficiaries as de fined in KRS 140.070, other than the surviving 6
spouse, of estates of decedents dying prior to July 1, 1995, as follows: 7
1. Infant child by blood or adoption, $20,000; 8
2. Child by blood who ha s been declared mentally disabled by a court of 9
competent jurisdiction, $20,000; 10
3. Child adopted during infancy who has been declared mentally disabled 11
by a court of competent jurisdiction, $20,000; or a 12
4. Child adopted during adulthood who was reared by the decedent d uring 13
infancy and who has been declared mentally disabled by a court of 14
competent jurisdiction, $20,000; 15
5. Parent, $5,000; 16
6. Child by blood, $5,000; 17
7. Stepchild, $5,000; 18
8. Child adopted during infancy, $5,000; 19
9. Child adopted during adu lthood who was reared by the decedent d uring 20
infancy, $5,000; or a 21
10. Grandchild who is the issue of a child by blood, the issue of a stepchild, 22
the issue of a child adopted during infancy or the issue of a child 23
adopted during adulthood who was reared by the decedent during 24
infancy, $5,000; 25
(c)] Class A beneficiaries , as defined in KRS 140.070, [ other than the 26
surviving spouse, of estates of decedents dying on or after July 1, 1995, 27
UNOFFICIAL COPY 26 RS BR 186
Page 4 of 4
XXXX 7/3/2025 11:34 AM Jacketed
shall be as follows: 1
1. For decedents dying between July 1, 1995, and Jun e 30, 1996, the 2
greater of the exemption established pursuant to paragraph (1)(b) of this 3
section or one-fourth (1/4) of each beneficiary's inheritable interest; 4
2. For decedents dying between July 1, 1996, and June 30, 1997, the 5
greater of the exemption e stablished pursuant to paragraph (1)(b) of this 6
section or one-half (1/2) of each beneficiary's inheritable interest; 7
3. For decedents dying between July 1, 1997, and June 30, 1998, the 8
greater of the exemption established pursuant to paragraph (1)(b) of t his 9
section or three -fourths (3/4) of each beneficiary's inheritable interest; 10
and 11
4. For each decedent dying after June 30, 1998, each beneficiary's] total 12
inheritable interest; 13
(c)[(d)] All persons of Class B, under KRS 140.070, $1,000; and 14
(d)[(e)] All persons of Class C, under KRS 140.070, $500. 15
(2) If the decedent was not a resident of this state, the exemption shall be the same 16
proportion of the allowable exemption in the case of residents that the property 17
taxable by this state bears to the whole property transferred by the decedent. 18
Section 3. This Act shall apply to estates of decedents who die on or after 19
August 1, 2026. 20