State Inheritance Tax Repealed

Aug. 5, 2013 – TaxTalk Blog

When a loved one passes away, families are often faced with uncertainty and countless questions. If they live in Indiana, one of the questions they often have to deal with if an inheritance was left is how it is taxed.

This year the Indiana General Assembly passed legislation repealing inheritance tax for Hoosiers who die after Dec. 31, 2012. The bill was signed into law on May 8, 2013, and lessens the load on families after their love ones have passed away.

Inheritance Tax Repeal
Taxpayers are no longer required to file any state inheritance tax forms, and no state inheritance tax will be due. In addition, inheritors are not required to submit consents to transfer forms for personal property or a notice of intended transfer of a checking account for those dying after Dec. 31, 2012 (these formerly required forms were the IH-6, IG-2, IH-14 and IH-19).

Important. If you had a family member pass away before Jan. 1, 2013, you may have to file state inheritance tax forms. Estates or beneficiaries of deceased Indiana nonresidents are required to file an inheritance tax return if the value of the transfer is greater than the exemption allowed for that beneficiary. Inheritance taxes can be complex, so taxpayers are encouraged to consult with attorneys or accountants who are familiar with Indiana’s inheritance tax to see what forms, if any, should be filed.

Inheritance Tax Refunds
If a person feels that she has overpaid inheritance tax to Indiana, then under the new law, that taxpayer should file an inheritance tax refund claim on a Claim for Refund, known as Form IH-5. This new requirement applies to any claim for refund whether the individual died in 2013 or before. For more information about how to claim a refund, click here.

For more information on Indiana inheritance tax, forms and legislation, visit the inheritance tax information website. You can also contact the department by email or by calling 317-232-2154.

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