Kentucky Inheritance Tax Nonresident Guide
Last updated: 10 Nov 2025 • Author: Alexander Foelsche CPA (US), WP (DE), RE (CH)
Kentucky Inheritance Tax — Nonresident Guide
For estates of decedents domiciled outside Kentucky that own Kentucky-situs property. This page explains who must file, what is taxable, beneficiary classes, deadlines and discounts, and practical checklists — with links to forms, planning, cases, and a calculator.
Do you need to file as a nonresident?
What counts as Kentucky-situs property for nonresidents?
| Asset type | Taxed by KY? | Notes |
|---|---|---|
| Real property located in Kentucky | Yes | Houses, farms, commercial property; county recording may require proof of tax compliance. |
| Tangible personal property kept in Kentucky | Yes | Boats, vehicles, equipment, artwork physically in KY. |
| Intangibles (stocks, bonds, bank/brokerage) | No (generally) | Nonresidents’ intangibles are taxable only if they have a business situs in KY. |
| Entity interests (LLC/partnership) | Generally no | Treated as intangibles; confirm no KY business situs. |
Beneficiary classes & tax exposure
Class A — Fully exempt
Spouse, parent, child, stepchild, adopted child, grandchild, etc. Inheritances to Class A are exempt from KY inheritance tax.
Class B — Limited exemption
Siblings, nieces/nephews (by blood), aunts/uncles, children-in-law, certain lineals by marriage. $1,000 exemption; rates approx. 4%–16% above the exemption.
Class C — Minimal exemption
All others (and some relatives not in Class B). $500 exemption; rates approx. 6%–16% above the exemption.
Deadlines, discounts & payment
| Item | Timing | Notes |
|---|---|---|
| Return due | 18 months after date of death | File the KY inheritance tax return if tax is due. |
| Early payment discount | Pay within 9 months | 5% discount on the tax if paid within 9 months. |
| Installments | Elect with return | If a beneficiary’s net tax exceeds $5,000, up to 10 annual installments may be available (interest applies). |
Core forms & workflows
Returns & affidavits
- Form 92A200 — Kentucky Inheritance Tax Return. Standard return when tax is due.
- Form 92A201 — No Tax Due Return. Use when all transfers are exempt (e.g., Class A only) and conditions are met.
- Affidavit of Exemption (KRS 395.605). Filed with the court (not DOR) when applicable.
Closings & transfers
- For Kentucky real property, courts and closing agents often require proof of filing/payment or exemption.
- Financial institutions may request DOR correspondence before releasing certain assets.
Check the county clerk’s recording requirements for deeds involving estates of nonresidents.
Quick examples
Example — Lexington condo to niece (Class B)
Nonresident decedent owns a KY condo valued at $350,000 passing to a niece. Tax applies to the niece’s share: $350,000 less $1,000 Class B exemption → tax at Class B rates. File KY return; aim to pay within 9 months to claim the discount.
Example — Boat kept at KY marina to friend (Class C)
Boat worth $60,000 located in Kentucky passes to a friend (Class C). After $500 exemption, Class C rates apply. Consider installment election if net tax > $5,000.
Nonresident filing checklist
Documents
- Death certificate; Letters of appointment.
- List of Kentucky-situs assets (real/tangible) with appraisals.
- Beneficiary list by class (A/B/C) and distributive shares.
- Contracts/beneficiary designations affecting KY assets.
Computations & payment
- Compute each beneficiary’s taxable share and class-based tax.
- Target 9 months for the 5% discount; otherwise, file by 18 months.
- Consider installments if a beneficiary’s net tax > $5,000.
FAQs — Nonresident estates
Are nonresidents taxed on stock and bank accounts?
Generally no. Nonresidents’ intangibles are not taxable in Kentucky unless the asset has a business situs in the state.
Who files — the executor or the beneficiary?
It’s an inheritance tax by beneficiary, but the personal representative commonly prepares and files; beneficiaries can be held liable for their shares.
Can I get a discount for early payment?
Yes. Paying the inheritance tax within 9 months of death earns a 5% discount (return still due no later than 18 months).
Is there an installment option?
Yes. If a beneficiary’s net tax exceeds $5,000, up to 10 equal annual installments may be available; interest applies.
References
- Kentucky DOR — Inheritance & Estate Tax portal: revenue.ky.gov
- A Guide to Kentucky Inheritance & Estate Taxes (92F101): PDF
- KRS 140.010 (Levy; property affected incl. business situs intangibles): Statute
- Form 92A200 (Inheritance Tax Return): PDF
- Form 92A201 (No Tax Due): PDF
- Affidavit of Exemption (KRS 395.605) sample: PDF
- KRS 140.222 (Installment payments over 10 years): Statute