Does Kansas Have Estate or Inheritance Tax?

The short answer: Kansas has neither a state estate tax nor a state inheritance tax. The longer answer covers when federal estate tax still applies, what happens if you inherit from someone in another state, and what tax issues Kansas families actually need to plan for.

Kansas families often ask whether they need to worry about state-level estate or inheritance taxes when planning their estates or inheriting from a deceased relative. The good news is that Kansas is among the majority of states that don’t impose either tax. The Kansas estate tax was repealed effective for deaths after 2009, and Kansas has never had a state inheritance tax. For estates that are entirely Kansas-connected (Kansas decedent, Kansas beneficiaries, Kansas assets), there’s no state-level transfer tax to plan around.

That doesn’t mean Kansas families face no tax issues at death. Federal estate tax still applies to estates above the federal exemption. Kansans who inherit from relatives in other states may face that state’s tax. Income tax issues on inherited assets are separate from estate tax issues and apply regardless of which state is involved.

After 27 years and 5,423 trusts drafted at The Eastman Law Firm serving Leawood, Overland Park, and Lenexa, we’ve answered this question many times. Here’s the full picture.

Kansas State Tax Position

Kansas eliminated its estate tax over a decade ago. The Kansas legislature repealed the state estate tax effective for deaths occurring after December 31, 2006, with the final tax applying only to estates of decedents who died in 2006 or earlier. Since then, Kansas has had no state-level estate tax on the transfer of assets at death.

Kansas has also never had a state inheritance tax. Inheritance tax (paid by the recipient based on what they inherit) is different from estate tax (paid by the estate before distribution). Some states have one, the other, or both; Kansas has neither.

This makes Kansas a relatively favorable state from a transfer tax perspective. Decedents whose estates are entirely within Kansas face only federal estate tax (if their estate exceeds the federal exemption). Beneficiaries who inherit assets in Kansas face no state-level transfer tax on the inheritance itself.

Federal Estate Tax Still Applies

Federal estate tax applies regardless of which state the decedent lived in. The federal estate tax exemption is currently high (above $13 million per individual for 2026, with adjustments), which means most Kansas estates don’t owe any federal estate tax. Estates that exceed the exemption face federal estate tax on the amount above the exemption.

For Kansas families whose combined estates approach or exceed the federal exemption, federal estate tax planning matters even though state estate tax doesn’t. Strategies that reduce the federal taxable estate (irrevocable trusts, lifetime gifts using the exemption, charitable giving, business succession structures) can save significant federal tax. For broader coverage of these strategies, see our discussion of ways to minimize estate taxes.

The federal exemption is scheduled to change under current law unless legislation extends it. The change would meaningfully expand the audience for federal estate tax planning. Kansas families approaching the current exemption have additional reason to consider planning while the higher exemption is available.

Inheritance from Out-of-State Decedents

Kansas residents who inherit from relatives in other states may face that state’s tax even though Kansas itself has no inheritance tax. A few states have inheritance taxes that apply based on where the decedent lived or where the assets are located, not where the beneficiary lives.

States that currently have inheritance taxes include Iowa (being phased out), Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. If you’re a Kansas resident inheriting from someone who lived in one of these states, you may owe inheritance tax to that state under their rules. Some states exempt close family members (spouse, children, sometimes parents) entirely while taxing more distant relatives or unrelated beneficiaries.

States with estate taxes (different from inheritance taxes) include Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. If you inherit from someone who lived in one of these states, their estate may owe state estate tax before any distributions are made.

For Kansans with relatives in other states, understanding the other state’s tax rules helps anticipate the actual tax cost of inheritances. For Kansans who own property in other states, the other state’s tax may apply to that property regardless of Kansas residency.

Income Tax Is Different

Inheritances and estate distributions are generally not subject to federal income tax for the recipient. The estate may pay tax on income earned during administration, but the principal that passes to beneficiaries isn’t taxable income to them.

Specific assets have specific rules:

Inherited retirement accounts. Distributions from inherited IRAs and 401(k)s are generally taxable as income to the beneficiary as they’re distributed. Under the SECURE Act, most non-spouse beneficiaries must distribute inherited retirement account balances within 10 years of the decedent’s death, which can create significant income tax issues.

Capital gains on inherited assets. Inherited assets receive a step-up in basis to their fair market value at the decedent’s death. When the beneficiary sells, capital gains tax applies only to appreciation after death, not appreciation during the decedent’s lifetime. This is one of the most valuable features of the federal tax system for inherited wealth.

Annual income from inherited assets. Interest, dividends, rental income, and similar income earned by inherited assets after the inheritance is taxable to the beneficiary in the normal way.

Series E and EE bonds. Deferred interest accumulated during the decedent’s lifetime may be taxable as income to the beneficiary when redeemed, unless elected otherwise.

Kansas state income tax follows federal income tax rules for most of these items. Kansas doesn’t impose state income tax on Social Security benefits for most retirees.

