{"data":{"id":"us-ky/krs-140.063","jurisdiction":"us-ky","citation":"KRS 140.063","heading":"Exemption of annuities or other payments under employees' trusts --","body":"Retirement annuities -- Individual retirement bonds, accounts, and annuities.\n(1) There shall be excluded from taxation under KRS Chapter 140, to the extent\nattributable to employer's  contributions, the value of an annuity or other payment\nreceivable by any beneficiary (other than the executor or equivalent) under:\n(a) An employee's trust (or under a contract purchased by an employee's trust)\nforming a part of a pension, stock bonus, o r profit-sharing plan which, at the\ntime of the decedent's separation from employment (whether by death or\notherwise), or at the time of termination of the plan if earlier, met the\nrequirements of Section 401(a) of the Internal Revenue Code; or\n(b) A retir ement annuity contract purchased by an employer (and not by an\nemployee's trust) pursuant to a plan which, at the time of decedent's separation\nfrom employment (by death or otherwise), or at the time of termination of the\nplan if earlier, was a plan descri bed in Section 403(a) of the Internal Revenue\nCode; or\n(c) A retirement annuity contract purchased for an employee by an employer\nwhich is an organization referred to in Section 170(b)(1)(A)(ii) or (vi) of the\nInternal Revenue Code, or which is a religious  organization (other than a\ntrust), and which is exempt from tax under Section 501(a) of the Internal\nRevenue Code; or\n(d) Chapter 73 of Title 10 of the United States Code.\n(2) If amounts payable after the death of the decedent under a plan described in\nparagraph (a) or (b) of subsection (1) of this section, under a contract described in\nparagraph (c) of subsection (1) of this section, or under Chapter 73 of Title 10 of the\nUnited States Code are attributable to any extent to payments or contributions made\nby the decedent, no exclusion shall be allowed for that part of the value of such\namounts in the proportion that the total payments or contributions made by the\ndecedent bears to the total payments or contributions made. For purposes of this\nsubsection, contributions or payments made by the decedent's employer or former\nemployer under a trust or plan described in paragraph (a) or (b) of subsection (1) of\nthis section shall not be considered to be contributed by the decedent, and\ncontributions or payments ma de by the decedent's employer or former employer\ntoward the purchase of an annuity contract described in paragraph (c) of subsection\n(1) of this section shall, to the extent excludable from gross income under Section\n403(b) of the Internal Revenue Code, no t be considered to be contributed by the\ndecedent. This subsection shall apply to all decedents dying after December 31,\n1953. For purposes of this subsection, contributions or payments on behalf of the\ndecedent while he was an employee within the meaning of Section 401(c)(1) of the\nInternal Revenue Code made under a trust or plan described in paragraph (a) or (b)\nof subsection (1) of this section shall, to the extent allowable as a deduction under\nSection 404 of the Internal Revenue Code, be considered to be made by a person\nother than the decedent and, to the extent not so allowable shall be considered to be\ncontributions or payments made by the decedent. For purposes of this subsection,\namounts payable under Chapter 73 of Title 10 of the United States Cod e are\nattributable to payments or contributions made by the decedent only to the extent of\namounts deposited by him pursuant to Section 1438 or 1452(d) of such Title 10.\nThis subsection shall apply to all decedents dying after January 1, 1972.\n(3) There sh all be excluded from taxation under KRS Chapter 140 the value of an\nannuity receivable by any beneficiary (other than the executor) under:\n(a) An individual retirement account described in Section 408(a) of the Internal\nRevenue Code.\n(b) An individual reti rement annuity described in Section 408(b) of the Internal\nRevenue Code.\n(c) A retirement bond described in Section 409(a) of the Internal Revenue Code.\n(4) If any payment to an account described in paragraph (a) of subsection (3) of this\nsection or for an annuity described in paragraph (b) of subsection (3) of this section\nor a bond described in paragraph (c) of subsection (3) of this section was not\nallowable as a deduction under Section 219 or 220 of the Internal Revenue Code\nand was not a rollover contr ibution described in Section 402(a)(5), 403(a)(4),\nSection 403(b)(8) (but only to the extent such contribution is attributable to a\ndistribution from a contract described in subsection 408(c)(3)), 408(d)(3), or\n409(b)(3)(C) of the Internal Revenue Code, th e preceding sentence shall not apply\nto that portion of the value of the amount receivable under such account, annuity, or\nbond (as the case may be) which bears the same ratio to the total value of the\namount so receivable as the total amount which was pai d to or for such account,\nannuity, or bond and which was not allowable as a deduction under Section 219 or\n220 of the Internal Revenue Code and was not such a rollover contribution bears to\nthe total amount paid to or for such account, annuity, or bond. Fo r purposes of this\nsubsection, the term \"annuity\" means an annuity contract or other arrangement\nproviding for a series of substantially equal periodic payments to be made to a\nbeneficiary (other than the executor) for his life or over a period extending f or at\nleast thirty-six (36) months after the date of the decedent's death.\n(5) Except to the extent required by differences between KRS Chapter 140 and its\napplication and the federal estate tax law and its application, the relevant Internal\nRevenue Code r egulations and the relevant administrative and judicial\ninterpretations of the federal estate tax law shall be as nearly as practicable adopted\nand followed in the application of this section.\n(6) For the purposes of this section the term \"Internal Revenue  Code\" shall mean the\nInternal Revenue Code as amended through December 31, 1980.","path":["KRS Chapter 140"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=28980","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:33Z","sha256":"0ad8ad55768f4ff165899ec72877aa801cfddeb4a3461da71d35e873d59033e0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-140.060","next":"us-ky/krs-140.064"},"notice":"GroundRules: Original legal text. Not legal advice."}