Indiana Inheritance Tax

The Indiana Inheritance Tax Return is Form IH-6 for Indiana residents.

Who must file? 

The IH-6 is to be filed by the personal representative of the estate.  If there is no personal representative, the person or entity having an interest in the asset should file the return.  (Examples:  beneficiary if small estate administration, joint owners of property, trustees, beneficiaries of P.O.D accounts).

There will be many estates that do not require an IH-6 to be filed.  If the exemptions of the beneficiaries exceed the assets, or the debts exceed the assets, you must file an Affidavit of No Inheritance Tax Due with the county assessor's office or a Petition to determine no inheritance tax due can be obtained from the court. You will need to know and include the decedent's social security number and date of death.

When to file?

The due date for filing the IH-6 was changed in July 2002 to nine (9) months from the date of decedent's death (previously 12 months).  The inheritance tax due should be paid within twelve (12) months.  However, if the tax is paid within nine (9) month's of decedent's death, the estate or beneficiary is given a 5% discount calculated on the tax due subtracted from total tax due.  If the inheritance tax is not paid after the twelve months, there is a penalty assessed in the amount of $2.50 plus .50 a day up to a maximum of $50.00, unless waived.   

Your attorney  can file a Petition to Waive penalty for delinquent filing if the delay was not due to the action of the personal representative. 

If the inheritance tax is not paid prior to the twelve (12) months after decedent's death, interest will be accrued and  added calculated from the date of death not starting from the date the tax was due.  If the return cannot be filed timely, file an extension for filing and ask the court to waive the penalty.  You may also  need to petition the Court to reduce the interest from the statutory amount of ten percent (10%) to six percent (6%).  But the interest reduction will generally be from the date of death to the date of the Order from the Court, so have your tax paid or ready to pay upon receiving the Order.

I recommend paying an estimated inheritance tax.  Estimate the amount due and if assets are available, you can pay the county treasurer an estimated inheritance tax payment, to get the discount and avoid paying any  interest. 

Many make the mistake of not paying an estimated tax before the nine month period to utilize the five percent (5%) discount offered by the county.  If an overpayment was made as an estimated payment, and made in good faith, the State of Indiana will issue the estate or beneficiary a refund, plus interest.

Recent changes:

Step-children, and their lineal descendants are considered Class A beneficiaries for calculating inheritance tax by Class.