What Kansas Families Should Actually Plan For

Given Kansas’s favorable state tax position, the planning focus typically shifts to other issues:

Federal estate tax exposure. For families with significant assets, federal estate tax planning matters even though state estate tax doesn’t. The strategies and structures used for federal estate tax planning are well-developed.

Income tax on inherited retirement accounts. The 10-year rule under SECURE creates significant income tax issues for non-spouse beneficiaries inheriting retirement accounts. Planning that accelerates distributions during the decedent’s life (Roth conversions, charitable distributions) can reduce the beneficiary’s tax burden.

Step-up in basis preservation. Estate planning strategies that move appreciated assets out of the taxable estate before death sacrifice the step-up in basis. For most Kansas families, the income tax benefit of preserving the step-up exceeds the estate tax cost of keeping assets in the estate.

Property in other states. Kansas families who own property in other states may face that state’s tax issues on that property. Coordination with attorneys in other states may be needed for multi-state planning.

Gift tax during life. Federal gift tax applies regardless of state residency. Annual exclusion gifts and lifetime exemption usage are relevant for Kansas families just as for families in any other state.

Generation-skipping transfer tax. Federal GST tax applies to transfers to grandchildren and more remote descendants. GST planning is relevant for Kansas families with substantial wealth being passed across generations.

For coordination of these issues with the rest of estate planning, see our discussion of integration. Our tax and financial planning work addresses federal and multi-state tax issues for Kansas families when relevant.

What the Free Call Is For

The 15-minute call sorts out what tax issues your family actually faces. You describe your circumstances, assets, family situation. Gary tells you what’s worth planning around and what isn’t.

By the end of the call, you’ll know more about your situation than you did when you picked up the phone. Whether you hire us or not.

Frequently Asked Questions

Does Kansas have an estate tax?

No. Kansas repealed its state estate tax for deaths occurring after December 31, 2006. Since then, Kansas estates owe no state-level estate tax regardless of size. Federal estate tax still applies to estates that exceed the federal exemption (currently above $13 million per individual for 2026, with adjustments), but no state estate tax adds to that. This makes Kansas relatively favorable compared to states like Illinois, Minnesota, New York, and several others that still impose state estate taxes with lower exemption thresholds than the federal exemption. For Kansas families whose estates fall below the federal exemption (the majority), there’s no state or federal estate tax cost on transfers at death.

Does Kansas have an inheritance tax?

No. Kansas has never had a state inheritance tax. Inheritance tax (paid by the recipient based on what they inherit) is different from estate tax (paid by the estate before distribution). Some states have one, the other, or both; Kansas has neither. Beneficiaries who inherit from a Kansas decedent face no state inheritance tax on what they receive. However, Kansas residents who inherit from someone in a state with an inheritance tax (Iowa, Kentucky, Maryland, Nebraska, New Jersey, or Pennsylvania) may owe inheritance tax to that state under its rules. The other state’s law applies based on where the decedent lived or where the assets are located, not where the beneficiary lives.

How much can you inherit in Kansas without paying taxes?

For state taxes, any amount. Kansas has no estate tax and no inheritance tax, so inheritances of any size from a Kansas decedent generate no state-level transfer tax cost. For federal taxes, the federal estate tax exemption is currently high (above $13 million per individual for 2026, with adjustments), so most inheritances generate no federal estate tax either. Note that income tax may apply to specific inherited assets even when no estate or inheritance tax applies. Inherited retirement accounts (IRAs, 401(k)s) generate income tax to the beneficiary as distributions occur. Income earned by inherited assets after the inheritance is taxable in the normal way. The step-up in basis at death eliminates capital gains on appreciation during the decedent’s lifetime for most assets.

Do you have to report inheritance to the IRS?

For most inheritances, no. Inheritances aren’t taxable income to the recipient, and the recipient generally doesn’t have to report the inheritance itself on their federal income tax return. However, specific situations require reporting. The deceased’s estate may have to file Form 706 (federal estate tax return) within nine months of death if the estate exceeds the filing threshold, but this is the estate’s filing, not the beneficiary’s. The estate may also file Form 1041 (fiduciary income tax return) annually during administration if the estate earns income; beneficiaries receive Schedule K-1 forms showing their share of income distributed to them, which they report on their personal returns. Income earned by inherited assets after the inheritance (interest, dividends, rental income) is reported normally on the beneficiary’s return.

What is the difference between estate tax and inheritance tax?

Estate tax is paid by the deceased’s estate before distributions to beneficiaries; it’s calculated on the total value of the estate. Inheritance tax is paid by the beneficiary based on what they individually receive; it’s often calculated with different rates depending on the beneficiary’s relationship to the deceased. The federal government has an estate tax (no federal inheritance tax). Most states have neither. Some states have one or the other. A few have both. Kansas has neither. The practical difference: estate tax reduces what’s available for distribution to beneficiaries; inheritance tax reduces what each beneficiary personally receives after the estate distributes assets to them. For a Kansas decedent with Kansas beneficiaries, neither applies at the state level, though federal estate tax may apply to larger estates.