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Wednesday
Jan162013

Indiana Department of Revenue Inheritance Tax Notes

Governor Daniels signed Senate Enrolled Act 293 on March 20, 2012. This new law will have significan impact on the administration of Indiana's inheritance tax laws. SEA 293:

  1. Increases Class A Exemption to $250,000
  2. Expands the definition of Class A transferee
  3. Phases out inheritance tax from 2013 to 2021 via an increasing credit

Increases Class A Exemption to $250,000

The Class A exemption has been increased to $250,000 for decedents dying after December 31, 2011. However, please keep in mind that for individuals dying before January 1, 2012, but after June 30, 1997, the Class A Exemption is still $100,000. If you have already processed returns for individuals dying in 2012 using the $100,000 Class A Exemption amount, the estate may need to file a revised IH-6 and obtain a new order determining tax (Form IH-9) if one has already been issued the the court.

The Class B and C Exemptions remain the same:

  • Class B - $500 Exemption
  • Class C - $100 Exemption

The tax rates and method of calculation tax on the transfer of an amount over the exemption for Class A, B, and C transferees remain the same.

Expands the Definition of Class A Transferee

SEA 293 has also expanded the definition of Class A transferee to include a spouse, a widow, or a widower of a child or stepchild of a transferor for a decedent who dies after December 31, 2011. Decedents dying before January 1, 2012, who made taxable transfers to a spouse, widow, or widower of a child or stepchild have the following exemption amounts:

  • Natural child - Class B ($500 Exemption)
  • Stepchild - Class C ($100 Exemption)

Phases Out Inheritance Tax from 2013 to 2021 via an Increasing Credit

There will be a gradual nine-year phase-out of Indiana's inheritance tax starting in 2013 and ending in 2022 via an increasing credit. The credit is tied to individuals dying during a particular calendar year, and the credit increases in 10% increments each year starting ni 2013.

The tax is repealed for decedents dying after December 31, 2021. The credit is to be applied by the county treasurer or Department of Revenue when the tax is paid.

Inheritance Tax Phase-Out

Year of Death - Credit

  • 2012 - 0%
  • 2013 - 10%
  • 2014 - 20%
  • 2015 - 30%
  • 2016 - 40%
  • 2017 - 50%
  • 2018 - 60%
  • 2019 - 70%
  • 2020 - 80%
  • 2021 - 90%
  • 2022 - Repealed

If you have any questions about this new law, please contact Don Hopper, Inheritance Tax Administrator, at dhopper@dor.in.gov or call 317-232-2154 to talk with him or other Department staff.

References (12)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Response: Lee Trotman SCE
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Response: home rentals
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
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    Response: Seo HOuston
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
  • Response
    Response: Houston Seo
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
  • Response
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
  • Response
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes
  • Response
    Williams Barrett & Wilkowski, LLP Attorneys at Law -- Greenwood, Indiana, Indianapolis, Indiana - Estate Planning - Indiana Department of Revenue Inheritance Tax Notes

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