Verified against Kentucky Department of Revenue · Updated August 27, 2026
Kentucky (KY) Inheritance Tax in 2026: Rates, Exemptions & Calculator
Kentucky taxes inheritances based on how closely related you were to the person who died, using three classes (A, B, C) plus a separate exemption for charities. Close family — spouses, parents, children, stepchildren, grandchildren, and siblings — pay nothing. Everyone else pays something, with the rate climbing the more distant the relationship and the larger the inheritance.
Kentucky inheritance tax rates and exemptions by relationship (2026)
Kentucky sorts beneficiaries into classes based on their relationship to the person who died. Each class has its own exemption amount (if any) and tax rate — here's the full breakdown:
| Relationship to the deceased | Exemption | Rate |
|---|---|---|
| Class A — spouse, parent, child, stepchild, grandchild, siblings incl. half-siblings (fully exempt) | — | Exempt |
| Class B — niece/nephew (incl. half-blood), aunt, uncle, in-law, great-grandchild | $1,000 | 4.0% – 16.0% |
| Class C — cousins, unrelated individuals, grandparents, in-laws/nieces/nephews by marriage | $500 | 6.0% – 16.0% |
| Charities, educational, religious and public institutions (fully exempt) | — | Exempt |
Class B — niece/nephew (incl. half-blood), aunt, uncle, in-law, great-grandchild: bracket schedule
Applied to the amount left after the $1,000 exemption.
| Taxable amount | Rate |
|---|---|
| $0 – $9,000 (over $1,000 exemption) | 4.0% |
| $9,000 – $19,000 | 5.0% |
| $19,000 – $29,000 | 6.0% |
| $29,000 – $44,000 | 8.0% |
| $44,000 – $59,000 | 10.0% |
| $59,000 – $99,000 | 12.0% |
| $99,000 – $199,000 | 14.0% |
| Over $199,000 | 16.0% |
Class C — cousins, unrelated individuals, grandparents, in-laws/nieces/nephews by marriage: bracket schedule
Applied to the amount left after the $500 exemption.
| Taxable amount | Rate |
|---|---|
| $0 – $9,500 (over $500 exemption) | 6.0% |
| $9,500 – $19,500 | 8.0% |
| $19,500 – $29,500 | 10.0% |
| $29,500 – $44,500 | 12.0% |
| $44,500 – $59,500 | 14.0% |
| Over $59,500 | 16.0% |
The Kentucky inheritance tax calculator asks for the heir's relationship to the person who died, the amount inherited, and the date of death, then applies the Class A/B/C schedule below — including the progressive Class B and C brackets, which it works through bracket by bracket rather than applying one flat rate. Close family comes back at $0; for everyone else you get the exemption, the taxed amount, and the tax, plus the 36-month filing deadline for deaths on or after July 1, 2026.
Calculate Kentucky inheritance tax for your situationWorked example
A niece is Class B, which gets a $1,000 exemption. The remaining $49,000 is taxed progressively across Kentucky's Class B brackets — 4% on the first $9,000 above the exemption, 5% on the next $10,000, and so on up to 16% — for a total tax of $3,160.
Rules worth knowing
- Stepchildren and grandchildren are fully exempt (Class A) — but grandparents are not. Kentucky's statute doesn't name "grandparent" in Class A (which only covers descendants like grandchildren) or in Class B's closed list, so a grandparent falls to Class C by elimination and is taxed at 6–16%.
- Charitable, educational, religious, and public institution transfers are exempt under a separate statute (KRS 140.060), independent of the Class A/B/C framework.
Filing deadline
For deaths before July 1, 2026, Kentucky's inheritance tax return is due within 18 months of the date of death. For deaths on or after July 1, 2026, that deadline was extended to 36 months by HB 757 (2026 Ky. Acts ch. 161, signed after a veto override).
How Kentucky compares to the other states with an inheritance tax
Only five states still levy an inheritance tax, and each draws the line between "close family" and everyone else differently — here's how Kentucky stacks up.
| State | Closest relatives exempt? | Highest taxed rate | Notable quirk |
|---|---|---|---|
| Maryland | Spouse, parents/grandparents, children+descendants, siblings | 10.0% | $1,000 exemption is a cliff, not a deduction |
| Nebraska | Spouse only | 15.0% | Anyone under 22 owes $0, regardless of relationship |
| Pennsylvania | Spouse only | 15.0% | No exemption amounts — flat rates from the first dollar |
| Kentucky (this page) | Spouse, parent, child, stepchild, grandchild, sibling | 16.0% | Grandparents are NOT exempt — taxed as Class C |
| New Jersey | Spouse, parents, grandparents, children, stepchildren | 16.0% | Stepchildren fully exempt, same as biological children |
Frequently asked questions
Does Kentucky have an inheritance tax?
Yes. Kentucky is one of only five states (with Maryland, Nebraska, New Jersey, and Pennsylvania) that still charge an inheritance tax. Whether you owe anything depends on your relationship to the person who died: Class A relatives (spouse, parent, child, stepchild, grandchild, sibling) pay nothing; Class B (nieces, nephews, aunts, uncles, in-laws, great-grandchildren) pay 4%–16% after a $1,000 exemption; Class C (everyone else, including cousins, unrelated individuals, and grandparents) pays 6%–16% after a $500 exemption.
Does Kentucky have an estate tax?
No. Kentucky has no state estate tax. The tax on this page is an inheritance tax — owed by each beneficiary based on what they personally receive, not by the estate as a whole. Very large estates can still owe federal estate tax, which is a separate tax with its own $15,000,000 exemption for 2026.
How much is Kentucky inheritance tax?
It depends on class, not on the size of the estate. Class A pays 0%. Class B pays graduated rates from 4% on the first $9,000 above the $1,000 exemption up to 16% on amounts over $199,000. Class C pays graduated rates from 6% on the first $9,500 above the $500 exemption up to 16% on amounts over $59,500. Use the calculator above for an exact figure for your relationship and amount.
When is the Kentucky inheritance tax return due?
For deaths before July 1, 2026, the return is due within 18 months of the date of death. For deaths on or after July 1, 2026, HB 757 (2026 Ky. Acts ch. 161) extended that deadline to 36 months.
More on inheritance tax
For how the calculation works across all five states that still charge inheritance tax, how Kentucky's rules fit into the bigger picture, and strategies to reduce what's owed, see the full inheritance tax guide.
How Kentucky compares: on the same $500,000 inheritance for a 2026 death, an adult child owes $0 here, a niece or nephew $70,960, and an unrelated heir $76,670 — against a range of $50,000 to $75,000 for a niece across all five inheritance-tax states. The full side-by-side table, with a downloadable CSV, is in Inheritance and estate tax by state, 2026.