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What are the estate taxes in Pennsylvania?

“Nothing is certain except death and taxes” is a well-known saying, and Pennsylvania and other states combine these certainties into one with what is known as “death taxes.” It is not an estate tax, but rather an inheritance tax that applies to specific property of residents of the Keystone State.

According to FindLaw, the tax also applies to residents of other states who own tangible personal property or real estate located here. The state’s inheritance tax rates include:

  • 4.5 percent of property that goes to lineal heirs and direct descendants
  • 12 percent of property that is inherited by siblings
  • 15 percent of what is transferred to other heirs. Exceptions to this tax are charities and other exempt institutions

There is no tax on spousal inheritances or on property owned jointly by spouses. Transfers to a surviving parent of a child who is 21 or younger are not taxed either. Also exempt from the tax are working family farms, as well as some types of agricultural commodities related to the farm.

Inheritance taxes are due within nine months of the decedent’s death; if you submit these taxes within the first three months, Pennsylvania offers a five-percent discount. It also allows several expenses related to the administration of the estate to be deducted from its overall value before the payment amount is calculated.

Deductions can include some specific unpaid taxes of the decedent, as well as all lawful debts, which includes mortgages. State law also allows deductions of funeral expenses and attorney fees, along with payments made to the trustee or personal representative who is responsible for administering the estate.

If you are administering an estate and have questions, or wish to begin planning for one, get in touch with an experienced estate attorney. He or she can offer guidance on what can be a confusing legal process and changes in state law that may apply.

This information on estate taxes is provided for informational purposes only. It is not meant to be taken as legal advice.

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