Inheritance & Estate Tax
Inheritance and Estate Taxes are two separate taxes that are often referred to as death taxes since both are occasioned by the death of a property owner. The amount due from each tax is determined by the value of property transferred, but they are imposed on different aspects of the transfer.
The inheritance tax is a tax on the right to receive property from a decedent's estate; both tax and exemptions are based on the relationship of the beneficiary to the decedent.
The estate tax or "pickup tax" is a tax on the estate equal to the amount by which the credit for state death taxes allowable under the federal estate tax law exceeds the Kentucky inheritance tax. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) repealed the state death tax credit for decedents dying after 2004 and replaced the credit with a deduction. It was made permanent by the American Taxpayer Relief Act, which was signed into law on January 2, 2013. Since state death taxes are no longer treated as a credit for federal estate taxes, there has been no Kentucky estate tax since January 1, 2005.
Kentucky Inheritance and Estate Tax Laws can be found under Chapter 140 of the Kentucky Revised Statutes.
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Questions may be directed to the Kentucky Department of Revenue, Financial Tax Section, Station 61, 501 High Street, Frankfort, KY 40601-2103, or by calling (502) 564-4810.
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