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Indiana Department of Revenue

DOR > About Us > Locate Forms and Publications > Inheritance Tax Information > Exemptions Exemptions

Indiana’s inheritance tax is not a tax on the property of a decedent, but on the right to succeed to the decedent’s property interests. The tax is imposed as a result of transfers due to a decedent’s death.

Regardless of when an individual dies, transfers to the surviving spouse and charitable organizations are 100 percent exempt from inheritance tax.

The class of transferee and the exemption amount depend upon the relationship of the transferee to the decedent. Transferees can be of Class A, Class B, or Class C.

Exemptions for Individuals Dying in 2012

Class A Transferees: Parents, children, stepchildren, grandparents, grandchildren, other lineal ancestors and lineal descendants, daughters-in-law and sons-in-law are eligible for an exemption of $250,000 each.

Class B Transferees: Brothers, sisters, lineal descendants of brothers or sisters, are eligible for an exemption of $500 each.

Class C Transferees: Anyone not listed above, including aunts, uncles, cousins, friends, nieces and nephews by marriage are eligible for an exemption of $100 each.

Example 1: There will be no inheritance tax filing requirement in the event one spouse inherits the entire estate of his or her deceased spouse.
Example 2: John left his entire estate equally to his two children, who are eligible for an exemption of $250,000 each. An inheritance tax return will be required if his estate is valued at more than $500,000.

There are different tax rates for each class of transferees.

Exemptions for Individuals Dying from 7/1/1997 to 12/31/2011

Class A Transferees: Parents, children, stepchildren (included if decedent's date of death is after June 30, 2004), grandparents, grandchildren and other lineal ancestors and lineal descendants are eligible for an exemption of $100,000 each.

Class B Transferees: Brothers, sisters, lineal descendants of brothers or sisters, daughters-in-law and sons-in-law are eligible for an exemption of $500 each.

Class C Transferees: Anyone not listed above, including aunts, uncles, cousins, friends, nieces and nephews by marriage are eligible for an exemption of $100 each.

Example 1: There will be no inheritance tax filing requirement in the event one spouse inherits the entire estate of his or her deceased spouse.
Example 2: John left his entire estate equally to his two children, who are eligible for an exemption of $100,000 each. An inheritance tax return will be required if his estate is valued at more than $200,000.

There are different tax rates for each class of transferees.