Verified against Kentucky Department of Revenue · Updated August 27, 2026
Kentucky 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.
Calculate Kentucky inheritance tax for your situationWho owes Kentucky inheritance tax
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 |
Worked 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).
More on inheritance tax
For how the calculation works across all five states that still charge inheritance tax, exemptions worth knowing about, and strategies to reduce what's owed, see the full inheritance tax guide.