Who is exempt from Kentucky inheritance tax?

Class A beneficiaries — surviving spouses, parents, children, grandchildren, and siblings — are fully exempt from Kentucky inheritance tax and owe nothing regardless of the amount. Only Class B and Class C heirs face the tax.

What are the Kentucky inheritance tax classes?

Class A is close family (spouse, parents, children, grandchildren, siblings) and is exempt. Class B is more distant relatives such as nieces, nephews, aunts, uncles, and in-laws. Class C is everyone else, including cousins, friends, and unrelated heirs, and faces the highest rates.

What are the Class B and Class C exemptions?

Each Class B heir gets a 1,000 dollar exemption before tax applies, while each Class C heir gets only a 500 dollar exemption. Above those amounts, graduated brackets apply, starting around 4% for Class B and 6% for Class C and rising toward 16% on the largest inheritances.

Does Kentucky also have an estate tax?

Kentucky's separate estate tax is effectively tied to a federal credit that no longer exists, so in practice Kentucky collects only the inheritance tax. This calculator estimates the inheritance tax, which is paid by the beneficiary based on their class, not by the estate as a whole.

Is this calculator exact?

It is an approximation using Kentucky's class structure and graduated brackets. Actual liability depends on the precise statutory bracket schedule, valuation rules, and deductions, so use a Kentucky tax professional or the Department of Revenue forms to confirm the exact amount owed.

Kentucky Inheritance Tax Calculator

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Kentucky levies an inheritance tax on the beneficiary, not the estate, and the rate depends entirely on the heir’s relationship class. Class A relatives — spouse, parents, children, grandchildren, and siblings — are fully exempt. More distant Class B and unrelated Class C heirs face small exemptions and graduated rates up to 16%.

How it works

After subtracting the heir’s class exemption, Kentucky applies graduated brackets to the remaining value:

Class A → exempt (tax = 0)
Class B → first $1,000 exempt, then graduated brackets (~4% rising to ~16%)
Class C → first $500 exempt, then graduated brackets (~6% rising to ~16%)

Each heir is taxed separately on what they personally receive, so a single estate can produce different tax for different beneficiaries. The brackets rise with the size of the inheritance, so larger gifts to Class B or C heirs are taxed at progressively higher marginal rates.

Example and notes

A niece (Class B) inheriting 50,000 dollars subtracts her 1,000 dollar exemption and pays graduated rates on the remaining 49,000, landing in the low-to-mid single-digit-thousands range. A friend (Class C) inheriting the same amount subtracts only 500 dollars and pays higher bracket rates, producing a larger bill. A child (Class A) inheriting any amount pays nothing. These figures are approximations of Kentucky’s bracket schedule; confirm exact liability with the Kentucky Department of Revenue or a tax professional.