Indiana is the only state that does not exempt direct descendent’s children and grandchildren from paying the inheritance tax. Indiana’s neighboring states, Michigan and Ohio, do not have inheritance taxes, and Kentucky does not tax on transfers to children.
“We are one of few states in the United States that still has an inheritance tax,” said Rep. Turner. “It is time to begin this process of protecting Hoosiers and the assets they’ve accumulated over their lifetimes. It will give Hoosiers a peace of mind to know that they can pass on their assets without additional taxes to their children and grandchildren.”
Indiana’s inheritance tax rate can range from one percent to as high as 20 percent of a person’s inheritance; 20 percent is the highest possible inheritance tax rate of any state.
The bill would raise the exemption for Class A beneficiaries, children and grandchildren to $250,000 and phase out the Indiana Inheritance Tax over a 10 year period from 2013-2023. Every year, incremental reductions of approximately nine percent would be removed from the state’s inheritance tax.
If signed into law by the Governor, SB 293 would be effective starting July 1, 2012.
Rep. P. Eric Turner serves as Speaker Pro Tem and represents District 32 which includes parts of Grant, Miami, Tipton, Howard, and Hamilton Counties.